1

Financial Accounting and Reporting Practice Questions

Multiple Choice
Identify the choice that best completes the statement or answers the question.

____ 1. Which of the following statements is incorrect?

a. All of the accounts of a specific business c. Transactions often overlap accounting
enterprise are referred to as a ledger periods
b. Every adjusting entry affects both a d. The fact that an expense is recognized on
balance sheet and an income statement the income statement indicates that an
equivalent outlay of cash has been made
in the same period
____ 2. The quality of earnings suggests that
a. net income is the best measure of the c. shareholders want the corporation to earn
results of operations enough income to be able to pay its debts
b. continuing operations and one-time d. income from continuing operations is
transactions are of equal importance better than income from one-time
transactions
____ 3. Which statement is true?
a. Extraordinary items are part of c. Extraordinary items are combined with
discontinued operations continuing operations on the income
statement
b. Discontinued operations are a separate d. Extraordinary items are allowed under
category on the income statement IFRS
____ 4. Why is it important for companies to report their accounting changes to the public?
a. The results of operations need to be c. Some accounting changes are more
compared between periods extraordinary than others
b. Most accounting changes increase net d. Accounting changes affected are more
income, and investors need to know why extraordinary than others
the increase in net income occurred
____ 5. Other comprehensive income
a. includes unrealized gains and losses on c. affects earnings per share includes
investments
b. has a no effect on income tax d. includes extraordinary gains and losses
____ 6. Never Lost Systems earned income before tax of P190,000. Taxable income was P165,000, and the income
tax rate was 35%. Never Lost recorded income tax with this journal entry.
a. Income tax expense (66,500); Income tax c. Income tax payable (66,500); Income tax
payable (57,750); Deferred tax liability expense (57,750); Deferred tax liability
(8,750) (8,750)
b. Income tax expense (66,500); Income tax d. Income tax expense (57,750); Income tax
payable (66,500) payable (57,750)
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____ 7. Deferred tax liability is usually

