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Financial Control of the Organization.d

Financial Control of the Organization.d — вариант 9

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96 вопросов Вариант 9 Доступ 7 дней
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Вопросы и варианты

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Вопрос 1

The two types of accounting are:

  1. profit and nonprofit.
  2. financial and managerial.
  3. internal and external.
  4. bookkeeping and decision-oriented.
Вопрос 2

What type of accounting provides information for decision makers outside the entity?

  1. Bookkeeping
  2. Managerial accounting.
  3. Internal auditing.
  4. Financial accounting.
Вопрос 3

Who ultimately controls a corporation?

  1. Board of Directors
  2. The Chief Executive Officer (CEO)
  3. The shareholders
  4. The President
Вопрос 4

Financial statements are:

  1. standard documents issued by outside consultants who are hired to analyze key operations of the business in financial terms.
  2. the business documents that companies use to report the results of their financial activities to various user groups.
  3. reports created by management that states it is responsible for the acts of the corporation.
  4. the mechanical part of accounting.
Вопрос 5

Characteristics of a sole proprietor include:

  1. multiple owners.
  2. limited personal liability for all business debts.
  3. a distinct entity, separate from its owner for accounting purposes.
  4. formation under state law.
Вопрос 6

A partnership:

  1. is a taxpaying entity.
  2. is not a distinct entity, separate from its owners for accounting purposes.
  3. has mutual agency.
  4. has limited liability for the partners.
Вопрос 7

A limited-liability partnership is made up of:

  1. partners.
  2. sole proprietors.
  3. members.
  4. shareholders.
Вопрос 8

Advantages of a corporation include:

  1. a single owner.
  2. the double taxation of distributed profits.
  3. limited liability of the shareholders.
  4. mutual agency.
Вопрос 9

All of the following are forms of business organizations EXCEPT for the:

  1. proprietorship.
  2. limited liability partnership.
  3. limited proprietorship.
  4. corporation.
Вопрос 10

An entity that is organized according to state legislation and in which ownership units are called shares is a:

  1. proprietorship.
  2. corporation.
  3. partnership.
  4. limited liability partnership.
Вопрос 11

The International Accounting Standards Board is responsible for establishing:

  1. the code of professional conduct for accountants.
  2. the International Accounting Standards.
  3. generally accepted accounting principles.
  4. the International Financial Reporting Standards.
Вопрос 12

The acronym GAAP stands for:

  1. generally acceptable authorized pronouncements.
  2. government authorized accountant principles.
  3. generally accepted accounting principles.
  4. government audited accounting pronouncements.
Вопрос 13

Which of the following is NOT a business transaction?

  1. The company sells goods for cash.
  2. The company buys land for cash.
  3. The company hires a new president.
  4. The company pays a dividend to its shareholders.
Вопрос 14

A record of all the changes in a particular asset, liability, or shareholders’ equity during a period is called a (n):

  1. transaction
  2. trial balance.
  3. journal
  4. account.
Вопрос 15

Which of the following is NOT an asset account?

  1. Accounts Receivable
  2. Prepaid Rent
  3. Share Capital
  4. All of these are asset accounts.
Вопрос 16

Any event that has a financial impact on the business and can be measured reliably is a(n):

  1. income statement.
  2. transaction.
  3. asset
  4. journal
Вопрос 17

The rules for recording accounting transactions do NOT include which of the following?

  1. Every transaction’s net amount on the left side of the equation must equal the net amount on the right side.
  2. Both sides of the accounting equation must be affected.
  3. Every transaction affects the financial statements of the business.
  4. Total assets must always equal total liabilities plus total equity.
Вопрос 18

A corporation’s paid-in capital includes:

  1. revenues and expenses.
  2. assets and liabilities.
  3. capital from shareholders.
  4. net income.
Вопрос 19

Receivables are classified as:

  1. increases in earnings.
  2. decreases in earnings.
  3. liabilities
  4. assets
Вопрос 20

An investor who wished to answer the question, "Can the company sell its products?" should investigate the:

  1. operating activities section of the cash flow statement.
  2. current and projected inventory levels.
  3. sales revenue trends and projected sales.
  4. net income for the current period and projected net income for the next period.
Вопрос 21

Generally, three factors influence business and accounting decisions—

  1. operating, investing, and financing activities.
  2. assets, liabilities, and equity.
  3. economic, legal, and ethical.
  4. revenues, expenses, and dividends.
Вопрос 22

The decision framework for making ethical judgments does NOT consider the following question?

