Accountant

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Total Timer

Q1 Timer

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What effect does a contra-asset account have on a balance sheet?

A contra asset is not an accounting term.

A contra asset has a credit balance and, therefore, a negative effect on total assets.

A contra asset with a positive balance will increase overall liabilities.

A contra asset has a debit balance and, therefore, a positive effect on total assets.

Q2 Timer

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On March 15, a business receives an invoice from the power company for utilities used in February. The retailer pays the invoice on April 1. The business uses accrual-based accounting. Which month should the business recognize the expense?

April

No record required

March

February

Q3 Timer

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Which answer best describes accruals and deferrals?

Accruals are past cash receipts and payments, while deferrals are expected future cash receipts and payments.

Both accruals and deferrals are not expected past cash receipts and payments.

Both accruals and deferrals are both expected in future cash receipts and payments.

Accruals are expected future cash receipts and payments, while deferrals are past cash receipts and payments.

Q4 Timer

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How are the three financial statements (income statement, balance sheet, and cash flow statement) linked?

The gross profit goes to retained earnings, and the shareholder equity total is added to the cash flow statement.

The net income goes to retained earnings, but the cash flow remains independent.

The net income goes to the retained earnings and to the cash flow statement

Only the assets are reflected in the cash flow statement, and the net income expenses correlate with the liabilities.

Q5 Timer

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What would be deducted from the balance per book when doing a bank reconciliation?

Outstanding checks

Electronic fund transfers/payments

Bank service fees

Deposits in transit

Q6 Timer

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A firm has $1,000 in debt and $3,000 in assets. What is the firm's debt-to-equity ratio?

0.5

3

0.33

2

Q7 Timer

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What trait distinguishes auditors from accountants?

The auditor has expertise in the gathering and interpretation of audit evidence.

The auditor has extensive education beyond what is required for an accountant.

The auditor can interpret accounting principles applicable to the country in which the client operates.

The auditor can adapt to a rapidly changing profession.

Q8 Timer

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What is the difference between the cost of an asset and the accumulated depreciation for that asset?

Depreciation value

Depreciation expense

Prepaid asset

Book value

Q9 Timer

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A company budgeted 1,200 washers, but only 1,000 are produced. It costs $10 to produce a widget. What is the materials variance?

2000

20

200

350

Q10 Timer

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A business purchased office equipment by issuing a one-year note payable. The entire amount of the note is due at the end of one year. How do you record this transaction?

Debt asset, credit equity

Debit asset, credit liability

Debt liability, credit asset.

Debit equity, credit asset.

Q11 Timer

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Which section of a financial annual report describes the corporation's accounting methods?

Listing of the stockholders

Management discussion and analysis

An auditor's report

Notes to the financial statements

Q12 Timer

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Which statement about current liabilities is true?

Current liabilities should be included under long-term liabilities.

Current liabilities are obligations owed after a 12-month period.

Current liabilities are obligations owed over 5 years.

Current liabilities are obligations due within a year.

Q13 Timer

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How do variable costs and fixed costs act within the relevant range?

Fixed costs per unit remain constant and variable costs per unit vary.

Variable costs per unit remain constant, and fixed costs per unit vary.

Both total variable costs and total fixed costs vary.

Both total variable costs and total fixed costs remain constant.

Q14 Timer

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When applying a cost-volume-profit analysis (CVP), certain assumptions must be respected. Which answer is not one of these assumptions?

Actual unit variable cost will vary over the production range.

The unit sales price will remain constant.

The cost behavior is expressed as intersecting straight lines.

The unit fixed cost will decrease.

Q15 Timer

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What is a conversion cost the sum of?

Direct materials cost + Manufacturing overhead cost

Direct materials cost + Marketing cost

Direct labor cost + Manufacturing overhead cost

Direct materials cost + Administration cost

Q16 Timer

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What type of cost changes in proportion to a company's production volume?

Fixed cost

Variable cost

Indirect cost

Conversion cost

Q17 Timer

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Permanent accounts are on what financial statement?

Cash flow statement

Balance sheet

Income statement

Shareholder equity statement

Q18 Timer

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The asset-turnover ratio calculation measures?

How efficiently a company uses its assets to generate revenue

How often a company must replace existing assets and equipment

When the company must decide to purchase assets and what investment is required

How much of a company's assets are financed by creditors

Q19 Timer

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Which is the appropriate term for an incurred cost that cannot be changed by any decision?

Previous cost

Variable cost

Sunk cost

Opportunity cost

Q20 Timer

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What cost is easily traceable to a cost object?

Fixed

Variable

Direct

Indirect

Accountant Assessment