ACC201 … STUDY GUIDE for TEST ONE (Chapters 1, 2, 3)
Test #1 will consist of 50-60 of the questions below.
(Finding the “answers” to the questions is part of the review)
True or Fal
1.Owner's equity reprents the amount of asts that can be claimed by creditors.
2.数连The right-hand side of an account is always the increa side.
3.A ledger is a chronological record of a business’s transactions.
4.The chart of accounts proves that all transactions were correctly journalized and posted.
老公pk老婆5.In accrual-basis of accounting, revenues are recorded when a rvice is performed.
6.Current liabilities are expected to be paid off or eliminated in the next 12 months.
7.Each time a business records revenue the account Cash is incread.
8.Accumulated depreciation of an ast – its depreciation expen = book value.
9.Financial accounting provides information for people inside the company while managerial accounting focus on information for people outside the company.
10.Every adjusting entry affects one account on the income statement and one account on the balance sheet.
11.Financial statements will be inaccurate if they are prepared before the adjusting entries are completed.
12.The “current ratio” is calculated by dividing the Total Asts by Total Liabilities.
13.During the closing process, ALL revenue and expen accounts are clod.
14.“Liquidity” is a measure of how quickly an ast can be converted into cash.
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15.Revenues and expens are also classified as “current” or “long-term” on a classified Income Statement.
16.Cash-basis accounting results in a more accurate measurement of net income than does the accrual basis of accounting.
17.Financial statements will be inaccurate if they are prepared before the adjusting entries are completed.
18.Risk is the amount of uncertainty about the return we expect to earn in the future.
19.Accounting records are also referred to as the books.
20. Source documents provide evidence of business transactions and are the basis for accounting entries.
精成语21.As prepaid expens are ud up, the costs of the asts become expens
22.An account balance is the difference between the debits and credits for an account inc
luding any beginning balance.
23. The debt ratio reflects the risk of a company to both its owners and creditors.
24.The higher the debt ratio, the higher risk of a company not being able to meet its obligations.
25. The debt ratio is calculated by dividing total asts by total liabilities.
26.A company that finances a relatively large portion of its asts with liabilities is said to have a high degree of financial leverage.
27. If a company is highly leveraged, this means that it has relatively low risk of not being able to repay its debt. 80后的游戏
28.A company's fiscal year must correspond with the calendar year.
29. Adjusting entries are made after the preparation of financial statements.
30. Current asts and current liabilities are expected to be ud up or come due within one year or the company's operating cycle whichever is longer. 工会工作汇报材料
31.For a corporation, the equity ction is divided into two main accounts: Common Stock and Retained Earnings.
32. Profit margin can also be called return on sales.
33. The Income Summary account is clod to the retained earnings account.
34.The primary objective of financial accounting is:
A. To rve the decision-making needs of internal urs
B. To provide financial statements to help external urs analyze and interpret an organization's activities
C. To monitor and control company activities
D. To provide information on both the costs and benefits of managing products and rvices
35.A corporation:
A. Is a legal entity parate and distinct from its owners
B. Must have many owners
C. Has shareholders who have unlimited liability for the acts of the corporation
D. Does not have to pay taxes
36.Net Income:
A. Decreas equity
B. Equals asts minus liabilities
屈原诗C. Is the excess of revenues over expens
D. Reprents the owners' claims against asts
37.Return on asts is:
A. Also called rate of return
B. Computed by dividing net income by beginning asts plus ending asts divided by two
C. Computed by multiplying net income by total asts
D. Ud in helping evaluate expens
38.Risk is:
A. Net income divided by average total asts
B. The reward for investment
C. The uncertainty about the expected return that will be earned from an investment
D. Unrelated to expected return
39.The statement of retained earnings:
A. Reports how retained earnings changes at a point in time
B. Reports how retained earnings changes over a period of time
C. Reports on cash flows for operating, financing and investing activities over a period of time
D. Reports on amounts for asts, liabilities and equity at a point in time
