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EXAMS
The accounting cycle begins by recording _____________ in the form of journal entries.
Answer=Business Transactions
Answer= True
Rent is prepaid for an office for the business, is the accounting entry to the to the prepaid rent
account a debit or a credit?
Answer = debit
Debit and credit rules for accounts on one side of the accounting equation are mirror images of
those on the
Answer = True
Answer = Expenses
Supplies are purchased for cash, is the double entry posting to the supplies on hand account a
debit or credit entry?
Answer = debit
The payment of a liability is recorded by a debit to the liability account and a credit to the
owner's capital account.
Answer = False
The business carried out work for a customer and was paid in cash, is the entry to the revenue
account a debit or a credit?
Answer = Credit
Cash paid to a supplier for goods supplied by them on credit terms, is the entry to accounts
payable a debit or credit entry?
Answer = debit
A form of discount granted by a retailer to encourage a customer to buy the goods is called:
Answer = The value of the information exceeds the cost of producing it.
Answer = True
Work was completed and invoiced to a customer for payment within 30 days, is the posting to
accounts receivable a debit or a credit?
Answer = Credit
Answer = Controller
Which of the following expenses is recognized under the direct association with revenue
criterion?
Government agency gives a CPA certificate to an accountant after he passes a series of rigorous
examinations administered by the Board of Accountancy (BOA).
Answer = PRC
Which of the following account titles will not appear in the balance sheet of a single
proprietorship?
Answer = a. Investing
Answer = Operating
The term operating, financing and investing as used to categorized what type of item?
Inventory and accounts receivable are classified in the balance sheet as?
Answer = Current assets
Which of the following accounts will normally appear in the ledger of a merchandising company
that uses a perpetual inventory system?
Select one:
a. Interest Revenue
b. Ticket Sales Revenue
c. Deferred Revenue
d. Rent revenue
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The correct answer is: Deferred Revenue
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Step Time Action State
Question text
The business carried out work for a customer and was paid in cash, is the entry to the revenue account a debit
or a credit?
Select one:
a. Debit
b. Credit
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The correct answer is: Credit
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Information is material if:
Select one:
a. It corresponds to financial variables
b. Its omission or misstatement could influence the economic decisions of users taken on the basis of the
financial statements.
c. None of the previous answers.
d. It is recorded on the basis of concrete documents.
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The correct answer is: Its omission or misstatement could influence the economic decisions of users taken on
the basis of the financial statements.
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2 17/10/17, Saved: Its omission or misstatement could influence the economic decisions of users
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Question text
The accounting cycle begins by recording _____________ in the form of journal entries.
Select one:
a. Business Contracts
b. Financial Information
c. Corporate minutes
d. Business Transactions
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The correct answer is: Business Transactions
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Accounting is the language of business.
Select one:
a. False
b. True
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The correct answer is: True
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Which of the following statements is?incorrect?
Select one:
a. The business enterprise must have ownership over the items reported as business assets.
b. An asset has future usefulness or service potential
c. An asset does not always have physical attributes.
d. A reliable monetary value must be assignable to the reported asset items.
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The correct answer is: The business enterprise must have ownership over the items reported as business assets.
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2 17/10/17, Saved: The business enterprise must have ownership over the items reported as A
10:00 business assets.
Question text
When does an accountant record a transaction?
Select one:
a. On manager's demand
b. No correct answer
c. If it has a tax implication
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The correct answer is: If it is materialized by a concrete document
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Financial statements are prepared:
Select one:
a. For corporations, but not for sole proprietorship or partnership.
b. Only for publicly owned business organizations.
c. In either monetary or non-monetary terms, depending upon the need of the decision-maker.
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The correct answer is: Primarily for the benefit of persons outside of the business organizations
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Information is cost effective when:
Select one:
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The correct answer is: The value of the information exceeds the cost of producing it.
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Question text
Which financial statement is used to show what the firm owns?
Select one:
a. Income statement
b. Balance sheet
c. Cash flow statement
d. Statement of retained earnings
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The correct answer is: Balance sheet
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Which is the last step of accounting as a process of information?
Select one:
a. Communication of information
b. Analysis and interpretation of information
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The correct answer is: Preparation of financial statement
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Probable future sacrifices of economic benefits arising from past transactions are known as:
Select one:
a. Expenses
b. Assets
c. Liabilities
d. Income
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The correct answer is: Liabilities
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All entries must be supported by a source document.
Select one:
a. True
b. False
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The correct answer is: True
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Government agency gives a CPA certificate to an accountant after he passes a series of rigorous examinations
administered by the Board of Accountancy (BOA).
Select one:
a. BIR
b. Civil Service Commission
c. PRC
d. School Registrar
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The correct answer is: PRC
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What are the accounting standards issued by the IASB called?
Select one:
a. Internationally Accepted Accounting Standards
b. International Financial Accounting Standards
c. International Accounting Principles
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The correct answer is: International Financial Reporting Standards
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The basic function of financial accounting is to
Select one:
a. No correct answer
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The correct answer is: Interpret financial data
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Which is the last step of accounting as a process of information?
Select one:
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The correct answer is: Preparation of financial statement
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Which of the following is more appropriate definition for Accountancy?
Select one:
a. Accountancy refers to the process of recording financial transactions in the order of their occurrence
b. Accountancy refers to the art of communicating the financial transactions to accounting users
c. Accountancy refers to the art of classifying the recorded transactions under their respective accounts
d. Accountancy refers to the systematic knowledge of accounting.
