Texas A&M University (TAMU) ACCT 209 Survey of Accounting Principles Exam 1 Practice

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• Which element provides the auditor's opinion regarding the financial statements?
• Do the benefits of including information in the financial statements exceed the cost of providing it?
• Overall, after adjusting for supplies used and accrued salaries, the net income would ...
• Which statement shows the ending balance in Retained Earnings used on the Balance Sheet?
• Dividends are best described as which of the following?
• Which of the following is an asset?
• Contributed capital is the amount owners invest in the business and is represented by which account?
• Prepaid Insurance: normal _____ balance (plus side)
• What is notes payable?
• Which principle states that all information that could be important to a decision maker must be reported?
• Every adjusting entry will affect both the income statement and the balance sheet. True or False?
• Who are the owners of a corporation?
• Which financial statement is also known as the Profit and Loss Statement?
• Financial accounting provides information to external users.
• The collection of all accounts of a firm is called the?
• On which financial statement would revenues and expenses appear?
• If two owners invest $15,000 each and the company borrows $37,000 from a bank, what is the equity of the new business?
• Which of the following is a liability?
• Bosque Corp. began operations on January 2, 2013 with an investment of $50. Net income for the first year of operations was $84 and the corp. paid out dividends of $45. What amount of retained earnings will appear on Bosque's December 31, 2013 balance sheet?
• What is accounts payable?
• Which account would appear on the balance sheet as a liability after recording accrued salaries?
• Which financial statement shows the changes in retained earnings during a period?
• After posting from the journals, which ledger provides the balances for all accounts?
• Which statement best describes the relationship in the accounting equation?
• Which concept ensures that for every debit entry there is a corresponding credit entry?
• Which of the following is an asset?
• Which term describes the owners' claim to the assets?
• The right side of a T account represents which of the following?
• Stockholders' Equity represents which of the following?
• What are the two sides of the double-entry accounting system?
• Which of the following is an asset?
• What are quantitative reports called that describe the operations, financial position, and cash flows of an organization?
• If unearned revenue is earned, which adjusting entry should be recorded?
• Who conducts the Auditor's Report?
• Which of the following is a liability?
• Which organization provides international accounting standards?
• Which of the following describes the effect of receiving cash from customers for services to be performed?
• Which statement shows the results of operations for a period of time?
• Retained earnings represent which type of claim on the company?
• The left side of a T account represents which of the following?
• Which concept expresses that assets equal liabilities plus stockholders' equity?
• Which type of accounting requires that revenues be recorded when earned and expenses incurred?
• Assets received in exchange for services performed affect which financial statement element?
• Which financial statement reports only revenues and expenses?
• Accounts Receivable is categorized under which general ledger category?
• Costs incurred for advertising affect which type of account?
• Two items have an effect on retained earnings. What are they?
• When equipment is purchased on account, which accounts are affected?
• Which accounts are affected when a company bills customers for services performed on account?
• Which account is an expense?
• Which RE appears on the balance sheet?
• Who is the primary audience for managerial accounting information?
• Which of the following is not an element of the annual report?
• On September 1, a company received $4,800 for services to be performed over the next 6 months, with an equal amount of work to be completed each month. If no adjusting entry is made on December 31, which statement is true regarding net income?
• Which board is responsible for setting accounting standards outside the United States?
• A question about prepaid insurance at year-end: if the expired portion is $3,000, which choice correctly represents the ending balance of Prepaid Insurance?
• Which transaction should NOT be recorded by a new business?
• The April 1 purchase on account would cause which accounts to change?
• Which equation correctly represents the income statement format?
• Which of the following is always a stockholders' equity account?
• Which agency was created by Congress to protect investors by ensuring that all investors have access to high quality financial information?
• The accounting equation is: Assets = Liabilities + Owners' Equity. What is this known as?
• Bosque Corp. began operations on January 2, 2013 with an investment of $50. Net income for the first year of operations was $84 and the corp. paid out dividends of $45. Assuming the revenues for the year were $195, how much were expenses?
• Prepaid rent and unearned revenue are accounts that generally need to be adjusted at the end of the accounting period. True or False?