a. long-term and reported on the income c. short-term and reported on the statement
statement of changes in equity
b. long-term and reported on the balance d. short-term and reported on the income
sheet statement
____ 8. The main purpose of the statements of changes in equity is to report
a. reasons for changes in the equity accounts c. financial positions
b. results of operations d. comprehensive income
____ 9. An audit report by independent accountants
a. gives investors assurance that the c. ensures that the financial statements are
company’s financial statements conform error-free
to GAAP
b. is ultimately the responsibility of the d. gives investors assurance that the
management of the client company company is a safe investment
____ 10. In a statement of cash flows, receipts from sales of property, plant, and equipment and other productive assets
should generally be classified as cash inflows from
a. operating activities c. investing activities
b. financing activities d. selling activities
____ 11. In a statement of cash flows, receipts from sales of property, plant, and equipment and other productive assets
should generally be classified as cash inflows from
a. operating activities c. lending activities
b. borrowing activities d. financing activities
____ 12. In a statement of cash flows, proceeds from issuing equity instruments should be classified as cash inflows
from
a. lending activities c. investing activities
b. operating activities d. financing activities
____ 13. In a statement of cash flows, payments to acquire debt instruments of other entities (other than cash
equivalents) should be classified as cash outflows for
a. operating activities c. financing activities
b. investing activities d. lending activities
____ 14. It is an objective of the statement of cash flows to
a. disclose changes during the period in all c. provide information about the operating,
assets and all equity accounts investing, and financing activities of an
entity during a period
b. disclose the change in working capital d. none of these
during the period
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____ 15. The primary purpose of the statement of cash flows is to provide information
a. about the operating, investing, and c. about the cash receipts and cash payments
financing activities of an entity during a of an entity during a period
period
b. that is useful in assessing cash flow d. about the entity's ability to meet its
prospects obligations, its ability to pay dividends,
and its needs for external financing
____ 16. Of the following questions, which statement of cash flows would not answer one?
a. Where did the cash come from during the c. Were all the cash expenditures of benefit
period? to the company during the period?
b. What was the cash used for during the d. What was the change in the cash balance
period? during the period?
____ 17. The first step in preparing the statement of cash flows requires using the information included in which
comparative financial statements?
a. Statements of cash flows c. Income statements
b. Balance sheets d. Statements of retained earnings
____ 18. Cash equivalents are
a. Treasury bills, commercial paper, and c. readily convertible into known amounts of
money market funds purchased with cash
excess cash
b. investments with original maturities of d. all of these
three months or less
____ 19. A company borrows P10,000 and signs a 90-day nontrade note payable. In preparing a statement of cash
flows (indirect method), this event would be reflected as a(n)
a. addition adjustment to the net income in c. cash inflow from investing activities
cash flows from the operating activities
section
b. cash outflow from investing activities d. cash inflow from financing activities
____ 20. To arrive at net cash provided by operating activities, it is necessary to report revenues and expenses on a
cash basis. This is done by
a. re-recording all income statement c. eliminating the effects of income
transactions that directly affect cash in a statement transactions that did not result in
separate cash flow journal a corresponding increase or decrease in
cash
b. estimating the percentage of income d. eliminating all transactions that have no
statement transactions that were originally current or future effect on cash, such as
reported on a cash basis and projecting depreciation, from the net income
this amount to the entire array of income computation
statement transactions
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____ 21. An increase in inventory balance would be reported in a statement of cash flows using the indirect method
(reconciliation method) as a(n)
a. addition to the net income in arriving at c. cash outflow from investing activities
net cash flow from operating activities
b. deduction from net income in arriving at d. cash outflow from financing activities
net cash flow from operating activities
____ 22. A statement of cash flows typically would not disclose the effects of
a. capital stock issued at an amount greater c. cash dividends paid
than the par value
b. stock dividends declared d. a purchase and immediate retirement of
treasury stock
____ 23. When preparing a statement of cash flows (indirect method), which of the following is not an adjustment to
reconcile net income to net cash provided by operating activities?
a. A change in interest payable c. A change in income taxes payable
b. A change in dividends payable d. All of these are adjustments
____ 24. Declaration of a cash dividend on common stock affects cash flows from operating activities under the direct
and indirect methods as follows:
a. Direct Method (Outflow); Indirect Method c. Direct Method (Outflow); Indirect Method
(Inflow) (Outflow)
b. Direct Method (Inflow); Indirect Method d. Direct Method (No effect); Indirect
(Inflow) Method (No effect)
____ 25. In a statement of cash flows, the cash flows from investing activities section should report
a. the issuance of common stock in exchange c. a major repair to machinery charged to
for a factory building accumulated depreciation
b. stock dividends received d. the assignment of accounts receivable
____ 26. Ven Corporation had the following transactions occur in the current year:

1 Cash sale of merchandise inventory.

2 Sale of a delivery truck at book value
3 Sale of Ven common stock for cash
4 Issuance of a note payable to a bank for cash
5 Sale of security held as an available-for-sale investment
6 Collection of the loan receivable

