General Financial Accounting MCQs

1. Inventory falls under which category?

2. What type of account is allowance for doubtful accounts?

3. Which of the following is an example of a contingent liability?

4. Which of the following will be found on the income statement?

5. What is the net number calculated from the three parts of the Statement of Cash Flows?

6. A normal balance of asset accounts is journaled as a ____.

7. What are the assets of a business?

8. What method of depreciation is used most often for land?

9. What is one method for recording uncollectible receivables?

10. Accounting equation is given as

11. Why is an increase in inventory shown as a negative amount in the statement of cash flows?

12. On the cash flow statement, buying of a bond is found in the _________ section.

13. What is short-term debt considered?

14. Mergers and acquisitions are covered under which accounting concept?

15. What is considered a current asset?

16. What is the best definition of Paid-in capital?

17. Equity can be best defined as the amount of ownership left in the business after deducting total liabilities from total assets.

18. Which of these is NOT a tangible asset?

19. Which of the following is considered an internal user of financial information?

20. Which of these is NOT an intangible asset?

21. What is the best definition of Retained earnings?

22. Standard costing is usually associated with:

23. What is the difference between the accounts 'rent receivable' and 'rent revenue'?

24. The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a specific date is the

25. Which is an example of a Current Asset?

26. Which of the following is a category or element of the balance sheet?

27. An ordinary share dividend is:

28. Payments made to the shareholders of a corporation for profit are called:

29. What does AICPA stand for?

30. What is NOT one of the sections of the Cash Flow statement?

31. Which of the following is NOT an asset account?

32. On the cash flow statement, buying of a stock is found in the _________ section.

33. As found on an income statement, revenue can best be defined as:

34. Which types of entities are considered "flow through" entities?

35. What is the definition of FIFO for inventory valuation purposes?

36. Why are standard cost amounts not always equal to the actual cost amounts?

37. What is the bottom line of an income statement?

38. What is Goodwill in financial reporting?

39. What does FIFO stand for?

40. Which of the following is the Control Account?

41. What is a journal?

42. Tangible, long lived assets used in the operations of the business are classified as ____.

43. What is the definition of Current Liabilities?

44. Once a discontinued operation is disposed of, the gain or loss can be disclosed in the notes to the financial statements

45. Realized revenue means a transaction where goods and services are exchanged for cash or claims to cash.

46. The end product for an income statement is:

47. What does CPA stand for?

48. Under US GAAP, what constitutes an audit?

49. To what account group does 'cash on hand' belong?

50. What is the best definition for Salvage value?

51. Franchise Licenses are an example of:

52. What is preferred stock considered?

53. What is a patent considered?

54. If Assets = $25,000 and Liabilities = $35,000 what is the amount of equity?

55. What is plant (facility) considered?

56. Publicly traded companies employ _____ to audit the financial statements for their inclusion in reports to the shareholders.

57. Which of the following is the correct format for the balance sheet in order of occurrence?

58. The acronym for the common rules and standards that companies must follow when preparing its external financial statements is ______.

59. If Assets = $25,000 and Liabilities = $15,000 what is the amount of equity?

60. How are Accounts Receivables classified on the Balance Sheet?

61. The terms 2/10, n/30 mean?

62. A copyright is an example of:

63. What must one do to record transactions?

64. Which of the following sections would you find on a balance sheet?

65. Financial accounting serves the following purposes:

66. By law, who is the only person qualified to sign an audit report?

67. Companies registered with the Securities and Exchange Commission are required to have their financial statements audited by an external auditor.

68. What is an example of a current liability?

69. You have received cash but have not provided a service, which account should be used to record this?

70. What is the definition of posting in the accounting cycle?

71. Large corporations must follow the ___________ basis of accounting.

72. Cash balance is found in which section of the financial statements?

73. Corporations whose stock is publicly traded must have their financial statements ________ by independent certified public accountants.

74. Standard costing typically includes which of the following costs?

75. Financial accounting relies on which of the following concepts?

76. Which of the following gives the correct sequence of accounting procedures?

77. Common stock is recorded where on the financial statements?

78. ______ consist of assets that a retail or wholesale company acquires for resale or goods that manufacturers produce for sale.

79. what is IAS?

80. What account group does 'accounts receivable' belong?

81. What does LIFO stand for?

82. Accounting firms generally do many things including:

83. "EBIT" stands for____

84. What is long-term debt considered?

85. Property is listed under which category?

86. What is an example of an item that would be included in calculating comprehensive income?

87. Goodwill is an example of:

88. When a bond is sold at par, what price is it sold for?

89. Trademarks are an example of:

90. What is the FISH inventory method?

91. If the accountant forgets to record salary expense in the Statement of Income, what is the result?

92. What is taxes payable considered?

93. At January 1, 2010, the balance of equity was $200,000. During the year of 2010, revenue and expenses were as follows: Revenue = $300,000; Expenses = $240,000. What is the balance of equity at December 31, 2010?

