Archives: Quiz

The last step of the closing process of a merchandiser is to make the expense accounts equal zero via the Income Summary account. Economic resources and debts of the company are shown on the balance sheet. TRUE Baytown Paper Company […]

The statement of stockholders’ equity has less information than the statement of retained earnings. The Supplies Expense account is a temporary account. TRUE Because companies use special journals, the use of the General Journal is optional. FALSE Explanation: Companies also […]

California Corp. uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet: California Corp. Comparative Balance Sheet December 31, 2018 and 2017 The change in Accrued Liabilities is shown […]

Nevada Sales purchased some equipment for $12,000 by issuing a five-year note payable. This will appear in the non-cash investing and financing activities section of the statement of cash flows. The discount on bonds payable becomes interest expense through a […]

Separate customer accounts receivable are called subsidiary accounts. The difference that arises between the balance on the bank statement and the balance on the company’s books because of a time lag in recording transactions is known as a permanent difference. […]

Urban Installations Company uses the direct method to prepare its statement of cash flows. Urban has reported cost of goods sold of $95,000 on its income statement for 2018. If the balance in the Merchandise Inventory account decreased by $6,000 […]

The United Way Payable account would normally be shown on the balance sheet under current liabilities. A corporation is a separate legal entity that is organized independently of its owners. TRUE When using the allowance method, Allowance for Bad Debts […]

At the end of each day, the accountant proves the cash by comparing the cash in the drawer against the point-of-sale terminal record of cash sales. Estimated residual value can be zero if the company does not expect to receive […]

Special items and earnings per share are reported on the income statement after income from continuing operations. Using the effective-interest amortization method, the calculation for the amount of premium amortization is the difference between the cash paid for interest and […]

For good internal control over cash payments, the company officer approving a payment voucher should be the same as the person who ordered the goods. This ensures that the correct amount of cash is paid. An increase in the current […]

Amortization is the process by which businesses spread the allocation of an intangible asset’s cost to expense over its useful life. Days’ sales in inventory measures how quickly a company can collect its receivables. FALSE For each petty cash payment, […]

The gross profit percentage measures the profitability of each sales dollar above the cost of goods sold. There are three parties to a check: the depositor, the maker, and the bank. FALSE The financial statements under the periodic inventory system […]

When using the effective-interest amortization method, the discount amortization is the excess of the calculated interest expense based on the stated interest rate over the interest payment. A law firm provides legal services for clients who do not pay immediately. […]

Adjusting entries do not update balance sheet accounts. Installment payments for mortgages generally contain both an amount for principal repayment and an amount for interest. TRUE Generally, all transactions are recorded in both a special journal and the general journal. […]

When preparing the statement of cash flows by the indirect method, it is necessary to adjust for non-cash expenses such as depreciation expense. Prepaid Rent is a liability account. FALSE Explanation: Prepaid Rent is an asset account. A corporation’s income […]

Noncumulative preferred stock is in arrears if the dividend has not been paid for the year. The book value of a plant asset is reported on the balance sheet as the cost of the asset minus accumulated depreciation. TRUE Depending […]

A worksheet is an external document that forms a part of the financial statements. Separation of cash-handling and cash-accounting duties is a critical element of internal control over receivables. TRUE All plant assets are depreciated. FALSE Explanation: All plant assets […]

Normally, companies with low gross profit percentages will have low asset turnover. Equity securities, in which the investor lacks the ability to participate in the decisions of the investee company, are initially accounted for at the lower-of-cost-or-market value. FALSE Explanation: […]

Entries in the sales journal are posted to both the accounts receivable subsidiary ledger and the general ledger. As long as an increase and decrease of the same amount is recorded on one side of the accounting equation, the accounting […]

No significant influence equity investments generally involve the ownership of less than 20% of the investee’s voting stock. After posting entries in a sales journal to the general ledger, the Accounts Receivable balance in the general ledger should equal the […]

Contingencies that are reasonably possible are not described in the notes to the financial statements. Any person or business to whom a business owes money is called the business’s creditor. TRUE After a machine is installed and is up and […]

The Office Supplies account is a temporary account. Preferred Stock is included in the long-term assets section of the balance sheet. FALSE Explanation: Preferred Stock is included in the stockholders’ equity section of the balance sheet The current ratio is […]

If treasury stock is resold for more than cost, the difference is debited to the account Paid-In Capital from Treasury Stock Transactions. With the terms FOB shipping point, the freight cost becomes part of the cost of merchandise inventory for […]

Dividends can be paid in the form of cash, stock, or other property. When a business sells a plant asset for book value, a gain or loss should be recorded. FALSE Explanation: When a business sells a plant asset for […]

When the maturity date of a held-to-maturity debt investment is within one year of the balance sheet date, the investment is reported as a current asset. As per the economic entity assumption, an organization and its owners should be seen […]

