QUESTION Which of the following has to be accounted for to arrive at net sales figures for an income statement? A) refunds to customers B) owners’ equity C) cost of goods sold D) administrative expenses E) gross profit ANSWER Answer: A Explanation: A) After gross sales, the net sales must be adjusted by accounting […]
Date: September 3rd, 2020
QUESTION What are assets? A) items of immediate value B) what a company owes C) the amount of investment plus earnings D) periodic reports of a firm’s worth E) notes payable ANSWER Answer: A Explanation: A) Assets are what a company has of value that are either cash or can be easily liquidated (converted […]
Date: September 3rd, 2020
QUESTION As a potential lender, why is First State Finances interested in the level of owners’ equity at Chesapeake Zoo? A) It represents sales revenue that could be used to pay off loans. B) Owners’ equity represents easily liquidatable assets. C) It is a predictor of the firm’s profitability in the future. D) It represents […]
Date: September 3rd, 2020
QUESTION Which of the following is NOT a type of asset? A) current B) fixed C) intangible D) owners’ equity E) goodwill ANSWER Answer: D Explanation: D) Assets are of three types: current, fixed, and intangible (goodwill). Owners’ equity is NOT a type of asset; it is, rather, the value of a firm if […]
Date: September 3rd, 2020
QUESTION Which of the following could NOT be a marketable security? A) stocks B) bonds C) money market certificates D) notes payable E) government securities ANSWER Answer: D Explanation: D) Marketable securities are stocks, bonds, government securities, and money market certificates, which can be easily converted to cash. Notes payable is money owed on […]
Date: September 3rd, 2020
QUESTION What is the name given to what is owed to a firm from customers who have purchased goods or services on credit? A) accumulated depreciation B) intangible asset allocation C) merchandise inventory D) accounts receivable E) fixed asset reward ANSWER Answer: D Explanation: D) Accounts receivable is that which is owed to a […]
Date: September 3rd, 2020
QUESTION What characteristic must an asset have in order to count as a current asset? A) tangibility B) liability C) goodwill D) permanence E) liquidity ANSWER Answer: E Explanation: E) The essential characteristic of current assets is their liquidity; they are easily converted into cash, whereas assets such as land and buildings are not.
Date: September 3rd, 2020
QUESTION Suppose the total of all debits is less than the total of all credits in a double-entry bookkeeping journal. What must be the explanation for this? A) An error has occurred. B) There has been a profit for the day. C) There has been a loss for the day. D) GAAP standards were not […]
Date: September 3rd, 2020
QUESTION What is the name given to the specialized record book or computer program that contains summaries of all journal transactions by category? A) trial balance B) balance sheet C) ledger D) income statement E) statement of cash-flows ANSWER Answer: C Explanation: C) The ledger is the specialized record book or computer program that […]
Date: September 3rd, 2020
QUESTION Which of the following is NOT one of the reports or financial statements the bookkeeper issues at the end of every accounting period? A) balance sheet B) income statement C) statement of cash flows D) income tax return E) profit-and-loss statement ANSWER Answer: D Explanation: D) Once the bookkeeper has the correct figures, […]
Date: September 3rd, 2020