94. What is interest payable considered?

95. What is the definition of LIFO for inventory valuation purposes?

96. What is NOT considered a current asset?

97. Under which category is Mortgage Payable?

98. What type of account Is Rent Payable?

99. Which reports allow the interested party to evaluate the profitability of a business?

100. The listing of all of the accounts available for use in a company's accounting system is known as the ?

101. What does the acronym EBITDA mean?

102. The statement of cash flows contains certain components of both the income statement and the balance sheet.

103. Net income =

104. How frequently should the 10-Q be filed for a public company?

105. Prepaid rent can be found on which part of the balance sheet

106. Generally Accepted Accounting Principles may be described as:

107. Which of the following is NOT a current asset?

108. What is bonds payable considered?

109. What is goodwill considered?

110. What does IFRS stand for?

111. If managers are granted the opportunity to buy additional firm shares at a predetermined price on or before a future date, they are said to be owners of:

112. What is not a component of interest computations?

113. A sole proprietorship is a business owned by:

114. What is the benefit of a limited liabilty corporation, LLC?

115. What is the normal balance of revenue accounts?

116. Which side of a T-account is a debit recorded?

117. Which one of the following is NOT one of the four basic income statement components?

118. GAAP generally uses one of two measurement principles. Which of the following IS one of these two principles?

119. Which of the following factors is likely to be an area of difficulty in a large multinational group of companies?

120. What is the purpose of an adjusting journal entry?

121. What is an increase in the inventory account journaled as?

122. Which of the following accounts will be found on the balance sheet?

123. Which of the following is not a current asset?

124. Which of the following would not be a current asset?

125. Rules governing financial accounting are for the benefit of:

126. Another name for the balance sheet is:

127. What type of account is Prepaid Rent?

128. Which of the following would NOT be included on a balance sheet?

129. Which one of these is financial accounting based on?

130. What is not a typical component of A Work in Progress Account?

131. What is additional paid-in-capital considered?

132. The following items are current assets except:

133. A decrease in liabilities is recorded as a:

134. What is wages payable considered?

135. Acme company has a beginning year Retained earnings balance of $10,000, Net income for the year of $5,000 and declares dividends totaling $3,000. What is the ending Retained earnings balance?

136. The personal assets of the owner of a company will not appear on the company's balance sheet because of which principle/guideline?

137. Which of the following is a long term asset?

138. Which of these is a Debit account?

139. What is the Balance Sheet version of the accounting equation?

140. Why are income taxes not incorporated into the breakeven unit sales calculation?

141. Which of the following is an asset account?

142. What type of ratio is Return On Assets (ROA)?

143. What type of account is Interest Receivable?

144. Which statement would you find accumulated depreciation?

145. What is NOT a current liability?

146. At the end of the accounting period, the revenue and expense accounts of the company are moved to what account?

147. On the cash flow statement, change in accounts payable is found in the _________ section.

148. What are the components of Double Entry accounting?

149. Which cost are trading securities reported at?

150. What is an example of a contra account?

151. What is an example of a semi-variable expense?

152. Which of these typically has a credit balance?

153. Which accounting assumption states that an enterprise will continue in operation long enough to carry out its existing objectives and commitments?

154. What is retained earnings considered?

155. An increase in revenue is journaled as a ____.

156. Which of the following is a cash expense?

157. Which of the following defines book value?

158. If a company receives cash in exchange for a note and the present value of the note is less than the amount of the note, the difference is the:

159. The financial statement that reports the revenues and expenses for a specific period of time is the:

160. Which of the following defines current assets on the balance sheet?

161. The notes to the financial statement provide details that are not shown on the financial statements.

162. Plumbing companies, beauty salons, and auto repair shops are often sole proprietorships.

163. What is the correct journal entry for the purchase of merchandise on account?

164. Which of the following defines a fixed asset?

165. The difference between the balance of a plant asset account and the related accumulated depreciation account is the asset's _____.

166. If a business owner wants to protect him/herself from liabilities associated with their business, it is recommended that he/she establish a sole proprietorship.

167. On the cash flow statement, a change in accounts receivable is found in the _________ section.

168. Are audited financial statements guaranteed to be free of error?

169. What does a business owe all of its assets to?

170. A snapshot of the company best correlates to which financial statement?

171. What are the types of expenses that will increase and decrease in the same direction as movement in sales?

172. What does a debit signify in bookkeeping?

173. Which of the following assets is the hardest to liquidate?

174. Which of the following defines market value?

175. What is the best definition of Net Working Capital?

176. The multiple-step income statement for a merchandiser shows each of the following features except:

177. With a decrease in an expense, you must _____ the account.

178. For a material item to be classified as an extraordinary item on the income statement, it must be:

179. The current ratio is an indicator of which following characteristic of an organization?

180. On the cash flow statement, depreciation is found in the _________ section.

181. On the cash flow statement, taxes paid are found in the _________ section.

182. What is the purpose of a subsidiary ledger?

183. What is true about a contra account?

184. (US GAAP ) You pay a dividend, what happens on the cash flow statement and in which section?

185. What is NOT an example of an expense account?

186. On the financial statements, a long-term asset is reported:

187. On the Statement of Cashflows, the Indirect and Direct methods for the Cashflows from operations must equal each other.

188. Which of the following is true regarding the comparison between managerial and financial accounting?

189. Deciding whether to record a sale when the order for services is received or when the services are performed is an example of a

190. To account for an increase in Accounts Payable:

191. What is the basic financial statement equation?

192. Which one of the following is NOT a principle of GAAP (US)?

193. Which of the following defines liabilities on the balance sheet?

194. Current assets MINUS current liabilities is:

195. Summarize IAS 1 (IFRS).

196. In the USA, how frequently are public companies required to release financial performance?

197. Components of the financial statements include:

198. Which of the following measures the number of times a company sold its average level of inventory during the period?

199. What is considered a prepaid expense?

200. The fair value principal indicates that assets and ____ should be reported at fair value (the priced received to sell an asset or settle ____).

201. At which cost are sale securities reported?

202. Which accounting method reflects the matching principle?

203. What is not a typical inventory account for a manufacturer?

204. What is one reason for the Shareholder's Equity balance to be negative?

205. An account a retail business would have _________, but a service business wouldn't.

206. If a newspaper company receives an annual subscription payment prior to delivering any papers, what is the initial accounting entry?