An alternative to calling the bonds is to purchase any available bonds in the open market at their current market price. An external auditor is responsible for assessing the effectiveness of a company’s internal controls. TRUE The Dividends account is […]

Gain or loss is determined by comparing the cash received and the market value of any other asset received with the historical cost of the asset disposed of. Ratio analysis is used most effectively to measure a company against other […]

The number of times a company collects the average accounts receivable balance in a year is known as the accounts receivable turnover ratio. Ending inventory is calculated by multiplying the number of units on hand by the unit cost. TRUE […]

Arizona Company plans to purchase a property to build its corporate headquarters. An investor is willing to exchange land with a market value of $500,000 for common stock. This transaction would be shown in the financing activities section of the […]

The permanent accounts—assets, liabilities, and stockholders’ equity—are closed to the Common Stock account. When using a periodic inventory system, the Merchandise Inventory account will never be used when recording purchases, purchase discounts, purchase returns, or sales of inventory. TRUE Significant […]

The left side of the accounting equation measures the amount that the business owes to creditors and to the stockholders. To complete the statement of cash flows, the net change in cash and its effects on the beginning cash balance […]

Notes receivable represent a written promise that a party will pay a fixed amount of principal plus interest on a stated maturity date. The balance sheet shows whether or not a business is profitable. FALSE Explanation: The balance sheet provides […]

The amortization of bond premium increases interest expense over the life of the bonds. A computerized system uses software to process transactions. Thus employees are no longer required to manually journalize and post transactions to the accounts. TRUE Short-term notes […]

Which of the following is considered to be the most important step in preparing to respond to negative information on social media? A) Monitor the conversation before responding B) Evaluate negative messages before responding C) Respond quickly and ethically D) […]

How can informative headings in an outline help the collaborative writing process? A) By reducing ambiguity about topics B) By identifying general content areas C) By introducing general topic areas D) By indicating the need for an indirect or direct […]

How does being aware of audience needs influence credibility? A) It indicates a message has been backed up with data B) It shows an ability to create emotional distance C) It demonstrates honesty D) It demonstrates sincerity E) It indicates […]

Which of the following can be used to improve the collaborative writing process when working on conventional websites? A) PDF files B) Wikis C) Content management system D) Virtual communities E) Communities of shared practices Most persuasive messages combine A) […]

Which of the following should be avoided when closing a negative news message? A) Optimism B) Uncertain conclusions C) Final decisions D) Sincerity E) Available alternatives Which of the following is the most fundamental design choice to make when creating […]

Which of the following is one reason the consideration of ethics is especially important when delivering bad news? A) The law requires all communications to be ethical and written with etiquette B) Strong ethical standards will minimize the impact of […]

________ is the biggest potential disadvantage of using Keynote or PowerPoint to design presentation slides if you want to be able to be flexible with your information during the presentation. A) The steep learning curve B) The linear nature of […]

How can a presenter make handouts as effective as possible? A) Use them to rouse the audience to action B) Use them to paint the big picture for the audience C) Use them to convey and connect major ideas D) […]

Texting, online chat systems, and instant messaging are examples of which category of communication tools? A) Messaging B) Telepathic C) Web content D) Information architecture E) Three-dimensional Which of the following is one of the goals of a well-written buffer? […]

When should you determine the size and location of your audience? A) During the writing stage B) When choosing the message channel C) During the completing state D) When determining the message medium E) When conducting an audience analysis The […]

Which of the following is an advantage of messaging over email? A) Messaging functions on an open system B) Anyone can participate in messaging C) Messaging is better for conversational exchanges D) There are no centralized control mechanisms for security […]

Which of these is a good tactic for a minimizing the influence of cultural and personal beliefs when crafting a message? A) By clarifying expectations B) By incorporating vague concepts C) By using selective perceptions D) By incorporating cultural elements […]

When you’re determining the approach and the software to use for a business presentation, keep all of the following in mind EXCEPT A) Match the task to the tool, not the other way around. B) If they are used poorly, […]

If you devote sufficient time to planning a business message before you begin writing it, you can expect all of the following outcomes EXCEPT A) expediting the writing process. B) avoiding embarrassing blunders. C) experiencing extra work and stress in […]

In a formal proposal, the work plan section A) reviews the situation at hand and explains the need for action. B) describes your action plan for accomplishing the work that must be done. C) describes your organization’s experience, personnel, and […]

Which of the following will help to save time and money when conducting research? A) Use only primary research B) Limit your search to major news outlets C) Prioritize your research needs D) Research each source’s credibility before looking at […]

Use the ________ when you must deliver bad news, if your audience has an emotional investment in the situation. A) blended approach B) discretionary approach C) direct approach D) indirect approach Which of these can companies use to increase user […]