Reference no: EM132670193
Questions -
Q1- A bookkeeper debited an asset account on January 1 for $ 3,000 for 3 months of supplies. As of January 31, assuming supplies are used evenly over the 3 months, what is the entry that needs to be made to properly reflect supplies used in January?
- Credit to Supplies $ 1,000 and credit to expenses of supplies $1,000.
- Credit another liability account for $1,500.
- Debit to Supply expenses $ 2,000 and Credit to supplies $2,000
- Debit to Supplies $ 1,000 and Credit to expenses for supplies $1,000
- Debit to Supplies $ 2,000 and credit to expenses for supplies $2,000
Q2- A law firm billed a client $ 1,800 for work performed in the current month. Which of the following general journal entries will the company make to record this transaction?
- Cash debit, $ 1,800; Credit to Income for unearned legal fees, $1,800.
- Debit Accounts receivable, $ 1,800; Credit to Income for legal fees, $1,800.
- Cash debit, $ 1,800; Credit to Accounts Receivable, $1,800.
- Debit to Income for debit legal fees $ 1,800; Credit to Accounts Receivable, $1,800.
- Debit to Accounts Receivable, $ 1,800; Credit to Income for unearned legal fees, $1,800.
Q3 - The principle of income recognition:
- Prescribe that accounting information is based on actual cost.
- It prescribes that a company record the expenses it incurred to generate the reported income.
- It prescribes that a company report the details behind the financial statements that would affect users' decisions.
- Provides guidance on when a company should recognize revenue.
- It means that the accounting information reflects a presumption that the business will continue to operate rather than be closed or sold.
Q4 - A roofing company charges fees when the works are completed. Work for a client, whose work was offered for $ 3,000, was completed on December 31, but the client has not yet been billed. An adjusting entry is made for this transaction at the end of the year, what accounting principle / concept does this adjusting entry require?
- Parity
- suitable internal controls
- required billing
- full and fair disclosure
- No adjustment is required.
Q5 - The expense of the rent appears in what financial state?
- Statement of Cash Flows and Balance Sheet
- Balance sheet.
- State of Capital of the Owners
- Income statement and balance sheet.
- Statement of income
Q6 - Cash, inventories and accounts payable are reported in the:
- General balance within current assets $792,000.
- Balance sheet within fixed assets
- Income Statement as part of Net Income
- Income Statement after Sales and Cost of Products Sold
Q7 - A Balance Sheet that presents assets before liabilities and Capital is called:
- Classified Balance Sheet
- Balance Sheet in Account Format
- Reported Balance Sheet
- Unadjusted Balance Sheet
- Unclassified Balance Sheet
Q8 - The usual order for the asset subgroups of a classified balance sheet is:
- Intangible assets, current assets, long-term investments, production assets.
- Long-term investments, current assets, production assets, intangible assets.
- Current assets, long-term investments, production assets, intangible assets.
- Production assets, intangible assets, long-term investments, current assets.
- Current assets, prepaid expenses, long-term investments, intangible assets.
Q9 - Fraud is not only unethical behavior, but also illegal. Which of the following describes the component of the fraud triangle that refers to rationalization?
- Be able to commit fraud when there is a low risk of being discovered
- Do not view committing fraud as a criminal act
- Have initiative and intention to commit fraud
- Note that there are no internal controls established within the company
Q10 - Which of the following statements is one of the results of the implementation of the Sarbanes-Oxley Act?
- The administration must issue a report indicating that the established internal controls are effective.
- Auditors should prepare a report that indicates that internal controls are effective
- Auditors are not responsible for reporting on the effectiveness of internal controls.
- Management is not responsible for reporting on internal controls