114 online test bank for fundamental accounting principles 22nd Đề thi trắc nghiệm có đáp án

114 Online Test Bank for Fundamental Accounting
Principles 22nd Edition
by Wild Multiple Choice Questions - Page 1
Marsha Bogswell is the owner of Bogswell Legal Services. Which
accounting principle requires Marsha to keep her personal financial
information separate from the financial information of Bogswell
Legal Services?
1.

A. Monetary unit assumption.

2.

B. Going-concern assumption.

3.

C. Cost principle.

4.

D. Business entity assumption.

5.

E. Matching principle.

Which of the following accounting principles require that all goods
and services purchased be recorded at actual cost?
1.

A. Going-concern assumption.

2.

B. Matching principle.

3.

C. Cost principle.

4.

D. Business entity assumption.

5.

E. Consideration assumption.

The accounting concept that requires every business to be
accounted for separately from other business entities, including its
owner or owners is known as the:
1.

A. Time-period assumption.

2.

B. Business entity assumption.

3.

C. Going-concern assumption.

4.

D. Revenue recognition principle.


5.

E. Cost principle.

Creditors' claims on the assets of a company are called:
1.

A. Net losses.

2.

B. Expenses.

3.

C. Revenues.

4.

D. Equity.

5.

E. Liabilities.

All of the following are true regarding ethics except:
1.

A. Ethics are beliefs that separate right from wrong.

2.

B. Ethics rules are often set for CPAs.

3.

C. Ethics do not affect the operations or outcome of a company.

4.

D. Are critical in accounting.

5.

E. Ethics can be difficult to apply.

If a company receives $12,000 from the owner to establish a
proprietorship, the effect on the accounting equation would be:
1.

A. Assets decrease $12,000 and equity decreases $12,000.

2.

B. Assets increase $12,000 and liabilities decrease $12,000.

3.

C. Assets increase $12,000 and liabilities increase $12,000.

4.

D. Liabilities increase $12,000 and equity decreases $12,000.

5.

E. Assets increase $12,000 and equity increases $12,000.

To include the personal assets and transactions of a business's
owner in the records and reports of the business would be in
conflict with the:
1.

A. Objectivity principle.

2.

B. Monetary unit assumption.


3.

C. Business entity assumption.

4.

D. Going-concern assumption.

5.

E. Revenue recognition principle.

The private-sector group that currently has the authority to establish
generally accepted accounting principles in the United States is
the:
1.

A. APB.

2.

B. FASB.

3.

C. AAA.

4.

D. AICPA.

5.

E. SEC.

In a business decision where there are ethical concerns, the
preferred course of action should be one that:
1.

A. Is agreed upon by the most managers.

2.

B. Maximizes the company's profits.

3.

C. Results in maintaining operations at the current level.

4.

D. Costs the least to implement.

5.

E. Avoids casting doubt on the decision maker and upholds trust.

Another name for equity is:
1.

A. Net income.

2.

B. Expenses.

3.

C. Net assets.

4.

D. Revenue.

5.

E. Net loss.


The independent group that is attempting to harmonize accounting
practices of different countries is the:
1.

A. AICPA.

2.

B. IASB.

3.

C. CAP.

4.

D. SEC.

5.

E. FASB.

Technology:
1.

A. Has replaced accounting.

2.

B. Has not improved the clerical accuracy of accounting.

3.

C. Reduces the time, effort and cost of recordkeeping.

4.

D. In accounting has replaced the need for decision makers.

5.

E. In accounting is only available to large corporations.

A corporation is:
1.

A. A business legally separate from its owners.

2.

B. Controlled by the FASB.

3.

C. Not responsible for its own acts and own debts.

4.

D. The same as a limited liability partnership.

5.

E. Not subject to double taxation.

Operating activities:
1.

A. Are the means organizations use to pay for resources like land, buildings
and equipment.

2.

B. Involve using resources to research, develop, purchase, produce, distribute

and market products and services.


3.

C. Involve acquiring and disposing of resources that a business uses to
acquire and sell its products or services.

4.

D. Are also called asset management.

5.

E. Are also called strategic management.

The difference between a company's assets and its liabilities, or net
assets is:
1.

