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
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
