ACC 556 Week 2 Quiz

ACC 556 Week 2 Quiz  | Assignment Help | Strayer University 

ACC 556 Week 2 Practice Question Part-1(Q+Ans)

 

Practice Question 01

 The costs that a firm incurs when operating its business cause retained earnings to decrease.

Expenses decrease retained earnings.

 

o   True

o   False

 

Practice Question 02

 When services are performed for cash, assets are increased and stockholders’ equity is increased.

The effect on the basic accounting equation of performing services for cash are to

 

 

o   Increase assets and decrease stockholders’ equity.

o   Increase assets and increase liabilities.

o   Increase assets and increase stockholders’ equity.

o   Increase liabilities and increase stockholders’ equity.

 

 

Practice Question 05

 Since assets only decreased $50,000, and liabilities decreased by $90,000, stockholders’ equity has to increase by $40,000 to keep the accounting equation balanced.

During 2017, Gibson Company assets decreased $50,000 and its liabilities decreased $90,000. Its stockholders’ equity

 

o   Decreased $140,000.

o   Increased $40,000.

o   Decreased $40,000.

o   Increased $140,000.

 

Practice Question 06

 The costs that a firm incurs when operating its business (expenses) cause retained earnings to decrease.

Retained earnings is decreased by

 

o   Assets.

o   Owner’s investments.

o   Expenses.

o   Revenues.

 

 

Practice Question 08

 A liability such as unearned revenue will increase and cash (an asset) will also increase.

If cash is received in advance from a customer

 

o   Assets will decrease.

o   Liabilities will increase.

o   Stockholders' equity will decrease.

o   Retained earnings will increase.

 

 

Practice Question 07

 When an expense is paid with cash, cash (an asset) will be decreased.

If an expense is paid with cash

 

o   Retained earnings will increase.

o   Liabilities will increase.

o   Assets will decrease.

o   Expenses will decrease.

 

 

Practice Question 13

 The left side is the debit side while the right side is the credit side.

Every account has a left or credit side and a right or debit side.

 

o   True

o   False

 

 

Practice Question 15

 An account has three basic parts – a title, a debit side, and a credit side, but it is not a source document.

An account is a part of the financial information system and is described by all except which one of the following?

 

 

o   An account has a title.

o   An account consists of three parts.

o   An account has a debit and credit side.

o   An account is a source document.

 

Practice Question 16

  An account is an individual record of specific account detail.

Which statement about an account is true?

 

o   The right side of an account is the debit side.

o   In its simplest form, an account consists of two parts.

o   An account is an individual accounting record of increases and decreases in specific asset, liability, and stockholders’ equity items.

o   There are separate accounts for specific assets and liabilities but only one account for stockholders’ equity items.

 

 

Practice Question 21

 Cash, an asset, will decrease. Accounts payable, a liability, will decrease.

What effects occur when an account payable is paid with cash?

 

o   Decreases assets and decreases liabilities

o   Decreases stockholders’ equity and decreases liabilities

o   Increases assets and decreases liabilities

o   Decreases assets and increases stockholders’ equity

 

 

Practice Question 24

 When credits are greater than debits, credits minus debits results in a credit balance of $600. The debit of $300 is subtracted from the credit of $900, which results in a credit of $600.

An account has $300 on the debit side and $900 on the credit side. How much is the account balance?

 

o   Credit of $600

o   Debit of $600

o   Credit of $900

o   Debit of $1,200

 

Practice Question 25

 First net income is calculated as revenues of $20,000 (Cr.) less expenses of $12,000, which is $8,000. Then the beginning balance of Retained Earnings, $136,000 (Cr.) plus net income of $8,000 less dividends of $2,000 (Dr.) results in the ending balance of retained earnings of $142,000 (Cr.).

At September 1, 2017, Five-O Inc. reported retained earnings of $136,000. During the month, Five-O generated revenues of $20,000, incurred expenses of $12,000, purchased equipment for $5,000 and paid dividends of $2,000. What is the balance in retained earnings at September 30, 2017?

 

 

 

 

o   $8,000 credit

o   $136,000 debit

o   $137,000 credit

o   $142,000 credit

 

 

Practice Question 30

 A journal contains entries affecting all accounts, not just revenue and expense accounts.

Which of these statements about a journal is false?

 

o   It provides a chronological record of transactions.

o   It discloses the complete effect of a transaction in one place.

o   It contains only revenue and expense accounts.

o   It helps to locate errors because the debit and credit amounts for each entry can be readily compared.

 

 

Practice Question 29

 The journal is an accounting record in which transactions are initially recorded in chronological order.

Transactions are recorded in chronological order in the journal.

o   True

o   False

 

 

Practice Question 28

 A trial balance is prepared after posting to verify that debits equal credits.

Which is not part of the recording process?

 

 

 

o   Posting transactions

o   Preparing a trial balance

o   Analyzing transactions

o   Entering transactions in a journal

 

 

Practice Question 31

 The current balance of an account is not needed when making journal entries.

Which of the following is not a part of a complete journal entry?

 

o   The date of the transaction

o   A brief explanation of the transaction

o   The balance of each account affected by the transaction

o   The accounts and amounts to be debited and credited

 

Practice Question 32

 The first place entries are recorded is the journal. It is sometimes referred to as the book of original entry.

Where is the first place every transaction is recorded?

 

o   In the respective accounts

o   In the journal

o   In the ledger

o   In the basic accounting equation

 

 

Practice Question 33

 Issuing stock for cash is recorded by debiting Cash and crediting Common Stock.

What journal entry is recorded as a result of issuing stock to investors for cash?

 

 

 

o   A credit to Cash and a debit to Retained Earnings

o   A debit to Common Stock and a credit to Cash

o   A debit to Cash and a credit to Retained Earnings

o   A debit to Cash and a credit to Common Stock

 

Practice Question 44

 When the trial balance balances, it simply means that all of the debits equal all of the credits as shown in the document.

When a trial balance balances, it is an indication that

 

o   All journal entries have been posted.

o   All transactions have been journalized.

o   The account balances are correct.

o   Debits equal credits.

 

Practice Question 51

 Buying equipment is a part of the investing activities of a firm.

Which of the following is not one of the primary types of the financing activities in the statement of cash flows?

 

o   Issuing shares of stock

o   Paying dividends

o   Buying equipment

o   Borrowing money

 

 

 

 

 

 

 

Practice Question 52

 A complete set of standards and consistent application is crucial.

Which of the following is one of the issues that the SEC said should be considered in deciding if the United States should adopt IFRS?

 

 

o   Whether U.S. citizens will vote to accept IFRS

o   Whether IFRS is sufficiently developed and consistent in applications

o   Whether IFRS modifies its structure to agree with current U.S. GAAP

o   Whether IFRS will eliminate U.S. GAAP

 

 

Practice Question 53

 Rather than presenting a balance sheet (as under U.S. GAAP), IFRS refers to this financial statement as the Statement of Financial Position.

Which of the following differs somewhat under IFRS compared to U.S. GAAP?

 

o   The double-entry accounting system

o   Name for the balance sheet

o   The trial balance

o   Definitions of assets and liabilities

 

 

Practice Question 49

 Purchasing manufacturing equipment is an investing activity.

On. Jan. 10, Novis Company purchased manufacturing equipment for $80,000 cash. What kind of activity is this?

o   Financing activity

o   Accrual activity

o   Investing activity

o   Operating activity

 

Practice Question 48

 Issuance of stock is a financing activity.

Issuance of stock is an investing activity.

 

o   True

o   False