  1. What is the issue?
  2. What are the alternatives?
  3. What alternative maximizes profit?
  4. Who are the stakeholders?
Вопрос 23

Which of the following is NOT an asset?

  1. Inventory
  2. Accounts payable
  3. Accounts receivable
  4. Cash
Вопрос 24

Examples of liabilities include:

  1. accounts payable and accounts receivable.
  2. accounts payable and land.
  3. investments and owners’ equity.
  4. accounts payable and long-term debt.
Вопрос 25

A company makes a $200 sale on account. It later collects the $200 in cash. Under the accrual method of accounting, revenue is recognized:

  1. when the cash is collected.
  2. when the sale is made.
  3. either when the cash is received or the sale is made.
  4. at a time that cannot be determined from the facts.
Вопрос 26

Under accrual accounting, revenue is recorded:

  1. when the cash is collected, regardless of when the services are performed.
  2. when the services are performed, regardless of when the cash is received.
  3. either when the cash is received or the sale is made.
  4. only if the cash is received at the same time the services are performed.
Вопрос 27

An example of a noncash transaction under the accrual method of accounting does NOT include:

  1. depreciation expense.
  2. sales on account.
  3. collecting cash from customers.
  4. accrual of expenses incurred, but not yet paid.
Вопрос 28

If a company makes a journal entry to debit Accounts Receivable and credit the Service Revenue account, it is using:

  1. the cash method of accounting.
  2. the hybrid method of accounting.
  3. the accrual method of accounting.
  4. either the cash or accrual method of accounting.
Вопрос 29

There are two methods used to account for transactions. These methods are:

  1. deferral and prepaid.
  2. accrual and deferral.
  3. cash and deferral.
  4. cash and accrual.
Вопрос 30

Accounts receivable would appear on the:

  1. Balance Sheet with the current liabilities.
  2. Balance Sheet with the current assets.
  3. Income Statement with the revenues.
  4. Statement of Changes in Equity with the net income.
Вопрос 31

Notes payable (due in 60 days) would appear as a:

  1. current liability on the Balance Sheet.
  2. current asset on the Balance Sheet.
  3. non-current asset on the Balance Sheet.
  4. non-current liability on the Balance Sheet.
Вопрос 32

Income taxes owed to the federal government would be classified as a(n):

  1. expense on the Income Statement.
  2. financing activity on the Statement of Cash Flows.
  3. current asset on the Balance Sheet.
  4. current liability on the Balance Sheet.
Вопрос 33

Liabilities are divided into two categories—

  1. current and payable.
  2. current and future.
  3. accounts payable and non-current.
  4. current and non-current.
Вопрос 34

In relation to the cash flow statement, purchases and sales of long-term assets are examples of:

  1. investing activities.
  2. accrual activities.
  3. financing activities.
  4. operating activities.
Вопрос 35

The Statement of Cash Flows is divided into which three categories?

  1. Operating, investing, and financing activities
  2. Planning, executing, and evaluating activities
  3. Increasing, decreasing, and non-cash activities
  4. Developing, producing, and marketing activities
Вопрос 36

What is the proper order for the categories of the statement of cash flows?

  1. Financing activities, investing activities, and operating activities
  2. Operating activities, investing activities, and financing activities
  3. Operating activities, financing activities, and investing activities
  4. Investing activities, financing activities, and operating activities
Вопрос 37

The Management Discussion and Analysis Section of the annual report:

  1. is required by the SEC.
  2. is optional but normally included in the annual report.
  3. is required by the SEC only if the company has suffered from unfavorable trends or there are significant uncertainty concerning liquidity of the company.
  4. is required by the SEC only if they have a qualified audit opinion.
Вопрос 38

The substance of annual report is:

  1. grossly pictures and cover page.
  2. the audited financial statements
  3. the management analysis.
  4. the charts and tables
Вопрос 39

Auditor’s opinion that the consolidated financial statements provide a “true and fair view of the net assets, financial position and results of the Group” is also known as:

  1. qualified opinion.
  2. adverse opinion
  3. unqualified opinion.
  4. fair opinion
Вопрос 40

An unqualified opinion:

  1. is one made with reservation.
  2. is one made without reservation
  3. is made when auditors are not fully qualified to audit the financial statements.
  4. is given when there is a conflict of interest.
Вопрос 41

A qualified opinion is given when:

  1. as a whole, the financial statements are fairly presented, except for disagreement on how to treat a particular transaction
  2. disagreement on how to treat a few transactions
  3. the auditor is fully satisfied with the preparation of the financial statements.
  4. the financial statements were objective and transparent
Вопрос 42

