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Financial Accounting
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Financial Accounting
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25 Questions

1. Of the following choices - which of the following is typically located lowest on the income statement?
2. Which of the following lines should be included on the income statement of a company with a loss from an available for sale security?
3. Using a perpetual inventory system - the entry to record the return from a customer of merchandise sold on account includes a
4. Which of the following would appear as an extraordinary item on the income statement?
5. The business entity concept means that
6. If the straight-line method of amortization of bond premium or discount is used - which of the following statements is true?
7. A building with an appraisal value of $137000 is made available at an offer price of $142000. The purchaser acquires the property for $30000 in cash - a 90-day note payable for $40000 - and a mortgage amounting to $60000. The cost basis recorded in the buyer’s accounting records to recognize this purchase is
8. How is treasury stock shown on the balance sheet?
9. The amount of deposits in transit is included on the bank reconciliation as a(n)
10. Suppose that a company estimates that 10% of its sales will not be collectible. If it sells $1000000 worth of goods - which of the following journal entries reflects the company’s estimate?
11. The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time - such as a month or year - is called a(n)
12. According to the principle of periodicity - which of the following is true?
13. Fred and Ethel share income equally. During the current year the partnership net income was $40000. Fred made withdrawals of $12000 and Ethel made withdrawals of $17000. At the beginning of the year - the capital account balances were: Fred capital - $42000; Ethel capital - $58000. Fred’s capital account balance at the end of the year is
14. Which of the statements below indicates that a company earned a net income for the period?
15. Land costing $47000 was sold for $78000 cash. The gain on the sale was reported on the income statement as other income. On the statement of cash flows - what amount should be reported as an investing activity from the sale of land?
16. The journal entry a company uses to record the estimated accrued product warranty liability is
17. How does the purchase of supplies on account affect the accounting equation?
18. Suppose that a company purchases a patent with a useful life of 10 years for $100000. If it chooses to account for the cost of the patent on a straight-line basis - which of the following annual expenses should it record?
19. A person authorized to write checks drawn on a checking account at a bank must sign and have on file with the bank a
20. The inventory data for an item for November are Using the perpetual system - costing by the last-in - first-out method - what is the cost of the merchandise inventory of 30 units on November 30?
21. A fixed asset with a cost of $40000 and accumulated depreciation of $36 - 500 is traded for a similar asset priced at $60000. Assuming a trade-in allowance of $3000 - the recognized loss on the trade is
22. Limited liability is generally seen to be an advantage associated with corporations. What does limited liability mean?
23. Office supplies purchased by J’s Appliance Repair on account were returned. Which of the following entries for J’s Appliance Repair records this transaction?
24. Based on the following data - what is the amount of quick assets?
25. Which of the following should a company typically do before updating the appropriate ledger accounts?

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