207. What is a fundamental concept of accrual accounting?

208. What is the best definition of Expense?

209. How does a company adjust its financial statements for the effect of inflation?

210. What is another definition for "recognizing" revenue?

211. A complete set of financial statements for Hartman Company, at December 31, 1999, would include each of the following, except:

212. On the cash flow statement, repayment of long-term debt is found in the _________ section.

213. On the cash flow statement, proceeds from issuing bonds are found in the _________ section.

214. A firm is purchasing equipment for its operations. The equipment has a useful life of 7 years. On the firm’s financial statements the equipment should be recorded as:

215. Which is considered a cash expense?

216. A decrease in equity from a Net Income loss will be a:

217. ABC Co. incurs cleanup expense of $500 on December 30, 2010. The supplier's invoice states that the $500 is due by January 10, 2011. ABC follows the accrual basis of accounting and its accounting year ends on December 31. What is the effect of the cleanup service on the December balance sheet of ABC?

218. The normal balance for equity accounts:

219. What are the two methods acceptable to present cash flows from operating activities?

220. What are two criteria for identifying an economic event as an Extraordinary item?

221. What type of account is Member Distributions?

222. You issue bonds, what happens on the cash flow statement and in which section?

223. A client pays ABC Co. $10,000 in December to perform services in 45 days. ABC uses the accrual basis of accounting. In December ABC will debit Cash for $10,000. What will be the other account to balance this entry prepared by ABC?

224. What is the journal entry for salary?

225. When a sale is made with the credit terms 2/10 net 30, the 2 refers to the:

226. What is the equivalent of a "real account"?

227. What is the net book value of a noncurrent asset?

228. Which is considered to be liability?

229. The Governmental Accounting Standards Board defines general capital assets as all Capital assets other than those accounted for in Proprietary funds or trust funds.

230. Assets are usually reported on the balance sheet at which amount?

231. How do you calculate gross profit percentage?

232. What do negative amounts on the Statement of Cash Flow depict?

233. Internal users are individuals and organizations outside a company who want financial information about the company.

234. How do you calculate straight-line depreciation?

235. Which of the following will be found on the balance sheet?

236. Which account is at the bottom of the Statement of Cash Flows, displaying: _____ at the beginning and at the end of the period?

237. What is NOT an acceptable depreciation method?

238. The cost principal dictates that companies record ____ at their cost.

239. What is an investment in stocks considered?

240. Recording revenues when earned and expenses when incurred is associated with what basis of accounting?

241. The quick ratio EXCLUDES which of the following?

242. If a firm has a great deal of inventory built up which of the following ratios would be the largest?

243. What is a deferred income?

244. What is an example of an extraordinary item?

245. If you own 40% of a company, what is the appropriate accounting method?

246. Which is not a method to account for the loss of receivables?

247. Which of the following can be found in the FINANCING section of the cash flow statement?

248. What is the normal balance for contra asset accounts?

249. ABC Co. has current assets of $50,000 and total assets of $150,000. ABC has current liabilities of $30,000 and total liabilities of $80,000. What is the amount of ABC's owner's equity?

250. Which is NOT an intangible asset?

251. What is an investment in bonds considered?

252. You purchase $1200 worth of inventory on credit. Your journal entries would have __

253. Accrual basis of accounting is considered better than the cash basis because:

254. What is a deposit in transit?

255. Which of the following accounts is a contra account?

256. In accrual accounting, the matching principle states that:

257. Contra Asset Account means?

258. Balance sheet provides Financial position of an organization

259. What is a Perpetual Inventory System?

260. Which is NOT one of the major categories on a cash flow statement?

261. Under IFRS the following costs are expensed:

262. Where is the line item Paid-in Capital in excess of Par?

263. What determines if work performed on an owned building's roof is expensed?

264. What is an appropriate set of journal entries to recognize the declaration of dividends?

265. Which of the following principles does NOT result in adjusting entries being made?

266. On the cash flow statement, proceeds from issuing stock are found in the _________ section.

267. Which is not one of the principles of US GAAP?

268. What is on the right side of the trial balance?

269. What is the economic entity assumption?

270. The monetary unit assumption enables accounting to _____ economic events.

271. If you own 30% of a company, what is the appropriate accounting method?

272. Accumulated Depreciation is a(n) ___ on the balance sheet.

273. Which is NOT a common method of depreciation?

274. What is the formula for Net Profit Margin?

275. In a cash flow statement the payment of a preference dividend will be included:

276. Which of the following can be found in the INVESTING section of the cash flow statement?

277. What is the balance of all revenue and expense accounts once closed to Revenue summary?

278. What are supplies considered?

279. Deferred credits will appear on the balance sheet in which category?

280. On the cash flow statement, dividends paid are found in the _________ section.

281. Under the Securites and Exchange Act of 1933, ("1933 Act") which forms must be filed by U.S. registrants.

282. The best definition of noncurrent assets is:

283. How frequently should the 10-K be filed for a public company?

284. What is a contra-account for Accounts Receivable?

285. When a company pays dividends, which type of cash flow does this represent?

286. The annual form every public company must file with the SEC is called:

287. Which of the following can be found in the OPERATING section of the income statement?

288. (US GAAP ) Your accounts receivable increases from the prior year, what happens on the cash flow statement and in which section?

289. Each payment on a mortgage note payable consists of:

290. What is NOT true about assets on the balance sheet?

291. (US GAAP ) Your accounts receivable drops from the prior year. What happens on the cash flow statement and in which section?

