GB518 Unit3 Midterm Exam

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GB518 Unit3 Midterm ExamReport this Question as Inappropriate1.What would be the appropriate entry for the following transaction?Bill Co. performed $5,200 in consulting services on account (Points : 2)Credit to Cash, Debit to AccountsReceivableDebit to Revenue, Debit to CashDebit to Accounts Receivable, Credit to CashDebit to Revenue, Credit to CashDebit to Accounts Receivable, Credit to Revenue2.Technological advancement (Points : 2)Has replaced accountingHas not changed the work that accountants doHas freed accounting professionals to concentrate more on the analysis and interpretation ofinformationIn accounting has replaced the need for decision makersIn accounting is only available to large corporations3.Which of the following elements are found on the Balance Sheet? (Points : 2)Service RevenueNet IncomeOperating ActivitiesUtilities ExpenseRetained Earnings4.Increases in retained earnings from a company's earnings activities are: (Points : 2)AssetsRevenuesLiabilitiesStockholder's EquityExpenses5.An asset created by prepayment of an expense is: (Points : 2)Recorded as a debit to an unearned revenue accountRecorded as a debit to a prepaid expense accountRecorded as a credit to an unearned revenueaccountRecorded as a credit to a prepaid expense accountNot recorded in the accounting records until the earnings process is complete6.Unearned revenues are: (Points : 2)Revenues that have been earned and received in cash

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Revenues that have been earned but not yet collected in cashLiabilities created when a customer pays in advance for products or services before the revenueis earnedRecorded as an asset in the accounting records7.The debt ratio is used: (Points : 2)To measure the amount of equity relative to the expensesTo reflect the risk associated with a company's debtsOnly by banks when a business applies for a loanTo determine how much debt a firm should pay off8.The principle that (1) requires revenue to be recognized at the time it is earned, (2) allows theinflow of assets associated with revenue to be in a form other than cash and (3) measures theamount of revenue as the cash plus the cash equivalent value of any non-cash assets receivedfrom customers in exchange for goods or services is called the: (Points : 2)Going-concern principleCost principleRevenue recognition principleObjectivity principleBusiness entity principle9.An example of an operating activity is: (Points : 2)Paying wagesPurchasing office equipmentBorrowing money from a bankSelling stockPaying off a loan10.Which of the following statements best describes the relationship of U.S. GAAP and IFRS?(Points : 2)They are identicalThey are entirely different conceptual frameworksThey are similar but notidenticalNeither has anything to do with accountingThey both relate only to publicly traded companies11.The financial statement that shows: beginning and ending retained earnings balances and theeffects of net income (loss) and a dividend for the period is the: (Points : 2)Statement of financial positionStatement of cash flowsBalance sheet

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Income statementStatement of retained earnings12.A credit is used to record: (Points : 2)An increase in an expense accountAn increase in an asset accountAn increase in an unearned revenue accountA decrease in a revenue accountA decrease to retained earnings13.The primary objective of financial accounting is: (Points : 2)To serve the decision-making needs of internal usersTo provide financial statements to help external users analyze and interpret an organization'sactivitiesTo monitor and control company activitiesTo provide information on both the costs and benefits of managing products and servicesTo know what, when and how much to produce14.To include the personal assets and transactions of a business's owner in the records andreports of the business would be in conflict with the: (Points : 2)Objectivity principleRealization principleBusiness entity principleGoing-concern principleRevenue recognition principle15.Net Income: (Points : 2)Decreases equityRepresents the amount of assets owners put into a businessEquals assets minus liabilitiesIs the excess of revenues over expensesRepresents the owners' claims against assets16.A post-closing trial balance includes: (Points : 2)All ledger accounts with balances, none of which can be temporary accountsAll ledger accounts with balances, none of which can be permanent accountsAll ledger accounts with balances, which include some temporary and some permanent accountsOnly revenue and expense accountsOnly asset accounts

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