T/F users of financial accounting info are external users of accounting in like stock investors, debt holders, and regulators - Answer-True
T/F IASB is the independent standard setter for the financial accounting of US public companies. - Answer-False
T/F Accounts Rec, equipment, salary payab...
ACCT 701 LSUS Exam Questions with
Latest Update
T/F users of financial accounting info are external users of accounting in like stock
investors, debt holders, and regulators - Answer-True
T/F IASB is the independent standard setter for the financial accounting of US public
companies. - Answer-False
T/F Accounts Rec, equipment, salary payable, and interest expense are all balance
sheet items. - Answer-False
T/F Cash received from customers results from business operating activities and
therefore classified as a part of operating cash flow. - Answer-True
Acct can be classified in the following categories EXCEPT
a. managerial acct
b. financial acct
c. tax acct
d. decision acct - Answer-d. decision acct
the basic accounting equation does not include
a. liabilities
b. stockholders equity
c. assets
d. net income - Answer-d. net income
what statement provides info about the company's debt? - Answer-the balance sheet
Accounting conservatism is... - Answer-a choice that recognizes/records expenses and
liabilities as soon as possible but recognizes revenue and assets when they are
assured of being received
T/F A company borrows $9,000 form a bank. A debit to notes payable is recorded when
signing a loan agreement with a bank/lending institution. - Answer-False
What account is never closed? - Answer-retained earnings
which accounts are closed at the end of a fiscal period - Answer-temporary accounts
closing entries for a corporation are made from info in a work sheet's... - Answer-trial
balance columns
, The Midlothian Trash Co of Richmond, Virginia charges customers $100 per month to
pick up trash for 1 month. Money is due on the first day of each month. By the beg of
the current month, the company has received $49,000. If financial statements are made
immediately what reporting is appropriate for the company? - Answer-Assets increase
and liabilities increase.
(The co receives cash so reported assets are higher. But the earning process at the 1st
day of the month is not substantially complete so no revenue can be recognized yet.
Instead, an unearned revenue is recorded that increases the liabilities. The company
owes a service to the customers or the money back)
Abraham Co rents a building for $4,000 per month with payment being made on the
10th day following that month. The acct system is organized so the expense and liability
are recorded throughout the month. In that way the records are kept up to date.
However, when the appropriate payment was made for Nov on Dec 10 of the current
year, the accountant increased the rent expense and decreased cash. Which is true in
connection with this recording?
a. net income understated by $4,000
b. liabilities understated by $4,000
c. reported expenses understated by $4,000
d. all balances stated properly - Answer-a. net income understated by $4,000.
Each of the following events took place this week in connection with the operations of
the Hammond Corp. Which does not qualify as a transaction?
a. truck bought for $39,000 by signing a note payable
b. employee is hired who will be paid $1,000 per month
c. inventory is bought on account for $2,000 with payment to be made next month
d. owner invests $3,000 cash in the business to receive capital stock - Answer-b.
employee hired to be paid $1,000 per month.
what is a transaction - Answer-any event that has a financial impact on the organization
a company owes employees $7,300 at end of Year 1, which it pays on Jan 8 Year 2.
This balance wasn't accrued by the company’s acct system in year 1 nor was it
recorded as an adjusting entry on dec 31 year one. Which of the following is not true for
the Year 1 financial statements?
a. reported total liabilities are too low by $7,300
b. reported total assets are too high by $7,300
c. reported expenses are too low by $7,300
d. reported net income is to high by $7,300 - Answer-b. reported total assets are too
high by $7,300
Neither expense nor payable was recorded in year 1 and those reported balances are
too low. Bc the expense was too low, reported net income will be overstated by $7,300.
This accrual does not impact assets until paid in year 2. Therefore the year 1 asset
balance is properly stated
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