Quiz #1

Question 1

Which of the following SEC filings is also sent to shareholders prior to the annual meeting and allows them to vote on the Board of Directors?

Answer 1

Proxy Statement

Question 2

Double taxation is a disadvantage to the corporate form of business. Which are the two taxes that double taxation refers to?

Answer 2

Corporate income tax AND Dividend and capital gain taxes paid by shareholders

Question 3

In 2002, the Sarbanes-Oxley Act was passed and began requiring certain positions within a publicly-traded company to sign sworn certifications to be filed with each quarterly and annual filing. These certifications state that the financial statements are accurate and free from major errors. Who (which people?) must sign these certifications with each filing? (need each position, and no extras)

Answer 3

CEO, CFO

Question 4

The heading “For the Year Ended December 31, 2018” would not be appropriate for what financial statement?

Answer 4

The Balance Sheet

Question 5

The whole point of Generally Accepted Accounting Principles (“GAAP”) is to promote:

Answer 5

comparability

Question 6

Which of the following accounts is increased with a credit?

a. Common Stock
b. Inventory
c. Dividends
d. Wages Expense
e. Land
f. All of the above are increased with a credit.

Answer 6

Common Stock

Question 7

Which of the following accounts is increased with a debit?

a. Accounts Payable
b. Retained Earnings
c. Consulting Revenue
d. Rent Expense
e. Salaries Payable

Answer 7

Rent Expense

Question 8

During the period, debit transactions of $23,000 and credit transactions of $37,000 were recorded to the Accounts Receivable account. If the account had an ending normal balance of $48,000, what was its beginning balance?

Answer 8

$62,000

Question 9

Wilson, Inc. provides $8,000 in services to a customer. Wilson receives 1/4th of the cash now and bills the customer for the remaining 3/4ths. Provide the journal entry Wilson should record.

Answer 9

Dr. Cash 2,000
Dr. A/R 6,000
Cr. Revenue 8,000

Question 10

Which of the following errors can cause the trial balance to be out of balance?

a. An entire journal entry has been omitted from the posting procedure.
b. The debit portion of an entry is posted as a credit, and the credit portion is posted as a debit.
c. A credit entry is posted to the wrong account.
d. The debit balance of an account is transferred to the credit column of the trial balance.
e. A transaction is entered in the general journal incorrectly as $107 instead of $170.

Answer 10

The debit balance of an account is transferred to the credit column of the trial balance.