How many of the above items will appear as a cash inflow from investing activities on a statement of cash
flows for the current year?
a. Five items c. Three items
b. Four items d. Two items
____ 27. Which of the following would be classified as a financing activity on a statement of cash flows?
a. Declaration and distribution of a stock c. Sale of a loan receivable
dividend
b. Deposit to a bond sinking fund d. Payment of interest to a creditor
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____ 28. The amortization of bond premium on long-term debt should be presented in a statement of cash flows (using
the indirect method for operating activities) as a(n)
a. addition to net income c. investing activity
b. deduction from net income d. financing activity
____ 29. Vince Company reported P80,000 of selling and administrative expenses on its income statement for the past
year. The company had depreciation expenses and an increase in prepaid expenses associated with the selling
and administrative expenses for the year. Assuming the use of the direct method, how would these items be
handled in converting the accrual-based selling and administrative expenses to cash?
a. Depreciation (Deducted from); Increase in c. Depreciation (Deducted from); Increase in
Prepaid Expenses (Deducted from) Prepaid Expenses (Added to)
b. Depreciation (Added to); Increase in d. Depreciation (Added to); Increase in
Prepaid Expenses (Added to) Prepaid Expenses (Deducted from)
____ 30. When preparing a statement of cash flows (indirect method), an increase in ending inventory over beginning
inventory will result in an adjustment to reported net earnings because
a. cash was increased while the cost of goods c. acquisition of inventory is an investment
sold was decreased activity
b. cost of goods sold on an accrual basis is d. acquisition of inventory is an investment
lower than on a cash basis activity
____ 31. When preparing a statement of cash flows, a (decrease) in accounts receivable during a period would cause
one of the following adjustments in determining cash flow from operating activities?
a. Direct Method (Increase); Indirect Method c. Direct Method (Increase); Indirect Method
(Decrease) (Increase)
b. Direct Method (Decrease); Indirect d. Direct Method (Decrease); Indirect
Method (Decrease) Method (Decrease)
____ 32. In determining net cash flow from operating activities, a decrease in accounts payable during a period
a. means that income on an accrual basis is c. requires an increased adjustment to the
less than income on a cash basis cost of goods sold under the direct method
b. requires an additional adjustment to net d. requires a decreased adjustment to the cost
income under the indirect method of goods sold under the direct method
____ 33. When preparing a statement of cash flows and (increase) in accounts payable during a period, would you
require the following adjustments in determining cash flows from operating activities?
a. Indirect Method (Increase); Direct Method c. Indirect Method (Increase); Direct Method
(Decrease) (Increase)
b. Indirect Method (Decrease); Direct d. Indirect Method (Decrease); Direct
Method (Increase) Method (Decrease)
____ 34. When preparing a statement of cash flows, a (decrease) in prepaid insurance during a period would require the
following adjustments in determining cash flows from operating activities?
a. Indirect Method (Increase); Direct Method c. Indirect Method (Increase); Direct Method
(Decrease) (Increase)
b. Indirect Method (Decrease); Direct d. Indirect Method (Decrease); Direct
Method (Increase) Method (Decrease)
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____ 35. When preparing a statement of cash flows, the following are used for which method in determining cash
flows from operating activities?
a. Gross Accounts Receivable (Indirect); Net c. Gross Accounts Receivable (Direct); Net
Accounts Receivable (Direct) Accounts Receivable (Direct)
b. Gross Accounts Receivable (Direct); Net d. Gross Accounts Receivable (Neither); Net
Accounts Receivable (Indirect) Accounts Receivable (Indirect)
____ 36. Which of the following statements is correct?
a. The indirect method starts with income c. The direct method is more consistent with
before extraordinary items the primary purpose of the statement of
cash flows
b. The direct method is known as the d. All of these
reconciliation method
____ 37. When using the indirect method to prepare the operating section of a statement of cash flows, which of the
following is added to net income to compute cash provided by/used by operating activities?
a. Increase in accounts receivable c. Amortization of patent
b. Gain on sale of land d. All of the above are added to net income
to arrive at cash flow from operating
activities
____ 38. When using the indirect method to prepare the operating section of a statement of cash flows, which of the
following is deducted from net income to compute cash provided by/used by operating activities?
a. Decrease in accounts receivable c. Amortization of patent
b. Gain on sale of land d. All of the above are deducted from net
income to arrive at cash flow from
operating activities
____ 39. Zack Company reports its income from investments under the equity method and recognized income of
P25,000 from its investment in Moss Co. during the current year, even though no dividends were declared or
paid by Moss. On Zack's statement of cash flows (indirect method), the P25,000 should
a. not be shown c. be shown as a cash outflow from
financing activities
b. be shown as a cash inflow from investing d. be shown as a deduction from net income