292. On the cash flow statement, net income is found in the _________ section.

293. What is the best definition for Depletion?

294. Assets are depreciated:

295. Which of the following is not closed out to a zero balance in the closing entries?

296. Free Cash Flow (FCF) is best described as:

297. An example of financial expense in a multistep income statement would be:

298. A business has prepared its accounts for a financial year and these show a profit of $600 000. The accounts do not include the following items: • a likely loss on a contract of $100,000 • a possible Court ruling in favor of the company which is likely to increase profits by $10 000 • a possible Court ruling against the company which could result in damages of between $5 000 to $10 000. Having regard to the fundamental accounting concepts, which of the following revised profit which figures is correct when the above factors are taken in to account?

299. The U.S. government agency with authority over the financial reporting requirements of publicly traded corporations is the _______.

300. What is the best definition for Amortization?

301. Under straight-line depreciation, what percent of the cost of equipment to be allocated will be recognized in the third year of a 5 year economic life?

302. If the balance of inventories is $5,000 at 1/1/2010 and $3,500 at 12/31/2010, how is that represented on the Statement of cashflows?

303. Which organization is most like IASB, but monitors and improves the standards under US GAAP?

304. What are the journal entries for a company issuing 1,000 shares of stock at $8/share issue price and no par value?

305. Which of the following statements regarding revenue recognition is FALSE?

306. Cash flow statements are required by:

307. When is an expense recognized under the matching principle?

308. When the expensed tax rate changes, deferred tax:

309. Which type of lease is reflected on a company's balance sheet?

310. The purpose of the income statement is to show cash sources and uses during a specific period of time.

311. Where are gains / losses shown for securities classified as trading securities?

312. What is the impact to Net cash provided by (used for) financing activities from a company issuing long-term debt?

313. What is the formula for Asset Turnover Ratio?

314. Which of the following would NOT be an adjustment to net income using the indirect method?

315. If Company X issued 10,000 shares with a stated value of $1 per share at $5 a share, how would this transaction be reflected on their balance sheet?

316. Where is comprehensive income reported in the income statement?

317. According to IFRS 18 revenue recognition, revenue is recognized:

318. What is the formula for Accounts Receivable Turnover Ratio?

319. Acme company has 5,000 shares outstanding, and Retained earnings balance of $12,000. If Acme declares a dividend of $3/share, what is the resulting Retained earnings balance?

320. In the financial statements, when a convertible bond is retired, it is shown as:

321. Which of the following statements is true about the reporting of operating segments by a business?

322. On the cash flow statement, amortization is found in the _________ section.

323. If the balance of accounts receivable is $2,000 at 1/1/2010 and $3,500 at 12/31/2010, how is that represented on the Statement of Cash Flows?

324. What is the formula for Return on Equity (ROE)?

325. A company began the accounting period with $50,000 in owner’s capital, ended with $75,000 in owner’s capital, and the owner withdrew $30,000 during the period for personal use. What was the company’s net income or loss for the period?

326. The book value of an asset is its:

327. Which of the following line items are part of cost of goods sold?

328. What is the formula for Return on Assets (ROA)?

329. Under which classification on the balance sheet would Notes Payable NOT appear?

330. What is an example of a noncurrent liability?

331. What is the asset method of adjusting entries?

332. If beginning capital was $25,000, ending capital is $37,000, and the owner's withdrawals were $23,000, the amount of net income or net loss for the period was:

333. (US GAAP ) Your accounts payable drops from the prior year, what happens on the cash flow statement and in which section?

334. What is the formula for Price Earnings (PE) Ratio?

335. What is the formula for Earnings Per Share (EPS)?

336. Which business components are reported in Discontinued Operations?

337. If you accept payment in advance of delivering services, you debit cash and credit what?

338. (US GAAP ) Your accounts payable increases from the prior year, what happens on the cash flow statement and in which section?

339. What is the order of cash sources (uses) as presented in the Statement of Cash Flows?

340. What is factoring of accounts receivable?

341. Which of the following is the classification of a redeemable preference share?

342. Which of the following would normally be a current liability?

343. If the balance of accounts payable is $8,000 at 1/1/2010 and $6,500 at 12/31/2010, how is that represented on the Statement of cashflows?

344. What is a basis point?

345. What is done with the transactions in a company?

346. What line item will always be a positive amount on the Statement of Cash Flows (Indirect Method)?

347. On the cash flow statement, depletion is found in the _________ section.

348. Johnny’s Car Repair Shop started the year with total assets of $60,000 and total liabilities of $40,000. During the year the business recorded $100,000 in car repair revenues, $55,000 in expenses, and dividends of $10,000. The net income reported by Johnny’s Car Repair Shop for the year was:

349. After the initial recognition, bonds payable shall be measured at amortized cost using:

350. In the annual report, where would a financial statement reader find out if the company’s financial statements give a fair depiction of its financial position and operating results?

351. Financial statements report the current market value of a company.

352. Which of the following accounts is not closed using the Income Summary Account

353. Why is the Balance sheet referred to as a "picture in time"?

354. What is a compensating balance of cash?

355. What is the common period of time that a fixed expense is assumed to be unchangeable?

356. Unearned Subscription Revenue is recorded:

357. A large company purchases a $250 digital camera and expenses it immediately instead of recording it as an asset and depreciating it over its useful life. This practice may be acceptable because of which principle/guideline?

358. What is an example of an asset that is not stated at acquisition (historical) cost?

359. Which is considered Extraordinary Items?

360. GAAP and Tax code depreciation methodologies are always economically equivalent in the first year the asset is put into use.