• Cash received in advance for services to be performed later increases which account immediately?
• Which agency protects investors by ensuring that all investors have access to high quality financial information?
• Which of the following represents the major types of transactions that affect retained earnings?
• A company purchased office supplies on account during April for $2,600. Beginning supplies balance on April 1 was $350. Ending supplies on April 30 was $140. Supplies used during April were $2,810. What amount should appear on the April 30 balance sheet as Supplies, and what amount should appear on the April income statement as Supplies Expense?
• In an accounting T-account, which side represents debits?
• Which are the usual balances (the plus side) of assets, liabilities, and stockholders' equity?
• In a trial balance, the totals of which two types of balances must be equal?
• An important rule to remember when working with T accounts is which of the following?
• Which end-of-period entry is used to update revenue and expense accounts and balances in asset and liability accounts?
• Which statement best describes the effect of revenue on stockholders' equity?
• Which of the following is a liability?
• What is cash?
• Which of the following is an asset?
• On December 1, AMPCO received $1,200 in advance for 6-month subscriptions, with the first issue mailed December 15. AMPCO increased unearned revenue when cash was received. If the magazines were sent as promised, what adjusting entry should AMPCO record on December 31?
• Which of the following is NOT an asset?
• Which system of recording transactions requires that debits equal credits?
• Which account has a normal debit balance among the following: Cash, Common Stock, Unearned Revenue, Prepaid Insurance?
• Cash received from investors affects which component of owners' equity?
• Which financial statement reports a company's financial position as of a specific date?
• Dividends have which normal balance?
• Assets are resources expected to provide what?
• Cash received for services that will be performed at a later date affects equity how?
• A+ Magazine collected $60,000 in cash for a 12-month subscription before publishing its first issue in June 2015. How much revenue should be recognized on the December 31, 2015 income statement?
• Which statement shows the profitability for a period?
• Which of the following describes the effect on stockholders' equity when services are performed for which cash had been received?
• Paying a utility bill previously recorded as a liability results in which changes to assets and liabilities?
• Under accrual accounting, when are expenses recognized?
• What is the relationship between Supplies Used and Supplies Expense for April?
• Which organization sets accounting standards in the United States?
• Ending Retained Earnings appears on which financial statement?
• Which equation represents the Balance Sheet format?
• What is dental equipment?
• To evaluate whether a firm has strong revenue growth, which financial statement should you look at?
• Which of the following is an asset?
• Which element offers management's discussion and analysis of financial results?
• Which concept increases a company's resources from customers?
• Salaries Payable has which normal balance?
• Which of the following is an asset?
• Which document is used to initially record each transaction before posting to the ledger?
• If a company purchases machinery costing $45,000 by issuing a Note Payable, which of the following best describes the effect on the accounting equation?
• The adjusting entry for accrued salaries would cause stockholders' equity to ...
• Given beginning Supplies of $350, purchases of $2,600, and ending Supplies of $140, what is the Supplies Expense for April?
• What is the main purpose of the Auditor's Report?
• Under the Cost Concept, at what amount will Amarillo Co. record the land?
• Retained Earnings has which normal balance?
• Which of the following statements is true about adjusting entries when the service has been provided and revenue is earned?
• GAAP stands for which of the following in accounting?
• Which of the following is an asset?
• Which type increases on the debit side?
• Dividends have what effect on retained earnings?
• Which element of the annual report includes the notes to the financial statements?
• Service Revenue: normal _____ balance (plus side)
• If net income was 84 and dividends 45, what is the change in retained earnings?
• What happens to assets when cash is received from customers billed previously?
• What is the more detailed annual report filed with the SEC within 60 days after the end of the fiscal year?
• Which financial statement is typically prepared first in the accounting cycle?
• A separate legal entity owned by stockholders is a?
• Under the Cost Principle, assets must be recorded at what amount when acquired?
• A company receives cash in advance for services to be performed in the future. How should this be recorded initially?
• Which of the following is an asset?
• What amount should appear as Supplies on April 30 balance sheet?
• Some accounts do not need to be adjusted at the end of the period. Which option best reflects this idea?