activities in cash flows from the operating activities
section
____ 40. In reporting extraordinary transactions on a statement of cash flows (indirect method), the
a. the gross amount of an extraordinary gain c. net of tax amount of an extraordinary gain
should be deducted from the net income should be deducted from net income
b. net of tax amount of an extraordinary gain d. the gross amount of an extraordinary gain
should be added to net income should be added to the net income
____ 41. Which of the following is shown on a statement of cash flows?
a. A stock dividend c. An appropriation of retained earnings
b. A stock split d. None of these
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____ 42. The stock dividend should be reported on the statement of cash flows (indirect method) as
a. an outflow from financing activities of c. an outflow from investing activities of
P200,000 P310,000
b. an outflow from financing activities of d. Stock dividends are not shown on a
P310,000 statement of cash flows
____ 43. On the statement of cash flows (indirect method), the flood loss should
a. be shown as an addition to a net income of c. be shown as an inflow from investing
P63,000 activities of P63,000
b. be shown as an addition to a net income of d. not be shown
P90,000
____ 44. What amount is included in financing activities for the above transaction?
a. Cash payment c. Zero
b. Acquisition price d. Mortgage amount
____ 45. Supplemental disclosures are required only when the statement of cash flows is prepared using the indirect
method, including
a. A schedule reconciling net income with c. Amounts deducted for depreciation and
net cash flows from operating activities amortization
b. Amounts paid for interest and taxes d. Significant noncash investing and
financing activities
____ 46. All of the following activities are reported on the statement of cash flows except
a. marketing activities c. operating activities
b. investing activities d. financing activities
____ 47. Activities that create long-term liabilities are usually
a. financing activities c. non-cash investing and financing activities
b. operating activities d. investing activities
____ 48. Activities affecting long-term assets are
a. financing activities c. operating activities
b. marketing activities d. investing activities
____ 49. Activities that obtain the cash needed to launch and sustain a company are:
a. marketing activities c. investing activities
b. income activities d. financial activities
____ 50. The exchange of shares for land would be reported as
a. Exchanges are not reported on the c. non-cash investing and financing activities
statement of cash flows
b. financing activities d. investing activities
____ 51. Which of the following should be disclosed in a Summary of Significant Accounting Policies?
a. Types of executory contracts c. Claims of equity holders
b. The amount for the cumulative effect of d. Depreciation method followed
change in the accounting principle
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____ 52. An example of an inventory accounting policy that should be disclosed in a Summary of Significant
Accounting Policies is the
a. amount of income resulting from the c. the method used for pricing inventory
involuntary liquidation of LIFO
b. major backlogs of inventory orders d. composition of inventory into raw
materials, work-in-process, and finished
goods
____ 53. The full disclosure principle, as adopted by the accounting profession, is best described by which of the
following?
a. All information related to an entity's c. Enough information should be disclosed
business and operating objectives are in the financial statements so a person
required to be disclosed in the financial wishing to invest in the stock of the
statements company can make a profitable decision
b. Information about each account balance d. Disclosure of any financial facts
appearing in the financial statements is to significant enough to influence the
be included in the notes to the financial judgment of an informed reader
statements
____ 54. If a business entity entered into certain related party transactions, it would be required to disclose all of the
following information except the
a. nature of the relationship between the c. the dollar amount of the transactions for
parties to the transactions each of the periods for which an income
statement is presented
b. nature of any future transactions planned d. due from or to related parties as of the
between the parties and the terms involved date of each balance sheet presented
____ 55. Which of the following off-balance-sheet events would generally require disclosure but no adjustment of the
financial statements?
a. Retirement of the company president c. Employee strikes
b. Settlement of litigation when the event d. Issue of a large amount of capital stock
that gave rise to the litigation occurred
before the balance sheet date
____ 56. Which of the following subsequent events (off-balance-sheet events) would require adjusting the accounts
before issuing the financial statements?
a. Loss of plant as a result of fire c. Loss on an uncollectible account
receivable resulting from a customer’s
major flood loss
b. Changes in the quoted market prices of d. Loss on a lawsuit, the outcome of which
securities held as an investment was deemed uncertain at year-end
____ 57. The MD&A section of a company's annual report is to cover the following three items:
a. income statement, balance sheet, and c. liquidity, capital resources, and results of
statement of owners' equity operations
