ACCOUNTING WARREN ACTG313 -LONG QUIZ WITH COMPLETE
SOLUTIONS GRADED A+
Which of the following is not a principal purpose of an unadjusted trial balance? It proves that debitsand
credits were properly entered in the ledger accounts.
After all closing entries have been posted, which of the following accounts is most likely to have anonzero
balance? Wages Payable.
Which one of the following is not required to be presented as minimum information on the face ofthe
Statement of Financial Position, according to PAS 1? Contingent liability
The omission of the adjusting entry to record depreciation expense will result in an: Overstatementof
assets and an overstatement of equity.
The reporting period of an enterprise Is generally equal to one year
Which of the following is an example of transaction that results in increase in net asset? Recognitionof
income during the period.
Adjustments are often prepared After the statement of financial position date, but dated as of thatdate.
Which of the following transactions does not affect the balance sheet totals? Collecting P40,000from
customers on account.
Which of the following basic assumptions of accounting (used by the International Accounting Standards
Board) makes depreciation and amortization policies justifiable and appropriate? Goingconcern
Basic steps in the recording process include all of the following except Transfer the journal
information to the appropriate account in the statement of financial position.
Which of the following accounts is reported in the Equity section statement of financial postion?
Share capital-ordinary.
In the accounting cycle, which of the following steps is considered the output document or record?
Financial statements.
The correct order of the following steps of the accounting cycle is Posting, adjusting, closing,reversing.
Numerous errors may exist even though the trial balance columns agree. Which of the following is not
one of these types of errors? Transposition error related to the statement of financial position.
Unearned revenue on the books of one company is likely to be A prepaid expense on the books ofthe
company that made the advance payment.
Which of the following statements is incorrect concerning fair presentation of financial statements? An
entity whose financial statements comply with PFRS shall not make an explicitand unreserved
statement of such compliance in the notes.
Which of the following properly describes a deferral? Cash is received before revenue is earned.
Page 1 of 16
,The income summary account Summarizes revenue, expense, and net earnings or loss for the
accounting period.
The dividends declared account is a nominal account and Closed directly to retained earnings
Which of the following is not a principal purpose of an unadjusted trial balance? It proves thatdebits and
credits were properly entered in the ledger accounts.
Reversing entries apply to All accruals
Which of the following accounts is not closed during the closing process? Accumulateddepreciation.
Which of the following transactions is most likely not to result in an adjusting entry at the end of the
period? Payment of this month's rent.
Debit always means None of these.
The primary responsibility for the preparation and presentation of the financial statements of anentity is
reposed in the Management of the entity
If ending accounts receivable exceeds the beginning accounts receivable: Cash collections duringthe
year are less than the amount of revenue earned.
Which among the following closing procedures should a corporation use? Close the IncomeSummary
account to the Retained Earnings account.
The following relates to materiality and aggregation, except Each financial statement item shouldbe
presented separately in the financial statements.
Which one of the following types of losses is excluded from the determination of net income in income
statements? Material losses resulting from correction of errors related to prior periods.
Which of the following approaches to income measurement underlies financial accounting andreporting?
Transaction approach
Which of the following gains and losses are recognized in other comprehensive income (i.e., in total
comprehensive income outside of profit and loss)? Gains and losses arising on translating the financial
statements of a foreign operation.
The distinction between operating and nonoperating income relates to: Principal activities of the
reporting entity.
Accrual-basis net income is most useful for Predicting the long-term performance of an entity.
Which of the following options for displaying comprehensive income is preferred? A continuationfrom
net income or a separate statement that begins with net income.
Page 2 of 16
, Which of the following statements regarding limitations of the income statement is not true? The
current income statement allows several income items to be directly put on the retained earnings
statement.
The income statement item that is likely to be the most useful for predicting income from year toyear is
Income from continuing operations.
Limitations of the Statement of Comprehensive Income include all of the following, except Onlyactual
amounts are reported in determining net income
What is the purpose of reporting comprehensive income? To summarize all changes in equity from
nonowner sources.
The process of identifying, measuring and relating revenue and expenses of an enterprise for an
accounting period is known as Income determination
The approach most companies will probably use to provide information related to the components of
other comprehensive income is a Separate column in the statement of changes in stockholders'equity.
Comprehensive income can be displayed in the financial statements in all of the following formatsexcept
A separate statement that begins with other comprehensive income.
The income statement reveals Net earnings (net income) of a firm for a period of time.
Which of the following is a component of other comprehensive income? Cumulative currency-
translation adjustments.
In which section of the income statement is interest expense reported? Income before incometaxes.
Which of the following is reported as interest expense? Amortization of discount of a note.
How may a corporation report its types of comprehensive income? It may report the amount of
accumulated other comprehensive income for each item or in total as part of stockholders' equity.
Under a strict transaction approach to income measurement, which of the following would not be
considered a transaction? Adjustment of inventory to lower of cost or market valuation when market is
below cost
Which of the following items would cause earnings to differ from comprehensive income?
Unrealized loss on equity investments measured at fair value through other comprehensive
income
Which of the following is not a selling expense? Office salaries expense.
Conceptually, net income is a measure of Change of wealth
Which of the following is reported as interest expense? Imputed interest on a noninerest-bearingnote.