A. Net income.

2.

B. Expense.

3.

C. Equity.

4.

D. Revenue.

5.

E. Net loss.

The question of when revenue should be recognized on the income
statement according to GAAP is addressed by the:
1.

A. Revenue recognition principle.

2.

B. Going-concern assumption.

3.

C. Objectivity principle.

4.

D. Business entity assumption.

5.

E. Cost principle.

When expenses exceed revenues, the resulting change in equity
is:
1.

A. Net assets.

2.

B. Negative equity.

3.

C. Net loss.

4.

D. Net income.

5.

E. A liability.


A limited partnership:
1.

A. Includes a general partner with unlimited liability.

2.

B. Is subject to double taxation.

3.

C. Has owners called stockholders.

4.

D. Is the same as a corporation.

5.

E. May only have two partners.

An example of an investing activity is:
1.

A. Paying wages of employees.

2.

B. Withdrawals by the owner.

3.

C. Purchase of land.

4.

D. Selling inventory.

5.

E. Contribution from owner.

If a company purchases equipment costing $4,500 on credit, the
effect on the accounting equation would be:
1.

A. Assets increase $4,500 and liabilities decrease $4,500.

2.

B. Equity decreases $4,500 and liabilities increase $4,500.

3.

C. Liabilities decrease $4,500 and assets increase $4,500.

4.

D. Assets increase $4,500 and liabilities increase $4,500.

5.

E. Equity increases $4,500 and liabilities decrease $4,500.

An example of a financing activity is:
1.

A. Buying office supplies.

2.

B. Obtaining a long-term loan.

3.

C. Buying office equipment.

4.

D. Selling inventory.


5.

E. Buying land.

The area of accounting aimed at serving the decision making needs
of internal users is:
1.

A. Financial accounting.

2.

B. Managerial accounting.

3.

C. External auditing.

4.

D. SEC reporting.

5.

E. Bookkeeping.

External users of accounting information include all of the following
except:
1.

A. Shareholders.

2.

B. Customers.

3.

C. Purchasing managers.

4.

D. Government regulators.

5.

E. Creditors.

Decreases in equity that represent costs of providing products or
services to customers, used to earn revenues are called:
1.

A. Liabilities.

2.

B. Equity.

3.

C. Withdrawals.

4.

D. Expenses.

5.

E. Owner's Investment.

A partnership:
1.

A. Is also called a sole proprietorship.

2.

B. Has unlimited liability for its partners.


3.

C. Has to have a written agreement in order to be legal.

4.

D. Is a legal organization separate from its owners.

5.

E. Has owners called shareholders.

Ethical behavior requires that:
1.

A. Auditors' pay not depend on the success of the client's business.

2.

B. Auditors invest in businesses they audit.

3.

C. Analysts report information favorable to their companies.

4.

D. Managers use accounting information to benefit themselves.

5.

E. Auditors' pay depends on the success of the client's business.

Resources a company owns or controls that are expected to yield
future benefits are:
1.

A. Assets.

2.

B. Revenues.

3.

C. Liabilities.

4.

D. Owner's Equity.

5.

E. Expenses.

If assets are $99,000 and liabilities are $32,000, then equity
equals:
1.

A. $32,000.

2.

B. $67,000.

3.

C. $99,000.

4.

D. $131,000.

5.

E. $198,000.

The rule that (1) requires revenue to be recognized at the time it is
earned, (2) allows the inflow of assets associated with revenue to


be in a form other than cash, and (3) measures the amount of
revenue as the cash plus the cash equivalent value of any noncash
assets received from customers in exchange for goods or services,
is called the:

1.

A. Going-concern assumption.

2.

B. Cost principle.

3.

C. Revenue recognition principle.

4.

D. Objectivity principle.

5.

E. Business entity assumption.

If assets are $300,000 and liabilities are $192,000, then equity
equals:
1.

A. $108,000.

2.

B. $192,000.

3.

C. $300,000.

4.

D. $492,000.

5.