b. income statement, balance sheet, and d. changes in the stock price, mergers, and
statement of cash flows acquisitions
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____ 58. Which of the following best characterizes the difference between a financial forecast and a financial
projection?
a. Forecasts include a complete set of c. A forecast attempts to provide information
financial statements, while projections on what is expected to happen, whereas a
include only summary financial data projection may provide information on
what is not necessarily expected to happen
b. A forecast is normally for a full year or d. A forecast includes data that can be
more, and a projection presents data for verified about future expectations, while
less than a year the data in a projection is not susceptible
to verification
____ 59. A financial forecast per professional pronouncements presents to the best of the responsible party's knowledge
and belief
a. an entity's expected financial position, c. given one or more hypothetical
results of operations, and cash flows assumptions, an entity's expected financial
position, results of operations, and cash
flows
b. an assessment of the company's ability to d. an assessment of the company's ability to
be successful in the future be successful in the future under many
different assumptions
____ 60. Disclosures of accounting policies include
a. Leases-operating lease and finance lease c. Composition of property, plant, and
method equipment
b. Equity capital is analyzed as paid-in d. Classification of inventories such as
capital, additional paid-in capital, and merchandise, production supplies,
reserves materials, work in process, and finished
goods
____ 61. Which of the following statements about financial statements is incorrect?
a. They show the results of the stewardship c. They are prepared at least annually and
of management for the resources entrusted are directed to the common information
to it by the capital providers needs of a wide range of statement users
b. They are the primary responsibility of d. They provide information about the
both management and the external auditor financial position, performance, and cash
after an audit flows of an enterprise that is useful to a
wide range of users in making economic
decisions
____ 62. According to PAS 1 - Presentation of Financial Statements, which of the following is not among the criteria
in classifying a liability as current?
a. Expected to be settled in the entity’s c. The entity has an unconditional right to
normal operating cycle defer settlement of the liability for at least
twelve months after the balance sheet date
b. Due to being settled within twelve months d. It is held primarily to be traded
after the balance sheet date
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____ 63. Errors and irregularities are defined as intentional distortions of facts.
a. Errors (Yes); Irregularities (Yes) c. Errors (No); Irregularities (Yes)
b. Errors (Yes); Irregularities (No) d. Errors (No); Irregularities (No)
____ 64. A concept that states that all the components of a complete set of financial statements are interrelated
a. Entity c. Concept of Articulation
b. Accounting Process d. Principle of Fair Presentation
____ 65. The preparation of adjusting entries
a. is easy because they are simply copied c. typically precedes the preparation of the
from the worksheet worksheet
b. typically precedes the preparation of the d. is difficult, and therefore they must first be
financial statements entered into the general journal in pencil
____ 66. XYZ Company needed a new warehouse, and a contractor quoted a P5,000,000 price to construct it. XYZ
believed it could build the warehouse for P4,300,000 and decided to use company employees to build it. The
final construction cost incurred by XYZ was P4,800,000, but the asset was recorded at P5,000,000. What
principle is this a violation of?
a. Cost Principle c. Matching Principle
b. Separate Entity d. Full disclosure
____ 67. If no adjustments are needed for a particular company, its
a. the post-closing trial balance will be c. the trial balance will be identical to its
identical to its trial balance adjusted trial balance
b. the adjusted trial balance will be identical d. trial balance, adjusted trial balance, and
to its post-closing trial balance the post-closing trial balance will be
identical
____ 68. The professional regulatory board created under R.A. 9298 is tasked with the supervision of the registration,
licensure, and practice of accountancy in the Philippines
a. PRC c. PICPA
b. BOA d. FRSC
____ 69. An important purpose of closing entries is to
a. transfer the net income or loss to the c. update the nominal accounts at year-end
owner’s capital account
b. set permanent account balances to zero to d. help achieve the goals of the matching
begin the next period principle
____ 70. Under what circumstances will the last two columns be in balance on the worksheet after the initial footing?
a. under no circumstances c. when net income is zero
b. under all circumstances, assuming no d. when no adjustments have been entered on
arithmetical errors have been made the worksheet
____ 71. A subsidiary ledger is
a. A listing of the components of account c. A listing of account balances just before
balances closing entries are prepared
b. A listing of accounts of a subsidiary d. A backup system to protect against record
destruction
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____ 72. At the end of 2013, Jed Company made four adjusting entries for the following items:

1 Depreciation expense, P25,000

2 Expired insurance, P2,200 (originally recorded as prepaid insurance.)
3 Interest payable, P6,000
4 Rental revenue receivable, P10,000.

In the normal situation, to facilitate subsequent entries, the adjusting entry or entries that may be reversed is
(are)
a. Entry No. 3 c. Entry No. 3 and No. 4
b. Entry No. 4 d. Entry No. 2, No. 3, and No. 4
____ 73. Compared to the accrual basis of accounting, the cash basis of accounting overstates income by the net
increase during the accounting period of the
a. Accounts Receivable (No); Accrued c. Accounts Receivable (Yes); Accrued
Expenses Payable (No) Expenses Payable (No)
b. Accounts Receivable (No); Accrued d. Accounts Receivable (Yes); Accrued
Expenses Payable (Yes) Expenses Payable (Yes)
____ 74. Which of the following statements is not correct about the voucher system?
a. Even if the voucher system is time- c. The voucher system is recommended for
consuming, repetitive, and costly, it is installment transactions
recommended for use because it offers
better internal control than the non-
voucher system
b. Purchases are recorded in the voucher d. When installments or other partial
register at gross by debiting purchases and payments are made on an invoice, a
crediting vouchers payable separate voucher is prepared for the
amount of each check issued
____ 75. The concept of verifiability is complied with when an accounting transaction occurs that
a. Involves an arms-length transaction c. It is promptly recorded in a fixed amount
between two independent interests of pesos
b. Furthers the objectives of the company d. Allocates revenues or expense items in a
rational and systematic manner
____ 76. The objective of tests of details of transactions performed as tests of controls is to
a. Monitor the design and use of entity c. Detect material misstatements in the
documents such as prenumbered shipping account balances of the financial
forms statements
b. Determine whether internal control d. Evaluate whether internal control structure
structure policies and procedures have procedures operated effectively
been placed in operation
____ 77. The last step in the accounting cycle is to
a. Prepare a post-closing trial balance c. Journalize and post adjusting entries
b. Prepare financial statements d. Journalize and post-closing entries
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____ 78. The purchase of equipment on account

