ACCT 5312 Exam 2 Questions and Answers Practice Questions with Solutions Newest |
Already Graded A+
1. The current assets of most companies are usually made up of:
A. assets that are currently used in the operations of the company.
B. cash and assets expected to be converted to cash within a year.
C. a very small proportion (less than 10%) of the total assets of the entity.
D. cash, marketable securities, and accounts and notes receivable. - (Correct Answer)-cash and
assets expected to be converted to cash within a year.
2. Which of the following is the correct balance sheet presentation for current assets?
A. Cash, inventories, account receivables, prepaid expenses.
B. Cash equivalents, cash, other current assets, accounts receivable.
C. Accounts receivable, inventories, prepaid expenses, other current assets.
D. Marketable securities, cash, notes receivable, prepaid expenses. - (Correct Answer)-Accounts
receivable, inventories, prepaid expenses, other current assets.
3. The principal reason for reconciling the cash balance per books with the balance shown on the
bank statement is to:
A. determine the amount of cash in the account actually available to the entity.
B. satisfy generally accepted accounting principles.
, 2
C. verify the amount of petty cash on hand.
D. determine whether or not the entity has issued an NSF check. - (Correct Answer)-determine
the amount of cash in the account actually available to the entity.
4. For which of the following reconciling items would an adjusting entry be necessary on the
company's book?
A. A deposit in transit.
B. An error by the bank.
C. Outstanding checks.
D. A bank service charge. - (Correct Answer)-A bank service charge.
When a manufacturer invests in short-term marketable securities:
A. the return on investment is more important than the risk involved.
B. the securities are likely to have a maturity date more than a year in the future.
C. the market value of the securities is likely to fluctuate significantly.
, 3
D. risk avoidance is of great importance. - (Correct Answer)-risk avoidance is of great
importance.
6. A cash equivalent is a current asset that:
A. will be converted to cash within one year.
B. will be converted to cash within one month.
C. is readily convertible into cash with a minimal risk.
D. is readily convertible into cash with a substantial risk.
E. none of these. - (Correct Answer)-is readily convertible into cash with a minimal risk.
7. The accounting concept or principle applied when the cost of short-term marketable securities
is adjusted to market value is:
A. objectivity.
B. matching revenue and expense.
C. original cost.
D. consistency. - (Correct Answer)-matching revenue and expense.
Already Graded A+
1. The current assets of most companies are usually made up of:
A. assets that are currently used in the operations of the company.
B. cash and assets expected to be converted to cash within a year.
C. a very small proportion (less than 10%) of the total assets of the entity.
D. cash, marketable securities, and accounts and notes receivable. - (Correct Answer)-cash and
assets expected to be converted to cash within a year.
2. Which of the following is the correct balance sheet presentation for current assets?
A. Cash, inventories, account receivables, prepaid expenses.
B. Cash equivalents, cash, other current assets, accounts receivable.
C. Accounts receivable, inventories, prepaid expenses, other current assets.
D. Marketable securities, cash, notes receivable, prepaid expenses. - (Correct Answer)-Accounts
receivable, inventories, prepaid expenses, other current assets.
3. The principal reason for reconciling the cash balance per books with the balance shown on the
bank statement is to:
A. determine the amount of cash in the account actually available to the entity.
B. satisfy generally accepted accounting principles.
, 2
C. verify the amount of petty cash on hand.
D. determine whether or not the entity has issued an NSF check. - (Correct Answer)-determine
the amount of cash in the account actually available to the entity.
4. For which of the following reconciling items would an adjusting entry be necessary on the
company's book?
A. A deposit in transit.
B. An error by the bank.
C. Outstanding checks.
D. A bank service charge. - (Correct Answer)-A bank service charge.
When a manufacturer invests in short-term marketable securities:
A. the return on investment is more important than the risk involved.
B. the securities are likely to have a maturity date more than a year in the future.
C. the market value of the securities is likely to fluctuate significantly.
, 3
D. risk avoidance is of great importance. - (Correct Answer)-risk avoidance is of great
importance.
6. A cash equivalent is a current asset that:
A. will be converted to cash within one year.
B. will be converted to cash within one month.
C. is readily convertible into cash with a minimal risk.
D. is readily convertible into cash with a substantial risk.
E. none of these. - (Correct Answer)-is readily convertible into cash with a minimal risk.
7. The accounting concept or principle applied when the cost of short-term marketable securities
is adjusted to market value is:
A. objectivity.
B. matching revenue and expense.
C. original cost.
D. consistency. - (Correct Answer)-matching revenue and expense.