E. $792,000.

On December 15 of the current year, Conrad Accounting Services
signed a $40,000 contract with a client to provide bookkeeping
services to the client in the following year. Which accounting
principle would require Conrad Accounting Services to record the
bookkeeping revenue in the following year and not the year the
cash was received?
1.

A. Monetary unit assumption.

2.

B. Going-concern assumption.

3.

C. Cost principle.

4.

D. Business entity assumption.

5.

E. Revenue recognition principle.


An example of an operating activity is:
1.

A. Paying wages.

2.

B. Purchasing office equipment.

3.

C. Borrowing money from a bank.

4.

D. Selling stock.

5.

E. Paying off a loan.

Which of the following purposes would financial statements serve
for external users?
1.

A. To find information about projected costs and revenues of proposed
products.

2.

B. To assess employee performance and compensation.

3.

C. To assist in monitoring consumer needs and price concerns.

4.

5.

D. To fulfill regulatory requirements for companies whose stock is sold to the
public.
E. To determine purchasing needs.

The accounting concept that requires financial statement
information to be supported by independent, unbiased evidence is:
1.

A. Business entity assumption.

2.

B. Revenue recognition principle.

3.

C. Going-concern assumption.

4.

D. Time-period assumption.

5.

E. Objectivity principle.

All of the following regarding a Certified Public Accountant are true
except:
1.

A. Must meet education and experience requirements.

2.

B. Must pass an examination.


3.

C. Must exhibit ethical character.

4.

D. May also be a Certified Management Accountant.

5.

E. Cannot hold any certificate other than a CPA.

If a company uses $1,300 of its cash to purchase supplies, the
effect on the accounting equation would be:
1.
2.

A. Assets increase $1,300 and liabilities decrease $1,300.
B. One asset increases $1,300 and another asset decreases $1,300, causing
no effect.

3.

C. Assets decrease $1,300 and equity decreases $1,300.

4.

D. Assets decrease $1,300 and equity increases $1,300.

5.

E. Assets increase $1,300 and liabilities increase $1,300.

Revenue is properly recognized:

1.

A. When the customer makes an order.

2.

B. Only if the transaction creates an account receivable.

3.

C. At the end of the accounting period.

4.

5.

D. Upon completion of the sale or when services have been performed and
the business obtains the right to collect the sales price.
E. When cash from a sale is received.

Net Income:
1.

A. Decreases equity.

2.

B. Represents the amount of assets owners put into a business.

3.

C. Equals assets minus liabilities.

4.

D. Is the excess of revenues over expenses.

5.

E. Represents owners' claims against assets.


Accounting is an information and measurement system that does all
of the following except:
1.

A. Identifies business activities.

2.

B. Records business activities.

3.

C. Communicates business activities.

4.

D. Eliminates the need for interpreting financial data.

5.

E. Helps people make better decisions.

Increases in equity from a company's sales of products or services
are:
1.

A. Assets.

2.

B. Revenues.

3.

C. Liabilities.

4.

D. Owner's Equity.

5.

E. Expenses.

If equity is $300,000 and liabilities are $192,000, then assets equal:
1.

A. $108,000.

2.

B. $192,000.

3.

C. $300,000.

4.

D. $492,000.

5.

E. $792,000.

The International Accounting Standards Board (IASB):
1.

A. Hopes to create harmony among accounting practices of different countries
to improve comparability.

2.

B. Is the government group that establishes reporting requirements for
companies that issue stock to the investing public.


3.

C. Has the authority to impose its standards on companies around the world.

4.

D. Is the only source of generally accepted accounting principles (GAAP).

5.

E. Only applies to companies that are members of the European Union.

The accounting principle that requires accounting information to be
based on actual cost and requires assets and services to be
recorded initially at the cash or cash-equivalent amount given in
exchange, is the:
1.

A. Accounting equation.

2.

B. Cost principle.

3.

C. Going-concern assumption.

4.

D. Realization principle.

5.

E. Business entity assumption.

Revenues are:
1.

A. The same as net income.

2.

B. The excess of expenses over assets.

3.

C. Resources owned or controlled by a company.

4.

D. The increase in equity from a company's sales of products and services.

5.

E. The costs of assets or services used.

The description of the relation between a company's assets,
liabilities, and equity, which is expressed as Assets = Liabilities +
Equity, is known as the:
1.