Page 3 of 16
SOLUTIONS GRADED A+
Which of the following is not a principal purpose of an unadjusted trial balance? It proves that debitsand
credits were properly entered in the ledger accounts.
After all closing entries have been posted, which of the following accounts is most likely to have anonzero
balance? Wages Payable.
Which one of the following is not required to be presented as minimum information on the face ofthe
Statement of Financial Position, according to PAS 1? Contingent liability
The omission of the adjusting entry to record depreciation expense will result in an: Overstatementof
assets and an overstatement of equity.
The reporting period of an enterprise Is generally equal to one year
Which of the following is an example of transaction that results in increase in net asset? Recognitionof
income during the period.
Adjustments are often prepared After the statement of financial position date, but dated as of thatdate.
Which of the following transactions does not affect the balance sheet totals? Collecting P40,000from
customers on account.
Which of the following basic assumptions of accounting (used by the International Accounting Standards
Board) makes depreciation and amortization policies justifiable and appropriate? Goingconcern
Basic steps in the recording process include all of the following except Transfer the journal
information to the appropriate account in the statement of financial position.
Which of the following accounts is reported in the Equity section statement of financial postion?
Share capital-ordinary.
In the accounting cycle, which of the following steps is considered the output document or record?
Financial statements.
The correct order of the following steps of the accounting cycle is Posting, adjusting, closing,reversing.
Numerous errors may exist even though the trial balance columns agree. Which of the following is not
one of these types of errors? Transposition error related to the statement of financial position.
Unearned revenue on the books of one company is likely to be A prepaid expense on the books ofthe
company that made the advance payment.
Which of the following statements is incorrect concerning fair presentation of financial statements? An
entity whose financial statements comply with PFRS shall not make an explicitand unreserved
statement of such compliance in the notes.
Which of the following properly describes a deferral? Cash is received before revenue is earned.
Page 1 of 16
,The income summary account Summarizes revenue, expense, and net earnings or loss for the
accounting period.
The dividends declared account is a nominal account and Closed directly to retained earnings
Which of the following is not a principal purpose of an unadjusted trial balance? It proves thatdebits and
credits were properly entered in the ledger accounts.
Reversing entries apply to All accruals
Which of the following accounts is not closed during the closing process? Accumulateddepreciation.
Which of the following transactions is most likely not to result in an adjusting entry at the end of the
period? Payment of this month's rent.
Debit always means None of these.
The primary responsibility for the preparation and presentation of the financial statements of anentity is
reposed in the Management of the entity
If ending accounts receivable exceeds the beginning accounts receivable: Cash collections duringthe
year are less than the amount of revenue earned.
Which among the following closing procedures should a corporation use? Close the IncomeSummary
account to the Retained Earnings account.
The following relates to materiality and aggregation, except Each financial statement item shouldbe
presented separately in the financial statements.
Which one of the following types of losses is excluded from the determination of net income in income
statements? Material losses resulting from correction of errors related to prior periods.
Which of the following approaches to income measurement underlies financial accounting andreporting?
Transaction approach
Which of the following gains and losses are recognized in other comprehensive income (i.e., in total
comprehensive income outside of profit and loss)? Gains and losses arising on translating the financial
statements of a foreign operation.
The distinction between operating and nonoperating income relates to: Principal activities of the
reporting entity.
Accrual-basis net income is most useful for Predicting the long-term performance of an entity.
Which of the following options for displaying comprehensive income is preferred? A continuationfrom
net income or a separate statement that begins with net income.
Page 2 of 16
, Which of the following statements regarding limitations of the income statement is not true? The
current income statement allows several income items to be directly put on the retained earnings
statement.
The income statement item that is likely to be the most useful for predicting income from year toyear is
Income from continuing operations.
Limitations of the Statement of Comprehensive Income include all of the following, except Onlyactual
amounts are reported in determining net income
What is the purpose of reporting comprehensive income? To summarize all changes in equity from
nonowner sources.
The process of identifying, measuring and relating revenue and expenses of an enterprise for an
accounting period is known as Income determination
The approach most companies will probably use to provide information related to the components of
other comprehensive income is a Separate column in the statement of changes in stockholders'equity.
Comprehensive income can be displayed in the financial statements in all of the following formatsexcept
A separate statement that begins with other comprehensive income.
The income statement reveals Net earnings (net income) of a firm for a period of time.
Which of the following is a component of other comprehensive income? Cumulative currency-
translation adjustments.
In which section of the income statement is interest expense reported? Income before incometaxes.
Which of the following is reported as interest expense? Amortization of discount of a note.
How may a corporation report its types of comprehensive income? It may report the amount of
accumulated other comprehensive income for each item or in total as part of stockholders' equity.
Under a strict transaction approach to income measurement, which of the following would not be
considered a transaction? Adjustment of inventory to lower of cost or market valuation when market is
below cost
Which of the following items would cause earnings to differ from comprehensive income?
Unrealized loss on equity investments measured at fair value through other comprehensive
income
Which of the following is not a selling expense? Office salaries expense.
Conceptually, net income is a measure of Change of wealth
Which of the following is reported as interest expense? Imputed interest on a noninerest-bearingnote.
Page 3 of 16
