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Please answer the below in 15 mins, urgent. tahnks in advance:
1.The Tom Root Corporation guarantees its product againstdefects for one year. In what year should the corporation reportthe warranty expense?
a. The cost of warranty is included in the product's sellingprice, and therefore warranty expense is never recorded.
b. in the year the product is sold
c. Expense is not disclosed because of the Liability forWarranty.
d. in the year the product becomes defective and is repaired orreplaced
2.Financial accounting focuses on the specific needs of decisionmakers external to the organization. Which of the following wouldnot be an external user?
a. Internal Revenue Service
b. Vice President - Marketing
When dividends are paid,
a. total assets remain the same.
b. total assets will decrease.
c. total assets will increase.
d. stockholders' equity will increase.
The basic rights usually attached to shares of common stockinclude:
a. the guaranteed right to receive dividend payments eachyear.
b. the right to determine CEO's pay rate.
c. the right to vote on the matter brought before the annualshareholder meeting.
d. all of the above.
Outstanding shares of stock are:
a. shares of stock owned by unknown individuals.
b. issued shares that are still in circulation.
c. also called treasury shares.
d. authorized shares that have not yet been issued.
a. specifies the exact amount for which an individual share ofstock must be sold.
b. is the maximum amount for which a share of stock may besold.
c. establishes the minimum price for the stock when issued.
d. is an amount determined by the marketplace when shares ofstock are sold.
Which of the following would not be a source of informationabout the financial condition of a company?
a. the auditor's report
b. the company's 10K
c. articles in the business press
d. All of the above are sources.
In making investment and lending decisions:
a. there is no relationship between risk and rate of return.
b. alternatives with the highest return generally have thelowest risk.
c. alternatives with the highest risk are selected.
d. alternatives with the lowest return generally have the lowestrisk.
8.ith which of the following would creditors be mostconcerned?
c. future security prices
d. none of the above
A fiscal year:
a. is any twelve consecutive months.
b. ends on December 31.
c. always ends at the end of the month.
d. end on June 30.
The key components in measuring income are:
a. assets and liabilities.
b. revenue and liabilities.
c. retained earnings and expenses.
d. revenue and expenses.
e. expenses and assets.
f. revenue and assets.
11.Which of the following help(s) determine when a sale shouldbe included in the income statement?
a. recognition principle
b. cost recovery principle
c. matching principle
d. Both a. and c.
The recording of expenses in the same time period as the relatedrevenues is called:
1. Which of the following identifies the proper order of theaccounting cycle?
A. Analyze, Journalize, Unadjusted Trial Balance
B. Analyze, Post, Unadjusted Trial Balance
C. Journalize, Post, Adjusted Trial Balance
D. Unadjusted Trial Balance, Adjusted Trial Balance, Close
E. Adjusted Trial Balance, Adjustments, Financial Statements
2. Interim financial statements refer to financial reports:
A. That cover less than one year, usually spanning one, three orsix-month periods
B. That are prepared before any adjustments have beenrecorded
C. That show the assets above the liabilities and theliabilities above the equity
D. Where revenues are reported on the income statement when cashis received and expenses are reported when cash is paid
E. Where the adjustment process is used to assign revenues tothe periods in which they are earned and to match expenses withrevenues
3. The accounting principle that requires revenue to be reportedwhen earned is the:
A. Matching principle
B. Revenue recognition principle
C. Time period principle
D. Accrual reporting principle
E. Going-concern principle
4. Adjusting entries:
A. Affect only income statement accounts
B. Affect only balance sheet accounts
C. Affect both income statement and balance sheet accounts
D. Affect only cash flow statement accounts
E. Affect only equity accounts
5. The system of preparing financial statements based onrecognizing revenues when the cash is received and reportingexpenses when the cash is paid is called:
A. Accrual basis accounting
B. Operating cycle accounting
C. Cash basis accounting
D. Revenue recognition accounting
E. Current basis accounting
6. If throughout an accounting period the fees for legalservices paid in advance by clients are recorded in an accountcalled Unearned Legal Fees, the end-of-period adjusting entry torecord the portion of those fees that has been earned is:
A. Debit Cash and credit Legal Fees Earned
B. Debit Cash and credit Unearned Legal Fees
C. Debit Unearned Legal Fees and credit Legal Fees Earned
D. Debit Legal Fees Earned and credit Unearned Legal Fees
E. Debit Unearned Legal Fees and credit Accounts Receivable
7. A company had no office supplies available at the beginningof the year. During the year, the company purchased $250 worth ofoffice supplies. On December 31, $75 worth of office suppliesremained. How much should the company report as office suppliesexpense for the year? A. $75 B. $125 C. $175 D. $250 E. $325 8. OnJanuary 1 a company purchased a five-year insurance policy for$1,800 with coverage starting immediately. If the purchase wasrecorded in the Prepaid Insurance account and the company recordsadjustments only at year-end, the adjusting entry at the end of thefirst year is:
A. Debit Prepaid Insurance, $1,800; credit Cash, $1,800
B. Debit Prepaid Insurance, $1,440; credit Insurance Expense,$1,440
C. Debit Prepaid Insurance, $360; credit Insurance Expense,$360
D. Debit Insurance Expense, $360; credit Prepaid Insurance,$360
E. Debit Insurance Expense, $360; credit Prepaid Insurance,$1,440
9. Unearned revenue is reported on the financial statementsas:
A. A revenue on the balance sheet
B. A liability on the balance sheet
C. An unearned revenue on the income statement
D. An asset on the balance sheet
E. An operating activity on the statement of cash flows
10. Which of the following assets is not depreciated?
A. Store fixtures
11. On April 30, 2011, a three-year insurance policy waspurchased for $18,000 with coverage to begin immediately. What isthe amount of insurance expense that would appear on the company'sincome statement for the year ended December 31, 2011? A. $500 B.$4,000 C. $6,000 D. $14,000 E. $18,000 12. Expenses incurred butunpaid that are recorded during the adjusting process with a debitto an expense and a credit to a liability are:
A. Intangible expenses
B. Prepaid expenses
C. Unearned expenses
D. Net expenses
E. Accrued expenses
13 The difference between the cost of an asset and theaccumulated depreciation for that asset is called
A. Depreciation Expense
B. Unearned Depreciation
C. Prepaid Depreciation
D. Depreciation Value
E. Book Value
14. A company purchased a new truck at a cost of $42,000 on July1, 2011. The truck is estimated to have a useful life of 6 yearsand a salvage value of $3,000. How much depreciation expense willbe recorded for the truck for the year ended December 31, 2011?
15. A company's Office Supplies account shows a beginningbalance of $600 and an ending balance of $400. If office suppliesexpense for the year is $3,100, what amount of office supplies waspurchased during the period?
SECTION II: MATCHING (10 possible points)Please match the numbered terms with their definitions by placingthe letter that identifies the best definition in the blank spacenext to the term. The value of each correct answer is 1point.____ 1. Accrual Basis____ 2. Cost Principle
____ 3. Credit ____ 4. Debit
____ 5. Generally Accepted Accounting Principles(GAAP)____ 6. General Ledger____ 7. Journal____ 8. Liquidity
____ 9. Matching Principle
____ 10. Materiality
A. The various methods, rules, practices, and other proceduresthat have evolved over time in response to the need to regulate the preparation offinancial statements. B. The magnitude of an omission or misstatement in accountinginformation that will affect the judgment of someone relying on theinformation.
C. A book, file, hard drive, or other devices containing all ofa companyâs accounts.
D. An entry on the left side of an account.
E. An entry on the right side of an account.
F. A chronological record of transactions, also known as thebook of original entry.
G. The association of revenue ofa period with all of the costs necessary to generate thatrevenue.
H. Assets are recorded at the cost to acquire them.I. The ability of a company to pay the debts as they comedue.J. A system of accounting in which revenues are recognized whenearned and expenses are recognized when incurred.
SECTION III. SHORT ANSWER
1. Explain the difference between internal andexternal users of a corporationâs financial information. Give twoexamples of internal users and two ofexternal users.
2. How do financial accounting andmanagement accounting differ?
3. What does relevance mean with regard to theuse of accounting information?
4. Briefly explain the purpose of a TrialBalance.
5. Explain briefly the Revenue RecognitionPrinciple. When should a publisher of magazines recognizerevenue?