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The correct answer is: Accountancy refers to the art of classifying the recorded transactions under their
respective accounts
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10:00 their respective accounts
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A loan can be described as a short-term loan of the period is:
Select one:
a. 3 years
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The correct answer is: Less than 1 year
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The basic purpose of accounting is to:
Select one:
a. Develop financial statements in conformity with generally accepted?
b. Provide as much useful information to decision makers as possible, regardless of cost.
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The correct answer is: Meet an organization's need for accounting information as efficiently as possible.
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Question 21
Correct
Mark 1.00 out of 1.00
Question text
A one year reporting period that begins on January 1 ends on December 31 is:
Select one:
a. Semester reporting period
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The correct answer is: Calendar year reporting period
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A business transaction can affect two accounts on the same side of the accounting equation and still leave the
equation in balance.
Select one:
a. True
b. False
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The correct answer is: True
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The type of accounting which reports on the performance of the firm to essential external users.
Select one:
a. Internal auditing
b. Managerial accounting
c. Financial accounting
d. External accounting
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The correct answer is: Financial accounting
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Which of the following is not a characteristics of an economic resource so that it could be classified as an asset
of the business?
Select one:
a. The resource has future resource has future service potential.
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The correct answer is: The economic resource has physical existence.
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2 17/10/17, 10:00 Saved: The economic resource has physical existence. Answer
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Although accounting information is used by a wide variety of external parties, financial reporting is primarily
directed toward the information needs of:
Select one:
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The correct answer is: Investors and creditors
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Financially, shareholders are rewarded by
Select one:
a. Profits
b. Dividends
c. No correct answer
d. Interest
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The correct answer is: Dividends
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The four principal qualitative characteristics of useful financial statements are:
Select one:
a. Understandability, relevance, accuracy, comparability
b. Understandability, relevance, reliability, simplicity
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The correct answer is: Understandability, relevance, reliability, comparability
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The top of the T account is used for account titles. Credits are entered on the left side of the T; debits, on the
right.
Select one:
a. True
b. False
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The correct answer is: False
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Every transaction affects two or more accounts and is recorded by equal amounts of debits and credits.
Select one:
a. True
b. False
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The correct answer is: True
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Which of the following groups use financial accounting?
Select one:
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The correct answer is: All of the answers correct
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Which of the following is never debited when making closing entries?
Select one:
a. Revenue
b. Owner's Drawings
c. Expenses
d. Income summary?
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The correct answer is: Expenses
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An asset account appears on the right side of the accounting equation and is also increased on the right side of
its T account.
Select one:
a. True
b. False
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The correct answer is: False
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Select one:
a. True
b. False
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The correct answer is: False
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Accounting involves communication.
Select one:
a. True
b. False
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The correct answer is: True
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Cash paid to a supplier for goods supplied by them on credit terms, is the entry to accounts payable a debit or
credit entry?
Select one:
a. Credit
b. Debit
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The correct answer is: Debit
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Which financial statement displays the revenues and expenses of a company for a period of time?
Select one:
a. Cash Flow
b. Balance sheet
c. Statement of Owner's Equity
d. Income Statement
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The correct answer is: Income Statement
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Accounting deals with quantifiable information.
Select one:
a. True
b. False
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The correct answer is: True
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The liabilities that are payable in more than a year and are not be liquidated from current assets.
Select one:
a. Current liabilities
b. All of the answers correct
c. Contingent liabilities
d. Fixed liabilities
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The correct answer is: Fixed liabilities
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Which of the following statements is false?
Select one:
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The correct answer is: Owner's equity can be bigger than the total assets.
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2 17/10/17, 10:00 Saved: Owner's equity can be bigger than the total assets. Answer
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Temporary accounts would include:
Select one:
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The correct answer is: Drawing, income and expenses
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Accounting provides information on
Select one:
a. Financial conditions of an institution
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The correct answer is: All of the answers correct
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Amount generated from sales in a business is called:
Select one:
a. Income
b. Operating profit
c. Net income
d. Gross Profit
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The correct answer is: Income
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The debts which are to be repaid within a short period (year or less) are known as
Select one:
a. Contingent liabilities
b. Current liabilities
c. All of the answers correct
d. Fixed liabilities
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The correct answer is: Current liabilities
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Which of the following will not be reported in the statement of changes in equity?
Select one:
a. Additional investment of the proprietor
b. Balance of capital at the end of the period.
c. Net income during the period
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The correct answer is: Proceeds from the sale of the building
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2 17/10/17, 10:00 Saved: Proceeds from the sale of the building Answer sav
Question text
All of the following are characteristics of managerial accounting, except:
Select one:
a. Reports are used primarily by insiders rather than by persons outside of the business entity.
b. Information may be tailored to assist in specific managerial decisions.
Answer: C
c. Information must be developed in conformity with generally accepted accounting principles or with income
tax regulations.
d. Its purpose is to assist managers in planning and controlling business operations.
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The correct answer is: Information must be developed in conformity with generally accepted accounting
principles or with income tax regulations.
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A credit to an account always increases it: a debit to an account always deceases it.
Select one:
a. False
b. True
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The correct answer is: False
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Person who manages all of a firm's accounting activities.
Select one:
a. Accounting staff
b. Payroll manager
c. Controller
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The correct answer is: Controller
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It is usually used in connection with activities and events that result to the inflow of assets and/or outflow of
liabilities.
Select one:
a. Equity
b. Liabilities
c. Assets
d. Income
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The correct answer is: Income
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The term book keeping and accountancy can be used interchangeably.
Select one:
a. False
b. True
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The correct answer is: True
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The basic function of financial accounting is to
Select one:
a. Record all business transactions
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The correct answer is: Interpret financial data