a. Will decrease equity c. Will decrease assets and decrease liability
b. Will increase assets and increase a liability d. Will increase equity
____ 79. The left side of an account is
a. blank c. the debit side
b. a description of the account d. the balance of the account
____ 80. Which one of the following is not a part of an account?
a. Credit side c. Debit side
b. Trial balance d. Title
____ 81. The right side of an account
a. is the correct side c. shows all the balances of the accounts in
the system
b. reflects all transactions for the accounting d. is the credit side
period
____ 82. The normal balance of any account is the
a. left side c. a side that increases that account.
b. right side d. a side which decreases that account
____ 83. In recording an accounting transaction in a double-entry system
a. the number of debit accounts must equal c. the amount of the debits must equal the
the number of credit accounts amount of the credits
b. there must always be entries made on both d. there must only be two accounts affected
sides of the accounting equation by any transaction
____ 84. For the basic accounting equation to stay in balance, each transaction recorded must
a. affect two or less accounts c. always affect exactly two accounts
b. affect two or more accounts d. affect the same number of asset and
liability accounts
____ 85. Assets normally show
a. credit balances c. debit and credit balances
b. debit balances d. debit or credit balances
____ 86. When an owner makes a withdrawal
a. it doesn't have to be cash. It could be c. the capital account will be directly
another asset increased with a debit
b. the drawing account will be increased with d. the drawing account will be decreased
a credit with a debit
____ 87. In recording business transactions, evidence that an accounting transaction has taken place is obtained from
a. business documents c. the public relations department
b. the Internal Revenue Service d. the SEC
____ 88. Evidence that would not help with determining the effects of a transaction on the accounts would be
a. a cash register sales tape c. an advertising brochure
b. a bill d. a check
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____ 89. The final step in the recording process is to transfer the journal information to the
a. trial balance. c. ledger.
b. financial statements. d. file cabinets.
____ 90. A journal provides
a. the balances for each account c. a list of all accounts used in the business
b. information about a transaction in several d. a chronological record of transactions
different places
____ 91. The standard format of a journal would not include
a. a reference column c. a T-account
b. an account title column d. a date column
____ 92. The name given to entering transaction data in the journal is
a. chronicling c. posting
b. listing d. journalizing
____ 93. A three-column form of account is so named because it has columns for
a. debit, credit, and account name c. debit, credit, and balance
b. debit, credit, and reference d. debit, credit, and date
____ 94. The procedure of transferring journal entries to the ledger accounts is called
a. journalizing c. reporting
b. analyzing d. posting
____ 95. A chart of accounts for a business firm
a. is a graph c. lists the accounts and account numbers
that identify their location in the ledger
b. indicates the amount of profit or loss for d. shows the balance of each account in the
the period general ledger
____ 96. A list of accounts and their balances at a given time is called
a. a journal c. a trial balance
b. a posting d. an income statement
____ 97. If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates
a. no errors have been made c. that all accounts reflect correct balances
b. no errors can be discovered d. the mathematical equality of the
accounting equation
____ 98. Which of the following rules is incorrect?
a. Credits decrease the drawing account c. Credits increase revenue accounts
b. Debits increase the capital account d. Debits decrease liability accounts
____ 99. James Company purchases equipment for P900 and supplies for P300 from Rudnicky Co. for P1,200 cash.
The entry for this transaction will include a
a. debit to Equipment P900 and a debit to c. credit to Accounts Payable for James
Supplies Expense P300 for Rudnicky
b. credit to Cash for Rudnicky d. debit to Equipment P900 and a debit to
Supplies P300 for James
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____ 100. On October 3, Jane, a carpenter, received a cash payment for services previously billed to a client. Mike paid
his telephone bill, and he also bought equipment on credit. For the three transactions, at least one of the
entries will include a
a. credit to Jane, Capital c. debit to Accounts Receivable
b. credit to Notes Payable d. credit to Accounts Payable
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Financial Accounting and Reporting Practice Questions

Answer Section

MULTIPLE CHOICE

1. D
2. D
3. B
4. A
5. A
6. A
7. B
8. A
9. A
10. C
11. A
12. D
13. B
14. C
15. C
16. C
17. B
18. D
19. D
20. C
21. B
22. B
23. B
24. D
25. C
26. C
27. B
28. B
29. C
30. B
31. C
32. C
33. A
34. A
35. B
36. C
37. C
38. B
39. D
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40. A
41. D
42. D
43. B
44. C
45. B
46. A
47. A
48. D
49. D
50. C
51. D
52. C
53. D
54. B
55. D
56. D
57. C
58. C
59. A
60. A
61. B
62. C
63. C
64. C
65. A
66. A
67. C
68. B
69. A
70. C
71. A
72. C
73. B
74. C
75. A
76. D
77. A
78. B
79. C
80. B
81. D
82. C
83. C
 17

84. B
85. B
86. A
87. A
88. C
89. C
90. D
91. C
92. D
93. C
94. D
95. C
96. C
97. D
98. B
99. D
100. D