A. Income statement equation.

2.

B. Accounting equation.

3.

C. Business equation.

4.

D. Return on equity ratio.

5.

E. Net income.


The primary objective of financial accounting is to:
1.

A. Serve the decision-making needs of internal users.

2.

B. Provide accounting information that serves external users.

3.

C. Monitor and control company activities.

4.

5.

D. Provide information on both the costs and benefits of looking after products
and services.
E. Know what, when, and how much product to produce.

The rule that requires financial statements to reflect the assumption
that the business will continue operating instead of being closed or
sold, unless evidence shows that it will not continue, is the:
1.

A. Going-concern assumption.

2.

B. Business entity assumption.

3.

C. Objectivity principle.

4.

D. Cost Principle.

5.

E. Monetary unit assumption.

The conceptual framework that the Financial Accounting Standards
Board (FASB) and the International Accounting Standards Board
(IASB) are attempting to converge and enhance includes the
following broad areas to guide standard setting except:
1.

A. Objectives

2.

B. Qualitative characteristics

3.

C. Uniformity

4.

D. Elements

5.

E. Recognition and measurement

A resource that the owner takes from the company is called a(n):
1.

A. Liability.


2.

B. Withdrawal.

3.

C. Expense.

4.

D. Contribution.

5.

E. Investment.

If a company is considering the purchase of a parcel of land that
was acquired by the seller for $85,000, is offered for sale at
$150,000, is assessed for tax purposes at $95,000, is recognized
by the purchaser as easily being worth $140,000, and is purchased
for $137,000, the land should be recorded in the purchaser's books
at:
1.

A. $95,000.

2.

B. $137,000.

3.

C. $138,500.

4.

D. $140,000.

5.

E. $150,000.

Which of the following accounting principles prescribes that a
company record its expenses incurred to generate the revenue
reported?
1.

A. Going-concern assumption.

2.

B. Matching principle.

3.

C. Cost principle.

4.

D. Business entity assumption.

5.

E. Consideration assumption.

The Superior Company acquired a building for $500,000. The
building was appraised at a value of $575,000. The seller had paid
$300,000 for the building 6 years ago. Which accounting principle
would require Superior to record the building on its records at
$500,000?


1.

A. Monetary unit assumption.

2.

B. Going-concern assumption.

3.

C. Cost principle.

4.

D. Business entity assumption.

5.

E. Revenue recognition principle.

114 Free Online Test Bank for Fundamental Accounting
Principles 22nd Edition by Wild Multiple Choice
Questions - Page 2
Use the following information for Meeker Corp. to determine the
amount of equity to report. Cash 70,000; Buildings 125,000; Land
205,000; Liabilities $130,000
1.

A. $390,000.

2.

B. $140,000.

3.

C. $20,000.

4.

D. $530,000.

5.

E. $270,000.

Zippy had cash inflows from operations $60,500; cash outflows
from investing activities of $47,000; and cash inflows from financing
of $25,000. The net change in cash was:
1.

A. $38,500 increase.

2.

B. $38,500 decrease.

3.

C. $132,500 decrease.

4.

D. $132,000 increase.

5.

E. $11,500 decrease.


Speedy has net income of $18,955, and assets at the beginning of
the year of $200,000. Assets at the end of the year total $246,000.
Compute its return on assets.
1.

A. 7.7%.

2.

B. 8.5%.

3.

C. 9.5%.

4.

D. 11.8%.

5.

E. 13.0%.

Dawson Electronic Services had revenues of $80,000 and
expenses of $50,000 for the year. Its assets at the beginning of the
year were $400,000. At the end of the year assets were worth
$450,000. Calculate its return on assets.
1.

A. 7.1%

2.

B. 7.5%

3.

C. 6.7%

4.

D. 20.0%

5.

E. 18.8%

The basic financial statements include all of the following except:
1.

A. Balance Sheet.

2.

B. Income Statement.

3.

C. Statement of Owner's Equity.

4.

D. Statement of Cash Flows.

5.

E. Statement of Changes in Assets.

Use the following information as of December 31 to determine
equity. Cash 57,000; Buildings 175,000; Equipment 206,000;
Liabilities $141,000


1.

