Accounting Principles MCQs (Chapterwise Multiple Choice Questions)

What entry would a donor make when giving a cash donation to a charity?

Dr: Revenue, Cr: Cash

Dr: Expense – Cash, Cr: Cash

Dr: Liability, Cr: Cash

Dr: Expense – Contributions, Cr: Cash

Answer & Explanation

Correct Answer: Dr: Expense – Contributions, Cr: Cash

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What is Form 10-K?

Monthly filing with the SEC reporting salaries to the directors

As needed filing to disclose any significant issues or changes

Quarterly financial reports filed with the SEC

Annual financial reports filed with the SEC

Answer & Explanation

Correct Answer: Annual financial reports filed with the SEC

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Which FASB sets the requirements for accounting for Non-Profit organizations?

FASB SFAS 999

FASB SFAS 100

FASB SFAS 99

FASB SFAS 117

Answer & Explanation

Correct Answer: FASB SFAS 117

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In which years were the Securities & Exchange Acts created?

1980 and 1981

1933 and1934

1920 and 1930

1802 and 1920

Answer & Explanation

Correct Answer: 1933 and1934

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What is the accounting objective which best relates to the double declining balance method?

Conservatism

Income Smoothing

Profit Maximization

Tax Minimization

Answer & Explanation

Correct Answer: Conservatism

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What is the acronym for the organization that promotes international harmonization of accounting standards?

IASB

FASB

SEC

IRS

Answer & Explanation

Correct Answer: IASB

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What is the accounting objective which best relates to the capitalization of prepaid advertising costs?

Profit Maximization

Accurate Presentation

Tax minimization

None of the above

Answer & Explanation

Correct Answer: Profit Maximization

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What change was made in regarding the penalization of the whistleblowers (people who alert the authorities about the illegal activities in a corporation) by the companies?

They are now themselves subject to fraud charges for uncovering the crimes

They are put under witness protection

They are offered a transfer to a new department

They are now protected against retaliation by the company in order to encourage employees to bring the wrong doings of the companies to light

Answer & Explanation

Correct Answer: They are now protected against retaliation by the company in order to encourage employees to bring the wrong doings of the companies to light

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Which of the following courses of action should a firm take in order to minimize the present value of income tax payments?

Use the LIFO inventory method instead of FIFO durating periods of rising prices

Depreciate fixed assets on the straight-line method rather than the MACRS method

Capitalize exploration costs instead of expensing them

All of the above

Answer & Explanation

Correct Answer: Use the LIFO inventory method instead of FIFO durating periods of rising prices

Note: This Question is unanswered, help us to find answer for this one

What is the accounting objective which best relates to the weighted average inventory method?

Tax Minimization

Income Smoothing

Profit Maximization

None of the above

Answer & Explanation

Correct Answer: Income Smoothing

Note: This Question is unanswered, help us to find answer for this one

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