361. Notes to Financial Statements are given to

362. Every transaction will affect how many accounts?

363. If ending inventory is overcounted (overstated in value) the following is understated:

364. Common size income statements express all income statement items as a percentage of:

365. What is an example of a period cost?

366. What is an example of judgement and estimation used in accounting?

367. When a capital lease is initiated, what value is it recorded at on the balance sheet?

368. Land is reported on the Balance Sheet at:

369. XYZ, Inc. is closing books for July. It has spent 12,000USD for air conditioning on the weekend for employees working overtime. On which financial statement will this figure appear?

370. Which of the following are the components of owners' equity section of the balance sheet?

371. Typically, increasing interest rates:

372. Choose the correct statement about GAAP.

373. While analyzing the financial statements, an analyst should:

374. When calculating earnings per share (EPS) for firms with complex capital structures, stock options are ordinarily considered to be:

375. The following information pertains to Bayside Corporation: Equipment purchase: $50,000 Salvage value: $5,000 Useful life: 7 years Year-1 depreciation: $14,285.70 What depreciation method does Bayside Corporation use?

376. What is the formula for Quick Ratio?

377. How is deferred revenue treated under accrual basis accounting?

378. What is the formula for Working Capital Turnover Ratio?

379. A sinking fund, pension fund or plant expansion fund are all examples of what?

380. In regards to measuring and recording acquisition cost, what is the cost principle?

381. On the financial statements, an income tax payable is recorded as debit:

382. All of the following are recognized depreciation methods for GAAP reporting EXCEPT:

383. Diluted EPS, as compared to EPS, takes into consideration all of these additional variables, except:

384. National Auto uses debt, preferred stock, and common stock to finance operations. Calculation of the cost of capital requires identification of the:

385. What is the formula for Interest Coverage Ratio?

386. What is one of the requirements for a business component to be reported in Discontinued Operations?

387. An investment that the holder tends to sell in 30 days or less is classified as a:

388. On the cash flow statement, dividends received from stock is found in the _________ section.

389. What is a Closing Entry?

390. Public companies use external auditors to issue an opinion on their financial statements. The opinion that expresses that all statements are presently fairly and in accordance with GAAP is:

391. How is a contribution margin ratio calculated?

392. Which of the following defines a permanent account?

393. If a company using accrual accounting has quarterly (end of quarter) interest payments on a bond, what will they recognize at the end of the first month of the quarter?

394. According to GAAP, How is deferred revenue treated under cash basis accounting?

395. What is the formula for Inventory Turnover?

396. What is the formula for Inventory Turnover Ratio?

397. A company with a Z-Score above 3.0 is likely to fail.

398. An increase in interest rates is most likely to benefit:

399. What is the first line item of the Cashflows from operating activities under the Indirect method?

400. What is a format that is NOT acceptable for reporting comprehensive income?

401. For the input for product, what are two usual cost variances that are measured for direct materials?

402. The company uses BTC Bank to process customer credit cards payments. The fees charged by BTC Bank are called:

403. Unearned revenue on a company's balance sheet is an:

404. Neutrality means that financial accounting information should

405. Material events that have an uncertain outcome will be reported where?

406. Revenue recognized after cash has been received follows which accounting method?

407. What is the formula for Debt to Equity Ratio?

408. What is NOT true about Unearned Revenue?

409. Stock splits affect the following accounts when booked:

410. What is the internal rate of return?

411. What is NOT a typical classification for a receivable?

412. When you pay an expense via company credit card what general ledger category is credited?

413. When the return on equity equation (ROE) is decomposed, what three ratios comprise the components of ROE?

414. A pension fund is:

415. What accounts are NOT considered "Other Comprehensive Income?"

416. On the cash flow statement, disposal of a business or subsidiary is found in the _________ section.

417. What is the balance sheet presentation of a Note Payable discount?

418. Discount on Bonds Payable:

419. What are acceptable accounting treatments to recognize the cost of intangible assets over time?

420. A company must account for its investment in another company's stock using the equity method when they own more than:

421. What does ACFE stand for?

422. Which of the following parties is least likely to benefit from risky strategies that increase risk and expected return for a company?

423. What type of activity is a purchase of treasury stock-

424. What does CFE stand for?

425. Investors (such as suppliers and bankers) use accounting information to evaluate the risks of granting credit or lending money.

426. What is withholding tax?

427. What is an example of a defined benefit retirement plan?

428. If Acme issued 8,000 shares of common stock with par value of $1 per share and an issue price of $4 per share, what is the starting balance of paid-in-capital?

429. What is the formula for Book Value of Equity Per Common Share?

430. What is a type of an affirmative covenant required by a lender?

431. The United States government set the standards outlined in US GAAP?

432. FOXCO sells 1000 shares with a par value of $1.00 for $10.00 per share. What is the amount of paid in capital?

433. Based upon the conservatism accounting principle, when should a gain on sale of property disposal be recognized?

434. If a company receives cash in exchange for a note and the present value of the note is less than the amount of the note, the difference is :

435. The purpose of the closing process is

436. Acme Co. sold a piece of equipment for $10,000; the depreciated value was $2,000; what is reflected on the Cashflows from investing activities in the period of disposal?

437. What causes a corporation’s market value to be greater than its book value?

438. When the debit side of the trial balance equals the credit side, the trial balance is error free.

439. In cash flow statement what will be the treatment of Dividends paid?

440. Which of the following is not considered as financial statement under GAAP?

441. Karson Inc. issues 10-year bonds with a maturity value of $200,000. If the bonds are issued at a premium, this indicates that:

442. In analyzing a company's financial statements, which financial statement would a potential investor use primarily to assess the company's liquidity and financial flexibility?