A. $57,000.

2.

B. $141,000.

3.

C. $297,000.

4.

D. $438,000.

5.

E. $579,000.

The financial statement that identifies a company's cash receipts

and cash payments over a period of time is the:
1.

A. Statement of financial position.

2.

B. Statement of cash flows.

3.

C. Balance sheet.

4.

D. Income statement.

5.

E. Statement of changes in owner's equity.

Saddleback Company paid off $30,000 of its accounts payable in
cash. What would be the effects of this transaction on the
accounting equation?
1.

A. Assets, $30,000 increase; equity, $30,000 increase.

2.

B. Assets, $30,000 decrease; liabilities, $30,000 decrease.

3.

C. Assets, $30,000 decrease; liabilities, $30,000 increase.

4.

D. Liabilities, $30,000 decrease; equity, $30,000 increase.

5.

E. Assets, $30,000 decrease; equity $30,000 decrease.

Accounts payable appear on which of the following statements?
1.

A. Balance sheet.

2.

B. Income statement.

3.

C. Statement of owner's equity.

4.

D. Statement of cash flows.

5.

E. Transaction statement.

Distributions of cash or other resources by a business to its owners
are called:
1.

A. Withdrawals.

2.

B. Expenses.

3.

C. Assets.

4.

D. Retained earnings.

5.

E. Net Income.

The financial statement that shows the beginning balance of
owner's equity; the changes in equity that resulted from new

investments by the owner, net income (or net loss); withdrawals;
and the ending balance, is the:
1.

A. Statement of financial position.

2.

B. Statement of cash flows.

3.

C. Balance sheet.

4.

D. Income statement.

5.

E. Statement of owner's equity.

The accounting equation for Long Company shows an increase in
its assets and an increase in its liabilities. Which of the following
transactions could have caused that effect?
1.

A. Cash was received from providing services to a customer.

2.

B. Cash was received as an owner investment.

3.

C. Equipment was purchased on credit.

4.

D. Supplies were purchased for cash.

5.

E. Advertising expense for the month was paid in cash.

All of the following are classified as liabilities except:


1.

A. Accounts Receivable.

2.

B. Notes Payable.

3.

C. Wages Payable.

4.

D. Accounts Payable.

5.

E. Taxes Payable.

The financial statement that reports whether the business earned a
profit and also lists the revenues and expenses is called the:
1.

A. Balance sheet.

2.

B. Statement of owner's equity.

3.

C. Statement of cash flows.

4.

D. Income statement.

5.

E. Statement of financial position.

Rent expense appears on which of the following statements?
1.

A. Balance sheet.

2.

B. Income statement.

3.

C. Statement of owner's equity.

4.

D. Statement of periodic expenses.

5.

E. Statement of cash flows only.

A company's balance sheet shows: cash $22,000, accounts
receivable $16,000, office equipment $50,000, and accounts
payable $17,000. What is the amount of owner's equity?
1.

A. $17,000.

2.

B. $29,000.

3.

C. $71,000.

4.

D. $88,000.


5.

E. $105,000.

On August 31 of the current year, the assets and liabilities of
Gladstone, Inc. are as follows: Cash $30,000; Supplies, $600;
Equipment, $10,000; Accounts Payable, $8,500. What is the
amount of owner's equity as of August 31 of the current year?
1.

A. $49,100

2.

B. $32,100

3.

C. $12,100

4.

D. $10,900

5.

E. $30,900

Doc's Ribhouse had beginning equity of $52,000; net income of
$35,000, and withdrawals by the owner of $12,000. Calculate the
ending equity.
1.

A. $(5,000).

2.

B. $29,000.

3.

C. $5,000.

4.

D. $99,000.

5.

E. $75,000.

Rico's Taqueria had cash inflows from operating activities of
$27,000; cash outflows from investing activities of $22,000, and
cash outflows from financing activities of $12,000. Calculate the net
increase or decrease in cash.
1.

A. $61,000 increase.

2.

B. $37,000 increase.

3.

C. $7,000 decrease.

4.

D. $7,000 increase.

5.