• On September 1 a company paid $9,000 for six months insurance to cover the period of September 1-February 28. The balance sheet on December 31 should include prepaid insurance of how much?
• Recording accrued salaries increases which accounts?
• Which statement would you consult to understand changes in equity during a period?
• Managerial accounting provides information to company management (internal users).
• Which equity account directly reflects owner contributions to the business?
• A company purchased office supplies on account during April for $2,600. Payment for the supplies will be made in May. On April 1, the balance in the supplies account had a balance of $350. On April 30, supplies on hand amounted to $140. What was the amount of supplies used during April?
• Which statement shows changes in the equity accounts for a period?
• What is dental fees earned?
• Which financial statement would you consult to understand changes in cash balance over the period?
• Which statement shows the financial position at a point in time, with assets = liabilities + owners' equity?
• Which statement about the rules of debits and credits is correct?
• Which financial statement reports net income for a period?
• Which adjusting-entry pair correctly reflects recording an incurred expense for insurance by debiting Insurance Expense and crediting Prepaid Insurance?
• Which event would increase stockholders' equity?
• Which independent, seven-member organization was created by the SEC to set accounting standards?
• When a company purchases a building by signing a 30-year mortgage note payable, what is the effect on assets, liabilities, and stockholders' equity?
• Which guideline requires income to be recorded when earned, rather than when cash is received from the customer?
• The primary role of accounting is to determine the amount of taxes a company will owe.
• Which system requires every transaction to have a debit and a credit?
• Which statement lists the assets, liabilities, and equity of a company as of a date?
• What is the effect of paying a utility bill previously recorded?
• If an account is an asset, what is its typical normal balance?
• The accrual basis of accounting generally which of the following?
• Accounts payable: normal _____ balance (plus side)
• Which account would be classified as an asset?
• At the end of the fiscal year, the usual adjusting entry to prepaid insurance to record expired insurance was accidentally omitted. Which statement is true?
• Which financial statement shows how much net income is distributed to stockholders?
• If the net income reported is $58,000 but adjusting entries for supplies used of $2,200 and accrued salaries of $1,300 were not recorded, what is the correct net income?
• Which of the following is an element of the annual report (10-K)?
• Common stock: normal _____ balance (plus side)
• Which statement shows changes in cash for a period of time?
• Which system required by US GAAP guides the timing of recording revenues and expenses?
• When do adjusting entries occur?
• What is a 10-K?
• Which of the following is an asset?
• Which of the following is NOT an asset?
• Which document shows the ending balance in Retained Earnings used for the Balance Sheet?
• For all asset, expense, and dividends accounts, the account balance is increased on the ______ side. For all other accounts, the balance is increased on the ______ side.
• Which qualitative characteristic constraint allows accountants to treat unimportant items expediently?
• Which option correctly identifies a liability arising from a transaction?
• What is the connecting link between the income statement and the balance sheet?
• What order must you PREPARE (not present) the financial statements?
• Which of the following accounts is an asset?
• Why must you prepare the financial statements in a certain order?
• The April 1 purchase of office supplies on account for $2,600 would affect which accounts?
• Management's Discussion and Analysis (MD&A) is a section of which document?
• Which of the following is a stockholders' equity account?
• Which financial statement serves as the connecting link between the income statement and the balance sheet?
• If an account is a liability, what is its typical normal balance?
• Which of the following accounts is a liability?
• Distributing cash to stockholders affects which account most directly?
• What is the goal of accounting?
• Liabilities are best described as which of the following?
• Which of the following is a liability?
• Cash: normal _____ balance (plus side)
• Unearned Revenue: normal _____ balance (plus side)
• Which of the following is a liability?
• What term refers to the accumulated total of net income earned by the organization in excess of the dividends distributed to owners?
• Which statement shows the changes in retained earnings over a period of time?
• Which statement regarding a trial balance is NOT true?
• Which of the following describes the effect of receiving but did not pay a utility bill?
• Under accrual accounting, when is revenue recorded and reported?
• What is retained earnings?
• Which components make up the foundational accounting equation?
• Which statement reports a company's financial position as of a specific date?