Accountants follow guidelines for professional measurement and disclosure of financial information called:

  1. IASB.
  2. IFRS
  3. FASB
  4. SEC
Вопрос 43

International financial reporting standards are set by the:

  1. IASB
  2. GAAP
  3. FASB
  4. SEC
Вопрос 44

The IASB:

  1. is working towards a convergence of standards with the FASB.
  2. will not accept FASB rules.
  3. does not want US companies to adopt IFRS standards.
  4. feels that the global use of IFRS will significantly increase costs of doing global business.
Вопрос 45

The heading John Smith, Capital, indicates the owners’ equity of a:

  1. proprietorship
  2. corporation
  3. not-for-profit.
  4. regulatory body.
Вопрос 46

To be useful, accounting information must have the fundamental qualitative characteristics of:

  1. understandability, timeliness, reliability and relevance.
  2. timeliness, comparability, reliability and relevance.
  3. materiality, understandability, timeliness and comparability.
  4. understandability, comparability, reliability and relevance.
Вопрос 47

All of the following are characteristics of useful accounting information EXCEPT:

  1. comparability
  2. relevance
  3. informative
  4. reliability
Вопрос 48

When information is important enough to the informed user, so that, if it was omitted or erroneous, it would make a difference in the user’s decision, it is:

  1. comparable
  2. material
  3. timely
  4. understandable
Вопрос 49

The type of fraud committed by company managers who make false and misleading entries in the books, making the financial results of the company appear better than they actually are, is called:

  1. misappropriation of assets.
  2. fraudulent financial reporting.
  3. embezzlement
  4. collusion
Вопрос 50

The type of fraud committed by employees of an entity who steal money from the company and cover it up through erroneous entries in the books is called:

  1. misappropriation of assets.
  2. fraudulent financial reporting.
  3. embezzlement.
  4. collusion
Вопрос 51

The two most common types of fraud impacting financial statements are:

  1. fraudulent financial reporting and e-commerce fraud.
  2. misappropriation of assets and embezzlement.
  3. fraudulent financial reporting and misappropriation of assets.
  4. cooking the books and fraudulent financial reporting.
Вопрос 52

All of the following are purposes of internal control EXCEPT:

  1. to promote operational inefficiency.
  2. to encourage adherence to company policies.
  3. to ensure accurate and reliable accounts records.
  4. to safeguard assets.
Вопрос 53

The company’s ___________ have/has the primary responsibility for establishing and maintaining a company’s system of internal control.

  1. external auditors
  2. internal auditors
  3. top management
  4. shareholders
Вопрос 54

Which characteristic will NOT be found in an effective system of internal control?

  1. Competent, reliable, and ethical personnel
  2. A combination of duties
  3. A separation of duties
  4. Documents and records
Вопрос 55

Which of the following is a limitation of internal control?

  1. Operational efficiency
  2. Employee collusion
  3. Accurate and reliable accounting records
  4. Safeguarding company assets
Вопрос 56

Factors that would lead an employee to commit a lapping scheme include:

  1. a proper separation of duties.
  2. not allowing the bookkeeper to access to cash.
  3. appropriately monitoring the activities of employees who handle cash.
  4. allowing employees to not take time off for earned vacations.
Вопрос 57

A bank statement included a NSF check from customer Kim Fields for $2,100. The journal entry to record this reconciling item should:

  1. debit NSF and credit Cash for $2,100.
  2. debit Cash and credit Accounts Receivable for $2,100.
  3. debit Accounts Receivable and credit Cash for $2,100.
  4. debit Cash and credit NSF for $2,100.
Вопрос 58

If a bank statement included a bank collection and related interest revenue, the journal entry to record this reconciling item should include a:

  1. debit to Cash.
  2. credit to Cash.
  3. debit to Note Receivable.
  4. debit to Note Payable.
Вопрос 59

If a bank reconciliation included deposits in transit amounting to $3,700, the journal entry to record this reconciling item:

  1. should debit Deposit in Transit and credit Cash for $3,700.
  2. should debit Cash and credit Deposit in Transit for $3,700.
  3. should debit Accounts Receivable and credit Cash for $3,700.
  4. is not required.
Вопрос 60

If a bank statement includes an EFT payment of $945 for insurance, the journal entry to record this reconciling item should include a:

  1. debit to Cash for $945.
  2. debit to Accounts Payable for $945.
  3. credit to Cash for $945.
  4. credit to Prepaid Insurance for $945.
Вопрос 61

The largest expense on the income statement for most merchandising companies is:

  1. administrative expenses.
  2. selling expenses.
  3. cost of goods sold.
  4. other expenses.
Вопрос 62

In a merchandising company’s income statement, which of the following would NOT be included in the Cost of Goods Sold calculation?

