ADVANCED ATI ACCOUNTING QUESTIONS AND ANSWER

ADVANCED ATI ACCOUNTING n n n




QUESTIONS AND ANSWER n n n n



Preparing na nbudget nfor na nbusiness nis

considered nA. nFinancial nacct. n
n




B. nManagerial nacct. n- nCORRECT nANSWER n-Managerial n
n



Accounting nis nthe ninformation nsystem nthat n

A. Measures nbusiness nactivities n

B. Communicates nthe nresults nto ndecision nmakers n

C. Process ninfo ninto nreports n

D. All nof nthe nabove n- nCORRECT nANSWER n-All nof nthe nabove n
n



Which nof nthe nfollowing nis nnot nan nexternal nuser nof na nbusiness's nfinancial ninformation n

A. Taxing nauthorities n

B. Customers n

C. Employees n

D. Investors n- nCORRECT nANSWER n-Employees n
n



Which nstatement nbest ndescribes nthe naccounting

equation? nA. nThe nchange nin nretained nearnings nequals
n




net nincome nless ndividends. n
n




B. Equality nof nrevenue nand nexpense ntransactions

over ntime. n
n




C. Financing nactivities nequal ninvesting nand

operating nactivities. n
n

,D. Resources nof nthe ncompany nequal ncreditors' nand
n



owners' nclaims nto nthose nresources. n- nCORRECT nANSWER n-Resources nof nthe ncompany nequals
ncreditors nand nowners nclaims nto nthose nresources n


n



Owners' nclaims nto nthe ncompany's nresources

are nreferred nto nas: nA. nLiabilities. n
n




B. Assets. n

C. Stockholders' nequity. n

D. Net nliabilities. n- nCORRECT nANSWER n-Stockholder's nEquity n
n



If ntotal nassets nof na ncompany nequal n$25,000 nand

total nstockholders' nequity nequals n$10,000, nthen
n




total nliabilities nequal n$15,000. n
n




A. True n

B. False n- nCORRECT nANSWER n-True n
n



Amounts nowed nto nsuppliers nfor nsupplies

purchased non naccount nare ndefined nas
n



a(n): nA. nRevenue. n
n




B. Asset. n

C. Liability. n

D. Expense. n- nCORRECT nANSWER n-Liability n
n

If ntotal nliabilities nof na ncompany nequal n$29,000

and ntotal nstockholders' nequity nequals n$15,000,
n




then ntotal nassets nequal n$14,000. n
n




A. True n

,B. False n- nCORRECT nANSWER n-False n
n



Financial naccounting ndoes nnot ndeal nwith nwhich nof nthe

following? n nA. nMeasuring na ncompany's neconomic nactivity. n n
n




B. Providing ninformation nto ninternal nusers. n n

C. Preparing nfinancial nreports. n n

D. Communicating nfinancial nresults nto ninvestors. n- nCORRECT nANSWER n-Providing ninformation nto
ninternal nusers n


n



The naccounting nequation nshows nthat na ncompany's nresources nequal ncreditors' nand nowners' nclaims nto
nthose nresources. n n




A. True n n

B. False n- nCORRECT nANSWER n-True n
n



An nalternative nform nof nthe naccounting nequation

is: n nA. nAssets n-Liabilities n= nStockholders' nEquity. n n
n




B. Net nIncome n= nRevenues n-Expenses. n n

C. Stockholders' nEquity n= nAssets n+ nLiabilities. n n

D. Assets n= nLiabilities n-Stockholders' nEquity. n- nCORRECT nANSWER n-Assets n- nLiabilities n= nStockholder's
nEquity n


n



Which nof nthe nfollowing ndoes nnot nrepresent nan nasset nof na

company? n nA. nSupplies nheld nby nthe ncompany. n n
n




B. Amounts nowed nto nsuppliers. n n

C. Equipment nowned nand nused nfor noperations. n n

D. Amounts nreceivable nfrom ncustomers. n- nCORRECT nANSWER n-Amounts nowed nto nsuppliers n(liability)
n


n

, The namounts nrecorded nwhen nthe ncompany nsells nproducts nor nprovides nservices nto ncustomers nare
nreferred nto nas: n n




A. Liabilities n n

B. Revenues n n

C. Assets n n

D. Expenses n- nCORRECT nANSWER n-Revenues n(recorded nat nthe ntime nthe ncompany nprovides nthe
nservice) n


n



If na ncompany nhas nstockholders' nequity nof n$25,000 nat nthe nend nof nthe nyear, nwhich nof nthe nfollowing
nstatements nmust nbe ntrue? n n




A. The ncompany nhas nissued n$25,000 nof ncommon nstock. n n

B. Net nincome nfor nthe nyear nequals n$25,000. n n

C. The ncompany's nassets nexceed nliabilities nby n$25,000. n n

D. Total nrevenues nduring nthe nyear nequal n$25,000. n- nCORRECT nANSWER n-The ncompany's nassets
nexceed nliabilities nby n25,000 n


n



The ncosts nof nproviding ngoods nand nservices nto ncustomers nare nreferred nto nas: n n

A. Assets n n

B. Expenses n n

C. Liabilities n n

D. Revenues n- nCORRECT nANSWER n-Expenses n
n



Table n- nCORRECT nANSWER n-Check nnotes n
n

Which nof nthe nfollowing nbest ndescribes nrevenue?

n n A. nResources nof na ncompany. n n

B. Sales nof ngoods nand nservices nto na ncustomer. n n

C. Cash nreceived nfrom na ncustomer. n n