GAAP refer to guidelines for accounting information in the United States. The acronym
GAAP in this statement refers to ________.
A) Globally Accepted and Accurate Policies
B) Global Accommodation Accounting Principles
C) Generally Accredited Accounting Policies
D) Generally Accepted Accounting Principles
Corel Sales sold its old office furniture for $6,500. The original cost was $15,000, and
at the time of sale, accumulated depreciation was $14,000. What is the effect of this
transaction?
A) gain of $6,500
B) gain of $5,500
C) loss of $5,500
D) loss of $6,500
When preparing the worksheet for a merchandising business using the perpetual
inventory system, which of the following statements is incorrect?
A) The merchandiser’s worksheet carries the account Cost of Goods Sold.
B) The main new account is the Merchandise Inventory account.
C) The worksheet procedures are not similar to the worksheet procedures for a service
company.
D) The Merchandise Inventory account must be adjusted based on a physical count due
to inventory shrinkage.
Which of the following is the typical order of the sections on a statement of cash flows?
A) operating, financing, investing
B) financing, investing, operating
C) investing, operating, financing
D) operating, investing, financing
David, an employee of Cecil, Inc., has gross salary for March of $5,900. The entire
amount is under the OASDI limit of $117,000, and thus subject to FICA. He is also
subject to federal income tax at a rate of 30%. His year-to-date pay has already
exceeded the $7,000 cap for FUTA and SUTA. The journal entry to record the
employer’s payroll tax expense includes a credit to FICA-OASDI Taxes Payable for
$365.80. (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.)
Cash received from the issuance of notes payable is a(n) ________ activity on the
statement of cash flows.
A) non-cash investing and financing
B) financing
C) operating
D) investing
Which of the following inventory costing methods yields the lowest cost of goods sold
during a period of rising inventory costs?
A) specific identification
B) weighted-average
C) last-in, first-out
D) first-in, first-out
Which of the following is a liability account?
A) Accounts Payable
B) Prepaid Expense
C) Salaries Expense
D) Service Revenue
Trading investments are categorized on the balance sheet as ________.
A) fixed assets
B) current assets
C) intangible assets
D) short-term liabilities
Which of the following inventory costing methods results in the highest value of ending
inventory during a period of rising inventory costs?
A) specific identification
B) weighted-average
C) last-in, first-out
D) first-in, first-out
A business makes a cash payment to a supplier on account for office supplies that were
purchased earlier. Which of the following accounts is credited?
A) Cash
B) Accounts Payable
C) Office Supplies
D) Utilities Expense
Which of the following is a benefit provided by internal control?
A) It ensures timely collection of accounts receivables.
B) It ensures that collusion will never happen.
C) It guarantees that a business makes profit.
D) It promotes operational efficiency.
There are three main ways to analyze financial statements. Which of the following does
not represent one of these ways of analyzing financial statements?
A) horizontal analysis
B) ratio analysis
C) financial statement analysis
D) vertical analysis