  1. Shipping costs from the manufacturer to the merchandiser
  2. Sales commissions
  3. Returns of inventory purchases
  4. Sales taxes on inventory purchases, as shown on the invoices
Вопрос 63

In a merchandising business, gross profit is equal to sales revenue minus:

  1. cost of goods sold, operating expenses and prepaid expenses combined.
  2. cost of goods sold and operating expenses combined.
  3. cost of goods sold only.
  4. cost of goods sold and sales commissions combined.
Вопрос 64

Two accounts that would appear on the financial statements of a merchandising company that are not needed by a service company are:

  1. cost of goods sold and depreciation.
  2. cost of goods sold and net income.
  3. cost of goods sold and inventory.
  4. inventory and depreciation.
Вопрос 65

Sales revenue is based on the _________ price of the inventory, while cost of goods sold is based on the __________ of the inventory.

  1. cost, sales
  2. cost, cost
  3. sales, sales
  4. sales, cost
Вопрос 66

The inventory system that uses computer software to keep a running record of inventory on hand is the:

  1. cost of goods sold inventory system.
  2. periodic inventory system.
  3. perpetual inventory system.
  4. hybrid inventory system.
Вопрос 67

A perpetual inventory system offers which of the following advantages?

  1. Inventory balances have to be counted to be accurate.
  2. This system is used for inexpensive goods.
  3. This system is more expensive than a periodic system.
  4. This system helps to determine if there is a sufficient supply of inventory on hand to fill customer orders, just by reviewing the inventory records.
Вопрос 68

Under a perpetual inventory system, when a sale is made:

  1. the company makes a journal entry to record the sale only.
  2. the company makes a journal entry to record only the cost of goods sold.
  3. the company makes a journal entry to record the sale and the cost of goods sold.
  4. no journal entry needs to be made.
Вопрос 69

How do purchase returns and allowances and purchase discounts affect net purchases?

  1. Both are added to purchases.
  2. Both are subtracted from purchases.
  3. Purchase returns and allowances are added to purchases; purchase discounts are subtracted from purchases.
  4. Purchase returns and allowances are subtracted from purchases; purchase discounts are added to purchases.
Вопрос 70

What is the formula used to calculate net purchases?

  1. Purchases less Purchase Returns and Allowances plus Purchase Discounts less freight-in
  2. Purchases plus Purchase Returns and Allowances less Purchase Discounts plus freight-in
  3. Purchases less Purchase Returns and Allowances less Purchase Discounts plus freight-in
  4. Beginning Inventory less Purchases
Вопрос 71

Unlike the periodic inventory system, the perpetual inventory system:

  1. does not require a physical count of the ending inventory.
  2. includes only the inventory purchased for cash.
  3. provides a continuous record of inventory on hand.
  4. is not required by GAAP.
Вопрос 72

Accounting information is subject to the constraints of:

  1. balance between qualitative characteristics, comparability and consistency.
  2. balance between qualitative characteristics, reliability and relevance.
  3. timeliness, benefits versus cost and balance between qualitative characteristics.
  4. timeliness, benefit versus cost, relevance and reliability.
Вопрос 73

An example of a long-term tangible asset would be:

  1. office supplies.
  2. furniture
  3. investment in LQH company.
  4. patents
Вопрос 74

Long-lived tangible assets that are used in the operation of the business are called:

  1. intangible assets.
  2. natural resources.
  3. PPE
  4. goodwill
Вопрос 75

The only PPE that does not depreciate is:

  1. office supplies.
  2. furniture
  3. land
  4. patents
Вопрос 76

All amounts paid to acquire a PPE and to get it ready for its intended use are referred to as:

  1. set up costs.
  2. Expenditures
  3. maintenance expense.
  4. the cost of an asset.
Вопрос 77

Costs that would be included with the purchase of a PPE are:

  1. the sum of all of the costs incurred to bring the asset to its intended use.
  2. only costs that exceed a certain amount.
  3. only the purchase price.
  4. only the sales price.
Вопрос 78

Which of the following should be included in the cost of land?