443. Under a debt restructuring involving substantial modification of terms, the future cash flows under the new terms should be discounted using:

444. How is Loss on sale of assets accounted for on the Statement of Cash Flows?

445. The control features of a bank account do not include:

446. Which of the following is considered non-current liabilities?

447. Accounts payable; a liability account that identifies an obligation to pay suppliers in the near future. Before the account can be transfered to the_____the_____must be reconciled to____.

448. For accounting purposes, which of the following is NOT an essential characteristic of an asset?

449. A bond is issued at 101 above par. How are the excess proceeds recorded by the issuer?

450. Which of the following is a pervasive constraint on the information that can be provided by financial reporting

451. In a period of deflation, the cost flow method that results in the lowest income taxes is the:

452. Acme Co. had Shareholder's Equity of $50,000 at 1/1/2010. During 2010 the company issued common stock for proceeds of $100,000, paid dividends of $10,000 and purchased treasury stock for $20,000. The Cashflows from financing activities section will reflect:

453. A cash basis statement to report a company's revenues and expenses is called:

454. What will be the Price-Earnings Ratio if the Basic Earnings per Share is $1.80 and market price of each share is $27?

455. Goods totaling $50,000 were puchased Febuary 2 with the terms of 2/10, n/30. Returns of $10,000 were made on Febuary 10. What discount, if any, can be availed of if the invoice was paid Febuary 12?

456. What is the equation for asset turnover?

457. The lessee's carrying amount of an asset from the capitalization of a lease would be periodically reduced is defined by:

458. Net Cash Provided By Operating Activities divided by Average Total Liabilities is also known as:

459. Is a slogan or jingle sometimes reported as an asset on the balance sheet? If so, categorized under what?

460. Under IFRS, which is NOT correct in relation to the treatment of assets?

461. (US GAAP ) You declare a dividend. What happens on the cash flow statement and in which section?

462. Accruals occur when the cash flow comes _____ either expense or revenue recognition.

463. A company recently acquires 85% control over another company. They account for this investment under the initial value method. The subsidiary earns $100,000 income during the year, pays $75,000 dividends, and has excess amortizations of $10,000. How much should the investment in sub account increase as a result of these operations?

464. Revenue is recognized when it is both earned and realized.

465. At 12/31/10 there were 1,000,000 shares issued and 300,000 where held as treasury stock. During 2011, 100,000 shares were excercised via stock options and the company repurchased 50,000 of its outstanding shares. How many shares were outstanding as of 12/31/11?

466. Under US GAAP, if you own 75% of a company, what is the appropriate accounting method?

467. A fixed asset that is fully depreciated would:

468. An intangible asset may be amortized for a maximum of:

469. An analyst gathered the following information about a company: • 01/01/01 - 20,000 shares issued and outstanding at the beginning of the year • 04/01/01 - 5.0% stock dividend • 07/01/01 - 5,000 shares repurchased • 10/01/01 - 2:1 stock split What is the company’s weighted average number of shares outstanding at the end of 2001?

470. If a company issues stock to another company in order to acquire a parcel of land, where will that transaction be reflected in the Statement of cashflows?

471. Simons Company is purchasing land to build a new factory. The following are the expenses incurred to purchase the land: • Purchase price of the land $150,000 • Real estate commissions $10,500 • Back property taxes $5,000 • Survey $5,000 At what amount should Simons record the land?

472. Where, in order on the Income statement, is the reporting of discontinued operations?

473. What type of transaction is not included in Comprehensive income reporting?

474. Which of the following is not classified as financial asset?

475. Under IFRS, what is the appropriate accounting treatment for ownership over 50%?

476. What is the formula for Dividend Yield?

477. How does GAAP require companies to treat R&D Expense?

478. Which ratio or formula would provide the most accurate picture of a company's liquidity situation if it could not sell it's inventory to help cover its' debts?

479. If a company issues stock to another company in order to acquire a parcel of land, where will that transaction be disclosed (if material)?

480. What is an example of an adjusting journal entry?

481. What will be the subsequent measurement of investments in equity instruments that do not have a quoted price in an active market and whose fair value cannot be reliably determined?

482. Which of the following is considered a cash expense?

483. ABC Ltd has declared an ordinary share dividend of £200,000 at 31/12/2011. Which of the following correctly explains the accounting entries for the dividend at the year end?

484. Which of the following would NOT be reported below the line?

485. Reggy Company expects to have a record year, with net income increasing by 20 percent. Reggy would like to share this increase with stockholders, how would Reggy record this? As a:

486. Which of the following statements correctly summarizes the key characteristics of a sole trader’s business?

487. What is the gain or loss on disposal of an asset if at the time of the disposal its cost is $100000, the Bookvalue is $50000, and it sold for $30000?

488. In calculating the income to be reported for two different segments of a company, general operating expenses must be allocated between the two. How should this allocation be made?

489. What is not an allowance method for uncollectible receivables?

490. What is NOT a line item that would be found in the Cashflows from financing activities

491. Which of the following is among the items reported on the income statement "above the line" on a pretax basis?

492. According to the IASB Framework, the process of reporting an item in the financial statements of an entity is:

493. Which of the following is an example of a deferral?

494. What is prime cost?

495. Which cost are held-to-maturity securities reported at?

496. Under FASB 13, to qualify as a capital lease and not an operating lease, which of the following is true?

497. Closing entries reset the balances of each revenue and expense account to zero and transfer these balances to _________.

498. For a firm with a simple capital structure, all of the following are necessary to measure basic earnings per share (EPS) EXCEPT:

499. Which of the following should not be taken into account when determining the cost of inventories?

500. Directors of a limited company are under an obligation to:

501. Under SFAS 115, which is not a category for securities?

502. On July 1, 2014, PQR Company received a $150,000 simple interest note for 5 months at 12% simple interest from ABC Trading. After 3 months, PQR needed cash so it discounted the note at the MEBank at a discount rate of 14%. How much will PQR receive as a proceeds from the discounting of the notes?

