GB 518 Unit 1 Quiz Updated
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GB 518 Quiz 1
GB518 Financial Accounting Principles and Analysis
Question : If equity is $300,000 and liabilities are $192,000, then assets equal:
Question 2. Question : If assets are $99,000 and liabilities are $32,000, then equity equals:
Question 3. Question : Reebok had income of $150 million and average assets of $1,800 million. Its return on assets is:
Question 4. Question : Unearned revenues are:
Revenues that have been earned and received in cash
Revenues that have been earned but not yet collected in cash
Liabilities created when a customer pays in advance for products or services before the revenue is earned
Recorded as an asset in the accounting records
Increases to retained earnings
Question 5. Question : Technological advancement
Has replaced accounting
Has not changed the work that accountants do
Has freed accounting professionals to concentrate more on the analysis and interpretation of information
In accounting has replaced the need for decision makers
In accounting is only available to large corporations
Question 6. Question : Of the following accounts, the one that normally has a credit balance is:
Cash
Office Equipment
Sales Salaries Payable
Dividends
Sales Salaries Expense
Question 7. Question : Net Income:
Decreases equity
Represents the amount of assets owners put into a business
Equals assets minus liabilities
Is the excess of revenues over expenses
Represents the owners' claims against assets
Question 8. Question : Internal users of accounting information include:
Shareholders
Customers
Creditors
Government regulators
Line Supervisor
Question 9. Question : A company has twice as much owner's equity as it does liabilities. If total liabilities are $50,000, what amounts of assets are owned by the company?
$50,000
$100,000
$150,000
$200,000
Question 10. Question : A credit is used to record:
An increase in an expense account
An increase in an asset account
An increase in an unearned revenue account
A decrease in a revenue account
A decrease to retained earnings
Question 11. Question : Apatha Company has assets of $600,000, liabilities of $250,000 and equity of $350,000. It buys office equipment on credit for $75,000. The effects of this transaction include:
Assets increase by $75,000 and expenses increase by $75,000
Assets increase by $75,000 and expenses decrease by $75,000
Liabilities increase by $75,000 and expenses decrease by $75,000
Assets decrease by $75,000 and expenses decrease by $75,000
Assets increase by $75,000 and liabilities increase by $75,000
Question 12. Question : The principle that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash and (3) measures the amount of revenue as the cash plus the cash equivalent value of any non-cash assets received from customers in exchange for goods or services is called the:
Going-concern principle
Cost principle
Revenue recognition principle
Objectivity principle
Business entity principle
Question 13. Question : Which of the following is the primary purpose of accounting?
To establish a business
To identify, record and communicate business transactions
To deceive stockholders
To keep from paying taxes
To establish credit for a company
Question 14. Question : Assets created by selling goods and services on credit are:
Accounts payable
Accounts receivable
Liabilities
Expenses
Question 15. Question : Double-entry accounting is an accounting system:
That records each transaction twice
That records the effects of transactions and other events in at least two accounts with equal debits and credits
In which the impact of each transaction is recorded in two or more accounts but that could include two debits and no credits
That may only be used if T-accounts are used
That insures that errors never occur
Question 16. Question : An example of a financing activity is:
Buying office supplies
Obtaining a long-term loan
Buying office equipment
Selling inventory
Buying land
Question 17. Question : A debit is:
An increase in an account
The right-hand side of a T-account
A decrease in an account
The left-hand side of a T-account
An increase to a liability account
Question 18. Question : Risk is:
Net income divided by average total assets
The reward for investment
The uncertainty about the expected return that will be earned from an investment
Unrelated to expected return
Question 19. Question : Which of the following statements best describes the relationship of U.S. GAAP and IFRS?
They are identical
They are entirely different conceptual frameworks
They are similar but not identical
Neither has anything to do with accounting
They both relate only to publicly traded companies
Question 20. Question : Source documents include all of the following except:
Sales tickets
Ledgers
Checks
Purchase orders
Bank statements
Question 21. Question : Stride Rite has total assets of $425 million. Its total liabilities are $110 million. Its equity is $315 million. Calculate the debt ratio.
38.6%
13.4%
34.9%
25.9%
14.9%
Question 22. Question : An asset created by prepayment of an expense is:
Recorded as a debit to an unearned revenue account
Recorded as a debit to a prepaid expense account
Recorded as a credit to an unearned revenue account
Recorded as a credit to a prepaid expense account
Not recorded in the accounting records until the earnings process is complete
Question 23. Question : Increases in retained earnings from a company's earnings activities are:
Assets
Revenues
Liabilities
Stockholder's Equity
Expenses
Question 24. Question : Which of the following accounting principles dictates when expenses are recognized?
Revenue recognition principle
Monetary unit principle
Business entity principle
Matching principle
Full disclosure principle
Question 25. Question : Prepaid expenses are:
Payments made for products and services that do not ever expire
Classified as liabilities on the balance sheet
Decreases in retained earnings
Assets that represent prepayments of future expenses
Promises of payments by customers