E. $34,000 decrease.


On May 31 of the current year, the assets and liabilities of Riser,
Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250;
Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300.

What is the amount of owner's equity as of May 31 of the current
year?
1.

A. $8,300

2.

B. $13,050

3.

C. $20,500

4.

D. $31,100

5.

E. $40,400

Savvy Sightseeing had beginning equity of $72,000; revenues of
$90,000, expenses of $65,000, and withdrawals by owners of
$9,000. Calculate the ending equity.
1.

A. $88,000.

2.

B. $25,000.

3.

C. $97,000.

4.

D. $38,000.

5.

E. $47,000.

A company borrows $125,000 from the Northern Bank and receives
the loan proceeds in cash. This represents a(n):
1.

A. Revenue activity.

2.

B. Operating activity.

3.

C. Expense activity.

4.

D. Investing activity.

5.

E. Financing activity.

All of the following are classified as assets except:


1.

A. Accounts Receivable.

2.

B. Supplies.

3.

C. Equipment.

4.

D. Accounts Payable.

5.

E. Land.

Cragmont has beginning equity of $277,000, net income of
$63,000, withdrawals of $25,000 and no additional investments by
owners during the period. Its ending equity is:
1.

A. $365,000.

2.

B. $239,000.

3.

C. $189,000.

4.

D. $315,000.

5.

E. $277,000.

If assets are $365,000 and equity is $120,000, then liabilities are:
1.

A. $120,000.

2.

B. $245,000.

3.

C. $365,000.

4.

D. $485,000.

5.

E. $610,000.

The income statement reports all of the following except:
1.

A. Revenues earned by a business.

2.

B. Expenses incurred by a business.

3.

C. Assets owned by a business.

4.

D. Net income or loss earned by a business.

5.

E. The time period over which the earnings occurred.

Atkins Company collected $1,750 as payment for the amount owed
by a customer from services provided the prior month on credit.
How does this transaction affect the accounting equation for
Atkins?
1.

A. Assets would decrease $1,750 and liabilities would decrease $1,750.

2.

B. One asset would increase $1,750 and a different asset would decrease
$1,750, causing no effect.

3.

C. Assets would increase $1,750 and equity would increase $1,750.

4.

D. Assets would increase $1,750 and liabilities would increase $1,750.

5.

E. Liabilities would decrease $1,750 and equity would increase $1,750.

If a company has excess space in its building that it rents to another
company for $700, what is the effect on the accounting equation
when the first rent payment is collected?
1.

A. Assets would decrease $700 and liabilities would decrease $700.

2.

B. Assets would decrease $700 and equity would increase $700.

3.

C. Assets would increase $700 and equity would decrease $700.

4.

D. Assets would increase $700 and equity would increase $700.

5.

E. Liabilities would decrease $700 and equity would increase $700.

The accounting equation for Ying Company shows a decrease in its
assets and a decrease in its equity. Which of the following
transactions could have caused that effect?
1.

A. Cash was received from providing services to a customer.

2.

B. The company paid an amount due on credit.

3.

C. Equipment was purchased for cash.

4.

D. A utility bill was received for the current month, to be paid in the following
month.


5.

E. Advertising expense for the month was paid in cash.

Cage Company had income of $350 million and average invested
assets of $2,000 million. Its return on assets (ROA) is:
1.

A. 1.8%.

2.

B. 35%.

3.

C. 17.5%.

4.

D. 5.7%.

5.

E. 3.5%.

The assets of a company total $700,000; the liabilities, $200,000.
What are the net assets?
1.

A. $900,000.

2.

B. $700,000.

3.

C. $500,000.

4.

D. $200,000.

5.

E. It is impossible to determine unless the amount of this owners' investment
is known.

If the assets of a company increase by $55,000 during the year and
its liabilities increase by $25,000 during the same year, then the
change in equity of the company during the year must have been:
1.

A. An increase of $80,000.

2.

B. A decrease of $80,000.

3.

C. An increase of $30,000.

4.

D. A decrease of $30,000.

5.

E. An increase of $25,000.

Rushing had income of $150 million and average invested assets of
$1,800 million. Its return on assets is: