Final Exam 101 -- BB Quiz

Question 1

What is the correct expression of the accounting equation?

Answer 1

Assets = Liabilities + Owner’s Equity

Question 2

Which financial statement reports an entity’s financial position at a specific date?

Answer 2

Balance Sheet

Question 3

The purchase of office equipment on credit has what effect on the accounting equation?

Answer 3

Assets Increase

Liabilities Increase

Question 4

The system of accounting in which there are at least two accounts affected in every transaction so that the

Answer 4

Double-entry system

Question 5

A file or book which contains a record for all accounts used by a company, including the account balance, is called a

Answer 5

General Ledger

Question 6

Which pair of accounts has the same set of rules for debits and credits/

Answer 6

Equipment and Salaries Expense

Question 7

What does NOT occur during the closing process

Answer 7

journal entries are made to return the balances in all real accounts to zero – does NOT occur during the closing process

Question 8

Silverstone Corp. sold merchandise to a customer on credit. The invoice amount was $1000; the invoice date was June 10, credit terms were 1/10, n/30. When should the customer pay?

Answer 8

The customer should pay $1000 if the invoice is paid on July 9

Question 9

The recognition of cost of goods sold (cogs) expense in the same period that sales revenue is recognized from the sale of merchandise is a good example of the

Answer 9

matching principle

Question 10

During a period of increasing cost prices, which inventory costing method will yield the lowest cost of goods sold?

Answer 10

FIFO

Question 11

What is an example of item that would be added to the balance per bank statement in a bank reconciliation?

Answer 11

Deposits in Transit

Question 12

Zenephia Corp. invested chase in a 9-month certificate of deposit (CD) on October 1, 2010. If Zenephia has an accounting period which ends on December 31, 2010, when would it most likely recognize interest revenue from the CD?

Answer 12

Both December 31, 2010 and July 1, 2011

Question 13

What is an accurate description of Allowance for Doubtful Accounts?

Answer 13

Contra Account

Question 14

What is a set of factors that is needed to calculate depreciation on plan and equipment?

Answer 14

The estimated life of the asset
Its acquisition cost
Its estimated residual value

Question 15

Research and development costs as

Answer 15

Treated as an expense when incurred

Question 16

The total amount of simple interest calculated annually on a $6000 note payable for 3 years at 11% is

Answer 16

$1,980

6000 * .11 = 660 (amount of interest per year)
660 * 3 = 1980 (for 3 years)

Question 17

When will bonds sell at a discount?

Answer 17

The face rate of interest is less than the market rate of interest at eh time of issue

Question 18

Give an example of an account in stockholders’ equity

Answer 18

Retained Earnings

Question 19

Give an example of what would be considered a cash equivalent if it was held at the balance sheet date?

Answer 19

US Treasuty bill purchased when there were 90 days until maturity

Question 20

When using the indirect method, how is the purchase of equipment for cash shown on the Statement of Cash Flows?

Answer 20

Investing Activity