• Which term describes the process of analyzing, organizing and recording financial information and reporting this information to decision makers?
• Which type of account is Inventory?
• A company has assets of $23,000 at the beginning of September. During September, the company received $8,800 in cash and billed customers $3,600 for services performed. The company also purchased $1,600 of equipment on account, and paid employees $400 in wages. What is the total assets at the end of September?
• Who has primary responsibility for the financial statements?
• Under accrual accounting, when is revenue recognized for a service performed in June if payment was received in May?
• What is unearned revenue?
• What type of entry is recorded at the end of the accounting period to ensure revenues and expenses are properly reported and to update the balances of assets and liabilities?
• Which financial statement shows how net income affects owners' equity over a period?
• Which statement presents the formal presentation of the accounting equation?
• A list of accounts and their balances, prepared to prove that the ledger accounts are in balance is called what?
• Supplies Expense has which normal balance?
• What is the effect on assets, liabilities, and stockholders' equity when cash is received from customers billed previously?
• If the retained earnings account increases from the beginning to the end of the year, which statement is true?
• What is the normal balance of Supplies Expense, and on which side does it increase?
• Which financial statement shows the changes in retained earnings during a period?
• Which statement shows the primary effect of recognizing revenue?
• Which accounts increase with credit entries?
• What is the correct effect on the accounting equation when equipment is purchased on account?
• Which of the following is a liability?
• Which statement best describes the effects on assets, liabilities, and stockholders' equity when purchasing a building with a mortgage?
• The normal balance side for liabilities is...
• Which of the following is a liability?
• Which term describes the day-to-day recording of financial transactions, often used interchangeably with bookkeeping?
• Which of the following is an asset?
• Marketable Securities are classified as which type of account?
• MD&A discusses results and future goals and is included in which report?
• What is advertising expense?
• Which of the following accounts is classified as an asset?
• Which is an equity account?
• Costs incurred for supplies used affect which type of account?
• Which term describes an event that has a financial impact and can be recorded in dollars?
• Which of the following would usually be increased on the debit side?
• To assess risk from debt relative to stockholders' equity, which financial statement is most informative?
• When services are performed for which cash had been received previously, what is the effect on assets, liabilities, and stockholders' equity?
• Which equation represents the Statement of Retained Earnings format?
• Cash distributed to stockholders affects which account most directly?
• Which financial statement reports the cash receipts and payments over a period?
• Adjusting entries are prepared at the end of the accounting period to update selected accounts.
• What is accounts receivable?
• The adjusting entry to record accrued salaries at year-end would have what effect on the accounting equation?
• Which of the following is a stockholders' equity account?
• After all described adjustments, which statement best describes the effect on net income?
• Which account is a revenue?
• Which of the following describes the effect of an owner investing cash in the business in exchange for stock?
• Which financial statement would you consult to assess profitability over a period?
• Which of the following represents an adjusting entry for depreciation?
• A cash purchase of equipment has what effect on owners' equity?
• Which of the following describes the effect of performing services and collecting cash from customers?
• Which guideline states that expenses should be reported in the same period as the revenues that the expense helped generate?
• The original purchase of office supplies for $2,600 was made on account. At that time, which of the following statements is true?
• Which of the following pairs of accounts could not appear in the same adjusting entry?
• If adjusting entries for supplies used of $2,200 and for accrued salaries of $1,300 were not recorded, the correct net income is ...
• The book of original entry that provides a chronological record of each transaction is called the?
• Individuals or organizations that hold the ownership of corporations
• Which statement describes the purpose of the Statement of Retained Earnings?
• GAAP stands for which phrase?
• Which equation updates Retained Earnings for the period?
• What term refers to the guidelines that help accountants in recording business transactions and reporting financial information?
• Which term refers to the recording part of the accounting process?
• Which transaction increases both assets and stockholders' equity?
• Which concept decreases resources due to generating revenue?
• Which financial statement would you consult to assess liquidity and debt levels at a point in time?
• Which statement would include Cash, Receivables, and Payables?
• An event that has a financial impact on an organization and can be recorded in a dollar amount is called what?