  1. Construction cost of a parking lot
  2. Landscaping
  3. Real estate brokerage commission
  4. Lighting
Вопрос 79

Which of the following is NOT an intangible asset?

  1. Copyright
  2. Goodwill
  3. Patent
  4. Mineral rights
Вопрос 80

The cost of installing shrubbery should be recorded as:

  1. land
  2. land improvements.
  3. land maintenance expense.
  4. land improvement expense.
Вопрос 81

Although located on the land, they are subject to decay and their cost is depreciated. This is the definition of:

  1. land improvement.
  2. plant and equipment.
  3. a building.
  4. land
Вопрос 82

The cost of assets acquired in a lump-sum purchase must be allocated using which method?

  1. Book-value method
  2. Cost method
  3. Per capita method
  4. Relative-sales-value-method
Вопрос 83

The major types of transactions that affect retained earnings are:

  1. paid-in capital and ordinary shares.
  2. assets and liabilities.
  3. revenues, expenses, and dividends.
  4. revenues and liabilities.
Вопрос 84

Payables are classified as:

  1. increases in earnings.
  2. decreases in earnings.
  3. liabilities
  4. assets
Вопрос 85

High Times Corporation owns 300 shares of Low Tide Company’s ordinary shares. Low Tide has 1,000,000 ordinary shares outstanding. High Times Corporation is the:

  1. investor
  2. investee
  3. parent company.
  4. controlling company.
Вопрос 86

High Times Corporation owns 300 shares of Low Tide Company’s ordinary shares. Low Tide has 1,000,000 ordinary shares outstanding. Low Tide Company is the:

  1. investor
  2. investee
  3. parent company.
  4. controlling company.
Вопрос 87

How are available-for-sale investments in shares reported on the balance sheet?

  1. As long-term assets
  2. As current assets
  3. As either current assets or long-term assets, depending on when the investment is expected to be sold
  4. As both long-term assets and shareholders' equity
Вопрос 88

The Unrealized Gains and Losses on Available-for-sale Securities account appear in which financial statement?

  1. The balance sheet in the assets section
  2. The balance sheet as part of shareholders' equity
  3. The income statement as an operating expense
  4. The balance sheet in the liabilities section
Вопрос 89

With regard to available-for-sale securities, which of the following is used to compute net income?

  1. Realized gains
  2. Unrealized gains
  3. Both unrealized gains and realized gains
  4. Neither realized gains nor unrealized gains
Вопрос 90

The journal entry to record the receipt of a share dividend arising from an available-for-sale investment held by a company includes:

  1. a debit to Unrealized Gain on Investment and a credit to Dividend Revenue.
  2. a debit to Cash and a credit to Dividend Revenue.
  3. a debit to Cash and a credit to Unrealized Gain on Investments.
  4. no journal entry. Only a memorandum entry is required.
Вопрос 91

The journal entry to record the receipt of a cash dividend arising from an available-for-sale investment held by a company includes:

  1. a debit to Unrealized Gain on Investment and a credit to Dividend Revenue.
  2. a debit to Cash and a credit to Dividend Revenue.
  3. a debit to Cash and a credit to Unrealized Gain on Investments.
  4. no journal entry. Only a memorandum entry is required.
Вопрос 92

The receipt of a cash dividend:

  1. has no effect on assets or total equity.
  2. increases assets and increases paid-in-capital.
  3. increases assets and decreases shareholders' equity.
  4. increases assets and increases retained earnings.
Вопрос 93

The receipt of a share dividend:

  1. has no effect on assets or total equity.
  2. increases assets and increases paid-in-capital.
  3. increases assets and decreases shareholders' equity.
  4. increases assets and increases retained earnings.
Вопрос 94

The gain or loss on the sale of an investment classified as "available-for-sale" is measured by comparing the amount received from the sale of investment with the:

  1. market value of the investment.
  2. lower-of-cost-or-market value of the investment.
  3. cost of the investment.
  4. amortized cost of the investment.
Вопрос 95

An investment in ordinary shares acquired during the year at a cost of $20,000 has a year-end market value of $21,250. The year-end adjusting entry requires a:

  1. debit to Allowance to Adjust Investments to Market for $1,250.
  2. debit to Long-Term Investments for $1,250.
  3. debit to Unrealized Gain on Investment for $1,250.
  4. credit to Allowance to Adjust investment to Market for $1,250.
Вопрос 96

The amount that shareholders have invested in a corporation is called:

  1. retained earnings.
  2. investment
  3. revenue
  4. paid-in capital.