FNU ACG2003 2022 October Week 4 Midterm Quiz Latest
ACG2003 Principles of Accounting
Week 4 Midterm Quiz
Question 1Revenues are reported when
a contract is signed
cash is received from the customer
work is begun on the job
work is completed on the job
Question 2Debts owed by a business are referred to as
Question 3The unit of measure concept:
is only used in the financial statements of manufacturing companies.
is not important when applying the cost concept.
requires that different units be used for assets and liabilities.
requires that economic data be reported in yen in Japan or dollars in the U.S.
Question 4The Sarbanes-Oxley Act of 2002 prohibits employment of auditors by their clients for what period after their last audit of the client?
There is no such prohibition.
Question 5Which of the following is not an asset?
Question 6The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or year, is called a(n)
prior period statement
statement of owner's equity
Question 7A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to
increase one asset, decrease another asset
decrease an asset, decrease a liability
increase an asset, increase a liability
increase an asset, increase owner's equity
Question 8Which of the following best describes accounting?
records economic data but does not communicate the data to users according to any specific rules.
is an information system that provides reports to users regarding economic activities and condition of a business.
is of no use by individuals outside of the business.
is used only for filling out tax returns and for financial statements for various type of governmental reporting requirements.
Question 9Financial reports are used by
all are correct
Question 10Which of the following entries records the payment of an account payable?
debit Cash; credit Accounts Payable
debit Accounts Receivable; credit Cash
debit Cash; credit Supplies Expense
debit Accounts Payable; credit Cash
Jim Xu, Capital
Invest cash in Xu Co.
The journal entry will:
Increase Capital and decrease Cash
Increase Cash and decrease Capital
Increase Cash and increase Capital
Decrease Cash and decrease Capital
Question 12March10Accounts Payable 3,300 Cash 3,300 Paid creditors on account
What effect does this journal entry have on the accounts?
Decrease accounts payable, increase cash
Increase cash, decrease accounts payable
Increase accounts payable, increase cash
Decrease accounts payable, decrease cash
Question 13The process of recording a transaction in the journal is called
Question 14he debit side of an account
depends on whether the account is an asset, liability or owner's equity
can be either side of the account depending on how the accountant set up the system
is the right side of the account
is the left side of the account
Question 15A debit may signify a(n)
decrease in asset accounts
decrease in liability accounts
increase in the capital account
decrease in the drawing account
Question 16Revenue should be recognized when
cash is received
the service is performed
the customer places an order
the customer charges an order
Question 17Which of the following entries records the payment of rent for the current month?
Cash, debit; Rent Expense, credit
Rent Expense, debit; Cash, credit
Rent Expense, debit; Accounts Receivable, credit
Accounts Payable, debit; Rent Expense, credit
Question 18A chart of accounts is
the same as a balance sheet
usually a listing of accounts in alphabetical order
usually a listing of accounts in financial statement order
used in place of a ledger
Question 19Using accrual accounting, revenue is recorded and reported only
when cash is received without regard to when the services are rendered
when the services are rendered without regard to when cash is received
when cash is received at the time services are rendered
if cash is received after the services are rendered
Question 20The matching concept
addresses the relationship between the journal and the balance sheet
determines whether the normal balance of an account is a debit or credit
requires that the dollar amount of debits equal the dollar amount of credits on a trial balance
determines that expenses related to revenue be reported at the same time the revenue is reported
Question 21Which of the accounting steps in the accounting process below would be completed last?
preparing the adjusted trial balance
preparing the financial statements
Question 22Deferred expenses have
not yet been recorded as expenses or paid
been recorded as expenses and paid
been incurred and paid
not yet been recorded as expenses
Question 23Deferred revenue is revenue that is
earned and the cash has been received
earned but the cash has not been received
not earned and the cash has not been received
not earned but the cash has been received
Question 24By matching revenues and expenses in the same period in which they incur
net income or loss will always be underestimated.
net income or loss will always be overestimated.
net income or loss will be properly reported on the income statement
net income or loss will not be determined.
Question 25The adjusting entry to record the depreciation of equipment for the fiscal period is
debit Depreciation Expense; credit Equipment
debit Depreciation Expense; credit Accumulated Depreciation
debit Accumulated Depreciation; credit Depreciation Expense
debit Equipment; credit Depreciation Expense
Question 26The account type and normal balance of Prepaid Expense is
Question 27Austin, Inc. made a Prepaid Rent payment of $2,800 on January 1st. The company’s monthly rent is $700. The amount of Prepaid Rent that would appear on the January 31 balance sheet after adjustment is:
Question 28The Statement of Owner’s Equity should be prepared
before the income statement and after the balance sheet
before the income statement and balance sheet
after the income statement and balance sheet
after the income statement and before the balance sheet
Question 29Closing entries
need not be journalized if adjusting entries are prepared
need not be posted if the financial statements are prepared from the work sheet
are not needed if adjusting entries are prepared
must be journalized and posted
Question 30The classified Balance Sheet will divide its Liabilities Section as the following subsections
Current Liabilities and Long-Term Liabilities
Current Liabilities and Other Liabilities
Other Liabilities and Long-Term Liabilities
Present Liabilities and Tomorrow’s Liabilities
Question 31The following are steps to the accounting cycle. Of the following, which step should be done first?
Closing entries are journalized and posted to the ledger.
Transactions are posted to the ledger.
Adjusting entries are journalized and posted to the ledger.
Financial statements are prepared.
Question 32In the accounting cycle, the last step is
preparing the financial statements
journalizing and posting the adjusting entries
preparing a post-closing trial balance
journalizing and posting the closing entries
Question 33The Balance Sheet should be prepared
before the income statement and the statement of owner’s equity
before the income statement and after the statement of owner’s equity
after the income statement and the statement of owner’s equity
after the income statement and before the statement of owner’s equity
Question 34Short-term liabilities are those liabilities that
will be paid in less than one year
are due to paid in 5 to 10 years
are due to be paid in more than one year
are liabilities owed to the owner and will never be paid
Question 35The income statement should be prepared
before the statement of owner’s equity and balance sheet
after the statement of owner’s equity and before the balance sheet
after the statement of owner’s equity and balance sheet
after the balance sheet and before the statement of owner’s equity
Question 36The worksheet
is an integral part of the accounting cycle
eliminates the need to rewrite the financial statements
is a working paper that is required
is used to summarize account balances and adjustments for the financial statements
Question 37A company, using the periodic inventory system, has merchandise inventory costing $175 on hand at the beginning of the period. During the period, merchandise costing $635 is purchased. At year-end, merchandise inventory costing $160 is on hand. The cost of merchandise sold for the year is
Question 38Multiple-step income statements show
gross profit but not income from operations
neither gross profit nor income from operations
both gross profit and income from operations
income from operations but not gross profit
Question 39Inventory shortage is recorded when
merchandise is returned by a buyer.
merchandise purchased from a seller is incomplete or short.
merchandise is returned to a seller.
there is a difference between a physical count of inventory and inventory records.
Question 40The primary difference between a periodic and perpetual inventory system is that a
periodic system determines the inventory on hand only at the end of the accounting period
periodic system keeps a record showing the inventory on hand at all times
periodic system provides an easy means to determine inventory shrinkage
periodic system records the cost of the sale on the date the sale is made