503. What is a definition of appropriated retained earnings?

504. Miller Investments has $50,000 in liabilities and $50,000 in stockholders’ equity. If Miller issues debt with warrants of $50,000, and attached warrants are valued at $10,000, the firm’s debt-to-equity ratio after the issue will be:

505. MJG Company has the following information: *Net Loss = 100,000 *Total Assets = 3,000,000 *Common Stock, Dec 31 = 1,000,000 *Additional Paid in Capital = 500,000 *Dividends Declared = 700,000 The debt-to-equity ratio is 50% at December 31. What was the retained earnings on January 1?

506. Where would purchased treasury stock with cash be classified on the Statement of cashflows?

507. Revenues are deferred to a balance sheet liability account until they are earned in a later period. The account is called:

508. Compared to its 2004 cash-basis net income, Potoma Co.'s 2004 accrual-basis net income increased when it:

509. Which is equivalent to Horizontal analysis?

510. How are funds used for development of a patent that are NOT expensed on the Income Statement accounted for on the Cashflow statement?

511. What is an example of a temporary account?

512. Which of the following is correct for two companies that want to file a consolidated tax return as an affiliated group?

513. When bonds are redeemed before maturity, the gain or loss on redemption is the difference between the cash paid and the:

514. What is the definition of a contribution margin?

515. Which of the following does NOT have a dilutive effect on earnings per share?

516. One million shares of common stock outstanding at the beginning of 1999 • 200,000 shares issued on the last day of March • 500,000 shares issued on the last day of June • 800,000 shares issued on the last day of September. What is the number of shares that should be used to compute 1999 earnings per share for the QRK Company?

517. A company has cash of $30,000, accounts receivable of $150,000, inventory of $140,000, and accounts payable of $200,000. Which of the following is correct?

518. A warranty payable is recorded as:

519. What is an example of a financial transaction that does not incorporate the time value of money?

520. All of the following are shown on the income statement net of tax EXCEPT:

521. The RR Corporation had cash flow from operations of $20 million. RR purchased $5 million in equipment and sold $3 million of equipment during the period. Cash flows from financing were $2 million. What is RR's free cash flow for the period (in millions)?

522. Which one is not The Fraud Triangle?

523. Called up capital can be more than:

524. A material loss should be presented separately as a component of income from continuing operations when it is:

525. In a period of inflation, inventory valuation with the LIFO methodology would be higher or lower than if the firm had adopted the FIFO methodology?

526. Reporting accounts receivable at net realizable value is a departure from the accounting principle of:

527. If you own 5% of a company, what is the appropriate accounting method?

528. In Year One, a company is sued for $500,000 and believes that it is reasonably possible that it will lose between $200,000 and $350,000 but probable that it will lose between $140,000 and $200,000. In Year Two, the law suit is settled for $190,000. What income effect should the company recognize in Year Two?

529. A new asset has been received in exchange for an old asset. What is the most likely value to be used in recording the newly-received asset?

530. What is another term for a claim to a firm's resources?

531. For US companies, what is the most common method of presenting Cashflows from operating activities?

532. Extraordinary income statement amounts are shown after comprehensive income is calculated.

533. Under GAAP which method is NOT allowed for writing-off bad debts

534. What is the equivalent of a nominal account?

535. At the beginning of 2001, Osami Corporation had 1.4 million shares of common stock outstanding and no preferred stock. At the end of August 2001, Osami issued 1.2 million new shares of common stock. If Osami reported net income equal to $7.2 million, what were its earnings per share (EPS) for 2001?

536. Which of the following would be included in the cost of goods sold calculation of an income statement?

537. Summarize IAS 3 (IFRS).

538. How is the contribution margin used to calculate a firm's breakeven unit amount?

539. Deferred credits will appear on the balance sheet as:

540. Employer payroll taxes do not include:

541. How does a preparer of financial statements differentiate a firm's revenues and a firm's recognized gains?

542. Which of the following transactions would not be treated as a reversing entry on the first day of the new accounting period?

543. At the beginning of this year Aramed had 400,000 shares of common stock outstanding. Aramed paid a 10 percent stock dividend on March 31 of this year. Aramed issued 90,000 new common shares on June 20 of this year and repurchased 12,000 shares on December 1. The number of shares Aramed should use in computing earnings per share at the end of the year is:

544. Retained earnings is equal to

545. At what point in time are shareholders entitled to a cash dividend?

546. Summarize IFRS 3 (IFRS).

547. What is the purpose of an 8-K filing with the SEC?

548. When bonds are converted into common stock:

549. What are two key elements of the comparability accounting principle?

550. How is an adjunct account different from a contra account?

551. Which of the following is considered to be a non-operational income statement item?

552. Which of the following statements about agency problems is TRUE?

553. When a company issues a stock dividend which of the following would be affected?

554. For a discontinued operation, what is the date at which management formally commits itself to a formal plan to dispose of the business segment?

555. What is the impact to Net cash provided by (used for) financing activities of interest paid on long-term debt?

556. What is the formula for Dividend Payout Ratio?

557. (US GAAP ) You have depreciation for the past year, what happens on the cash flow statement and in which section?

558. When closing stock increases, what is the effect on gross profit?

559. Under straight-line depreciation, what amount of the cost of equipment (less salvage value) purchased 9/1/2010 will be recognized in calendar year 2015 for an asset with a 5 year economic life?

560. How would an investor expect to see carrying costs for a natural resource extraction company? (e.g. mining, drilling, timber)

561. A sinking fund is a(n):

562. Various standard-setting bodies, in consultation with the accounting profession and the business community, determine guidelines for GAAP. Which of the following standard-setting bodies does NOT contribute to enhancing GAAP?

563. The initial recording of unearned revenue would generate a:

564. A business receives a check from a customer for £256 in full agreed settlement of an account which showed a debit balance of £270. Which of the following entries correctly records this transaction?

565. In a cash flow statement a bonus issue will:

566. Where in the financial statements of a company, would you most typically find operating leases?

567. What does FASB No. 142 represent?

568. One item reported as an element of other comprehensive income is:

569. Which is NOT one of the criteria of determining if a lease should be considered a capital lease?

570. (US GAAP ) You receive a dividend, what happens on the cash flow statement and in which section?

571. What is the best definition of an Asset basis?

572. Can equities be classified as held-to-maturity?

573. What is NOT a line item that would be found in the Cashflows from investing activities?

574. Under US GAAP, what is the appropriate accounting treatment for ownership under 20%?

575. Summarize IAS 7 (IFRS).

576. A consignee (the agent selling the goods) will include the value of the inventory for sale on their balance sheet while they are in possession of the saleable goods.

577. If a company has negative net income the net change in cash on the Statement of cashflows will also be negative.

578. Generally, where are gains / losses shown for securities classified as available for sale securities?

579. Under US GAAP, if you own 50% of a company, what is the appropriate accounting method?

580. How are prior period adjustments reflected in current net income?

581. Which of the following will be NOT found on the cash flow statement?

582. How do you calculate double declining depreciation (first year)?

583. A firm has a patent that they would like to expense over its useful life. Which of the following would the firm credit to record this expense over the patent’s life?

584. The basic earnings per share calculation excludes:

585. Regarding bank reconciliation, Adjusting entries are made for which of the following reconciling adjustments?

586. What is the formula for Price/Book Ratio

587. International Financial Reporting Standard IFRS 7 deals with the reporting of:

588. On the cash flow statement, interest received from a bond is found in the _________ section.

589. Which of the following would be reported as an investing activity in a company's statement of cash flows?

590. The deferred tax liability can have a much larger balance than other liability accounts because:

591. Which type of a capital structure contains no dilutive securities?

592. Summarize FAS 160.

593. Q-Tell Incorporated is in the communications industry and has the same absolute dollar level of current liabilities as the average firm in the industry. The current ratio and quick ratio for Q-Tell and the communications industry are as follows: Industry: Current Ratio of 3.0, Quick Ratio of 2.5 Q-Tell: Current Ratio of 3.0, Quick Ratio of 2.1 Relative to the communications industry Q-Tell is most likely to have:

594. A ________ defines the problem or purpose of your research.

595. Corporations sell equity in the form of ________.

596. Savings compounded ____________ would have the highest effective yield

597. Nike's "just do it" advertising is an example of ______.

598. The goal-setting theory has most value in countries where ________.

599. Fixed operating costs ________.

600. ________ is designed to meet the needs of internal decision makers.

601. _____ involves outsourcing production to third-party firms.

602. The amount of cash interest the borrower pays each year is based on the ________.

603. When you purchase an item in a store, you may be charged __________. a

604. The _________ of forecasting is a process of gaining consensus from a group of experts.

605. The journal entry for accrued interest on a note payable includes ________.

606. _____ are the amounts the corporation owes to various creditors.

607. A compensating balance on a bank loan effectively ____________ the cost of the loan.

608. An investor with a strong appetite for risk should purchase a(n) ________.

609. _____ is a mechanism for mitigating potential agency problems.

610. Buying a car is an example of _____.

611. Buying on credit ____ the amount of working capital needed by the business doing the buying.

612. The ability to charter banks is an example of a ________ power.

613. The annual dividend yield is computed by dividing _____ annual dividend by the current stock price.

614. U.s. depository institutions may be subject to as many as ______________ separate regulators.

615. The type of mutual fund that is unmanaged is called a(n) ____ fund.

616. The largest proportion of long-term mutual fund assets is held by ___________________.

617. The top four categories of bond ratings are collectively known as __________.

618. Moving averages are ______ indicators.

619. The fund whose main objective is to simply match the market known as a(n) ____ fund.

620. The nyse hybrid market allows _____.

621. As investors approach retirement age, they are often more interested in ______ portfolios.

622. Bonds of a single issue that mature on different dates are called ____________ bonds.

623. According to the efficient market hypothesis, prices of actively traded stocks ________.

624. If the expected return is above the required return on an asset, rational investors will ________.

625. ______ option can only be exercised on the expiration date.

626. If investors overweight recent performance in forecasting the future, they are exhibiting _______.

627. If you believed in the reversal effect, you should __________.

628. _____________ are examples of investment bankers offering traditional commercial banking services.

629. A _____ is a formal iou issued by a corporation or government entity.

630. Empirical results estimated from historical data indicate that betas _________.

631. Employers often provide _____ life insurance as a fringe benefit for their employees.

632. A(n) _____ is a noninterest-paying demand deposit account.

633. Borrowing money ________

634. Debt payments can be handled through either debt-repayment needs or ____ needs.

635. Differences in ________ explain why interest rates on treasury securities are not all the same.

636. Interest rates on ____ are typically lower than on any other form of consumer credit.

637. Investing online is usually ________ than trading through a traditional stock brokerage firm.

638. In an argumentative essay, the premises of the argument __________.

639. Investing money in a retirement fund is part of a plan for achieving _____.