Business and Finance 6-12 (276) TExES
When a company is trying to regulate its spending and track incoming funds, the
accountant should prepare an income statement once
A. every month.
B. every two months.
C. every six months.
D. every year. - ANS-Option A. every month
Income statements are usually produced once a month to ensure expense review and
control. This will allow a company to determine how much money is coming in and how
it's being spent.
Which of the following best identifies the use of debt financing to raise capital?
A. Convertible securities
B. Direct stock offerings
C. Promissory notes
D. Initial public offerings - ANS-Option C. promissory notes
A promissory note would indicate a loan and debt financing to raise capital.
Every other option raises capital by EQUITY financing
Which of the following occurs after a customer withdraws money from an automated
teller machine?
A. The customer's access privileges are checked.
B. The debit is posted to the account.
C. The connection to the server is established.
D. The system verifies that the customer has an account. - ANS-Option B. the debit is
posted to the account
After the customer has withdrawn money from the account via the ATM, the amount is
deducted from the customer's account balance.
A lending company will review a borrower's accounting documentation to evaluate
A. creditworthiness.
B. current assets to past liabilities.
C. the expenses in terms of employee risk management.
, D. the aggregate statistics relating to the likelihood that a competitor will enter the
market. - ANS-Option A.creditworthiness
Creditworthiness is the key determinant of how likely it is that the loan will be repaid.
Which of the following doctrines prevents a person from insuring a neighbor's house?
A. Doctrine of contribution
B. Doctrine of subrogation
C. Doctrine of indemnification
D. Doctrine of insurable interest - ANS-Option D. doctrine of insurable interest
Doctrine of insurable interest means that a person will suffer financial or other kinds of
loss when they lose or damage a particular property.
Which of the following inventory systems is designed to record the actual costs
associated with the inventory using a physical count?
A. The periodic inventory system
B. The perpetual inventory system
C. The temporary inventory system
D. The just-in-time inventory system - ANS-Option B. the perpetual inventory system
The perpetual inventory system is designed to record the actual costs affiliated with
inventory using a physical count.
Which of the following valuations is used to calculate the straight-line depreciation of an
asset?
A. Market value
B. Salvage value
C. Enterprise value
D. Replacement value - ANS-Option B. salvage value
Salvage value is used as a component of the depreciation calculation.
In which of the following sections of the balance sheet is prepaid insurance recorded?
A. Expenses
B. Assets
C. Liabilities
D. Equity - ANS-Option B. assets
When a company is trying to regulate its spending and track incoming funds, the
accountant should prepare an income statement once
A. every month.
B. every two months.
C. every six months.
D. every year. - ANS-Option A. every month
Income statements are usually produced once a month to ensure expense review and
control. This will allow a company to determine how much money is coming in and how
it's being spent.
Which of the following best identifies the use of debt financing to raise capital?
A. Convertible securities
B. Direct stock offerings
C. Promissory notes
D. Initial public offerings - ANS-Option C. promissory notes
A promissory note would indicate a loan and debt financing to raise capital.
Every other option raises capital by EQUITY financing
Which of the following occurs after a customer withdraws money from an automated
teller machine?
A. The customer's access privileges are checked.
B. The debit is posted to the account.
C. The connection to the server is established.
D. The system verifies that the customer has an account. - ANS-Option B. the debit is
posted to the account
After the customer has withdrawn money from the account via the ATM, the amount is
deducted from the customer's account balance.
A lending company will review a borrower's accounting documentation to evaluate
A. creditworthiness.
B. current assets to past liabilities.
C. the expenses in terms of employee risk management.
, D. the aggregate statistics relating to the likelihood that a competitor will enter the
market. - ANS-Option A.creditworthiness
Creditworthiness is the key determinant of how likely it is that the loan will be repaid.
Which of the following doctrines prevents a person from insuring a neighbor's house?
A. Doctrine of contribution
B. Doctrine of subrogation
C. Doctrine of indemnification
D. Doctrine of insurable interest - ANS-Option D. doctrine of insurable interest
Doctrine of insurable interest means that a person will suffer financial or other kinds of
loss when they lose or damage a particular property.
Which of the following inventory systems is designed to record the actual costs
associated with the inventory using a physical count?
A. The periodic inventory system
B. The perpetual inventory system
C. The temporary inventory system
D. The just-in-time inventory system - ANS-Option B. the perpetual inventory system
The perpetual inventory system is designed to record the actual costs affiliated with
inventory using a physical count.
Which of the following valuations is used to calculate the straight-line depreciation of an
asset?
A. Market value
B. Salvage value
C. Enterprise value
D. Replacement value - ANS-Option B. salvage value
Salvage value is used as a component of the depreciation calculation.
In which of the following sections of the balance sheet is prepaid insurance recorded?
A. Expenses
B. Assets
C. Liabilities
D. Equity - ANS-Option B. assets
