acc 200 exam

Which of the following accounts would be classified as an asset

• Sales Revenue
  

• B. Accounts Receivable
  

• 
  Interest Payable
  

• Common Stock

Which of the following statements related to the accounting cycle is false?

• The adjusted trial balance includes adjusting entries for the period.
  

• The general journal is only used for the accrual basis of accounting.
  

• Posting is the process of transferring transactions from the general journal to the general ledger.
  

• The accounting equation must always be in balance throughout the accounting cycle

Which of the following statements related to financial accounting is false?

• Expenses should be recorded in the same period as the revenue they helped generate in the accrual basis of
  accounting.
  

• The objective of financial accounting is to provide information that is useful to users for decision making about capital
  allocation to the entity.
  

• The fundamental accounting equation is assets equals liabilities plus equity.
  

• The primary users of financial accounting information are internal users such as managers and company officers

Which of the following transactions is an example of an accrual?

• Incurring an expense related to income taxes which will be paid the following year.
  

• Receiving cash in advance from customers for concert tickets. The concert will be performed in two months.
  

• Purchasing a warehouse building to store inventory.

• Prepaying for insurance and recording insurance expense at the end of the period

Which of the following accounts is considered a temporary account?

• Sales Revenue
  

• Common Stock
  

• Inventory
  

• Notes Payable

Which of the following related to the financial statements is false?

• Adjusting entries must be recorded before the financial statements are prepared.
  

• The Retained Earnings Statement includes net income for the period and any dividends paid.
  

• The Balance Sheet lists assets, liabilities, equity, and expenses incurred throughout the period.
  

• The Statement of Cash Flows summarizes cash outflows and cash inflows during the period

A company receives an advertising bill and pays it with cash immediately. As a result of this transaction, choose the option that best represents the net effect on the financial statements

• Total equity increases
  

• Total equity decreases

• Total assets increase

• Total liabilities decrease

Which of the following statements regarding inventory systems is false?

• Cost of goods sold is calculated at the end of the period only in a perpetual system.
  

• A periodic inventory system is less costly than a perpetual inventory system.
  

• A perpetual system keeps track of detailed purchases and sales.
  

• Accounting records are continually updated in a perpetual inventory system

When accounting for bad debt

• An allowance method requires an estimate of uncollectible accounts receivable.
  

• Companies must use the direct write-off method since it complies with GAAP.
  

• The percentage of receivables method analyzes length of time the account has been outstanding.
  

• A liability is created due to the risk of uncollectability

Assume a company issued $600,000 of 3%, 6-year bonds with interest paid annually. The bonds were sold for $577,000 in the market. Which of the following is true regarding these bonds?

• The company received $577,000 on the date of issuance.
  

• The market rate was less than the stated rate.
  

• The face value of the bonds is $577,000.
  

• The bond was issued at a premium