FINANCIAL ACCOUNTING EXAM
QUESTIONS AND THEIR VERIFIED
ANSWERS
The accounting process is correctly sequenced as
identification, recording, communication.
The economic entity assumption requires that the
activities
of an entity be kept separate from the activities of its
owner.
If total liabilities decreased by $50,000 and
stockholders' equity increased by $30,000 during a
period of time, then total assets must change by what
amount and direction during that same period?
$20,000 decrease
The primary purpose of the statement of cash flows is
to report
information about cash receipts and cash payments of a
company.
The organization(s) primarily responsible for
establishing generally accepted accounting principles
is(are) the
FASB SEC
Yes No
Which one of the following represents the expanded
basic accounting equation?
, Assets + Dividends + Expenses = Liabilities + Common
stock + Retained Earnings + Revenues.
TransAm Mail Service purchased equipment for
$2,500. TransAm paid $400 in cash and signed a note
for the balance. TransAm debited the Equipment
account, credited Cash and
credited a liability account for $2,100.
The first step in the recording process is to
analyze each transaction for its effect on the accounts.
The ledger should be arranged in
financial statement order.
The steps in preparing a trial balance include all of the
following except
transferring journal amounts to ledger accounts.
An accounting time period that is one year in length,
but does not begin on January 1, is referred to as
a fiscal year.
If a resource has been consumed but a bill has not
been received at the end of the accounting period,
then
an adjusting entry should be made recognizing the
expense.
The difference between the cost of a depreciable asset
and its related accumulated depreciation is referred to
as the
book value of the asset.
NWA Air Charter signed a four-month note payable in
the amount of $20,000 on September 1. The note
requires interest at an annual rate of 9%. The amount
of interest to be accrued at the end of September is
$150.
QUESTIONS AND THEIR VERIFIED
ANSWERS
The accounting process is correctly sequenced as
identification, recording, communication.
The economic entity assumption requires that the
activities
of an entity be kept separate from the activities of its
owner.
If total liabilities decreased by $50,000 and
stockholders' equity increased by $30,000 during a
period of time, then total assets must change by what
amount and direction during that same period?
$20,000 decrease
The primary purpose of the statement of cash flows is
to report
information about cash receipts and cash payments of a
company.
The organization(s) primarily responsible for
establishing generally accepted accounting principles
is(are) the
FASB SEC
Yes No
Which one of the following represents the expanded
basic accounting equation?
, Assets + Dividends + Expenses = Liabilities + Common
stock + Retained Earnings + Revenues.
TransAm Mail Service purchased equipment for
$2,500. TransAm paid $400 in cash and signed a note
for the balance. TransAm debited the Equipment
account, credited Cash and
credited a liability account for $2,100.
The first step in the recording process is to
analyze each transaction for its effect on the accounts.
The ledger should be arranged in
financial statement order.
The steps in preparing a trial balance include all of the
following except
transferring journal amounts to ledger accounts.
An accounting time period that is one year in length,
but does not begin on January 1, is referred to as
a fiscal year.
If a resource has been consumed but a bill has not
been received at the end of the accounting period,
then
an adjusting entry should be made recognizing the
expense.
The difference between the cost of a depreciable asset
and its related accumulated depreciation is referred to
as the
book value of the asset.
NWA Air Charter signed a four-month note payable in
the amount of $20,000 on September 1. The note
requires interest at an annual rate of 9%. The amount
of interest to be accrued at the end of September is
$150.
