ACC 100 Unit 1 Milestone Sophia course

1

Which of the following account groups has a natural debit balance?

 

Revenue

 

Liabilities

 

Equity

 

Assets

 

Natural Balance

2

Which one of the following statements is true regarding permanent accounts?

 

They document resources for longer than one fiscal timeframe.

 

They track specific assets during an exact fiscal timeframe.

 

They are associated with financial transactions for the life of the company.

 

They are associated with one product for the life of the product.

 

Account Groups

3

Eric owns a heating and cooling company. He routinely inspects a food storage warehouse. Eric is paid a future expense of $299 for replacing a worn belt the next time he inspects the warehouse.

 

Which of the following correctly shows Eric's entry for this transaction?

 

 

 

 

 

Journal Entries

4

Accounting has its roots in the 15th century, when which of the following groups of people used the double entry accounting system?

 

Turkish craftsmen

 

Italian merchants

 

Chinese traders

 

Greek fishermen

 

Origins and Ethics

5

Transferring $12,000 in revenue and $8,000 in expenses into equity would be performed during which phase of the accounting cycle?

 

Report

 

Close

 

Journalize

 

Adjust

 

Accounting Cycle Summary

6

The bookkeeper for Dr. Mark Scholz, DVM, informed the veterinarian that the business' revenue for the day was $18,920.

 

Which statement below best describes how the bookkeeper would record this? 

 

$18,920 would be recorded on the debit side of the purchases account.

 

$18,920 would be recorded on the debit side of the owner's equity account.

 

$18,920 would be recorded on the credit side of the cash account.

 

$18,920 would be recorded on the credit side of the revenue account.

 

Debit and Credit

7

Which image below shows the correct general ledger account for Accounts Receivable?

 

 

 

 

 

 

Posting to the General Ledger

8

An auditor's role is which of the following?

 

To document all of a company's monetary transactions 

 

To assist a company's management team with decision-making

 

To objectively analyze a company's accounting data

 

To report a company's financial standing to external sources

 

Accounting in Practice

9

A business owner who wants to make adjustments to her company's production would make use of which of the following?

 

Inventory accounting

 

Managerial accounting

 

Financial accounting

 

Production accounting

 

Accounting in Practice

10

Which of the following is true of an LLC?

 

An LLC itself pays no taxes. 

 

All members of the LLC are liable for the actions of the others.

 

An LLC is required to have more than five members.

 

An LLC is terminated at any member's choice.

 

Businesses and Organizations

11

Which of the following is a responsibility of the FASB?

 

Developing and controlling the U.S. GAAP.

 

Developing rules for security laws

 

Overseeing publicly-traded companies

 

Investigating the use of public funds

 

Governance

12

Which of the following is NOT a good use of a T-account?

 

Transferring final balances of accounts to the company's financial records

 

Prior to recording an entry, to see the effect of the debits and credits on each account

 

To make sure the debits and credits in each transaction are equal

 

Analyzing a complicated transaction, prior to recording the event in the general journal

 

T-Accounts, Cash Entries

13

Which of the following is a major advantage to forming a corporation?

 

A corporation is usually managed by its owners.

 

The income from a corporation is not taxed.

 

Lenders of a corporation do not have the right to claim the corporation's assets to pay its debts.

 

Stockholders have limited liability for the debts of the corporation.

 

Businesses and Organizations

14

Which description below is a characteristic of journal entries?

 

Changes are verified by at least two qualified individuals.

 

Changes are made when there is a planned expense.

 

Changes are associated with at least two different accounts.

 

Changes are recorded with either a debit or a credit, but not both.

 

General Journal and General Ledger

15

Which of the following organizations might Daniel be interested in joining if he recently passed his certified public accountancy exams?

 

IRS

 

AICPA

 

GAO

 

FASB

 

Governance

16

The actions of employees at Enron and Worldcom demonstrate that accounting is vulnerable to which of the the following kinds of behavior?

 

Controlling

 

Strategic

 

Unethical

 

Resourceful

 

Origins and Ethics

17

Money borrowed from a bank to purchase new machinery would be considered which of the following?

 

Equity

 

Revenue

 

Assets

 

Liabilities

 

Account Groups

1

Which of the following is NOT a permanent account?

 

Assets

 

 

Revenue

 

 

Liabilities

 

 

Equity

 

 

Account Groups

2

The ____________ provides a numerical label for each account, so that activity can easily be tracked for a given account.

 

Chart of Accounts

 

 

Double-Entry Accounting

 

 

Book-Entry

 

 

Accounting Model

 

 

General Journal and General Ledger

3

The statues and garden decorations in the warehouse belonging to Woodman’s Flowers and Gifts are considered which of the following?

 

Assets

 

 

Expenses

 

 

Equity

 

 

Profits

 

 

Account Groups

4

Which of the following statements is true about GAAP?

 

GAAP refers to the international accounting rules that U.S. companies must follow for their international operations.

 

 

GAAP was created to educate the public about how to invest in U.S. securities markets.

 

 

GAAP contains the procedures, standards and rules for accounting information in the U.S.

 

 

As long as a publicly-traded U.S. company uses GAAP, they are not required to report to the Securities and Exchange Commission.

 

 

Governance

5

Brian discussing the financial position of his company with Mike, who is interested in acquiring Brian's company, is an example of which of the following?

 

Managerial accounting

 

 

Investment accounting

 

 

External accounting

 

 

Financial accounting

 

 

Accounting in Practice

6

The actions of employees at Enron and Worldcom demonstrate that accounting is vulnerable to which of the the following kinds of behavior?

 

Resourceful

 

 

Strategic

 

 

Controlling

 

 

Unethical

 

 

Origins and Ethics

7

An auditor's role is which of the following?

 

To report a company's financial standing to external sources

 

 

To assist a company's management team with decision-making

 

 

To objectively analyze a company's accounting data

 

 

To document all of a company's monetary transactions 

 

 

Accounting in Practice

8

Which image below correctly shows a general ledger?

 

 

 

 

 

Posting to the General Ledger

9

Which of the following accounts would Carlo credit when a customer who bought three dozen pastries and muffins from his bakery paid $55 in cash?

 

Asset

 

 

Equity

 

 

Expense

 

 

Revenue 

 

 

T-Accounts, Cash Entries

10

Who is credited with documenting the double-entry accounting system?

 

Luca Pacioli

 

 

Arlo Gian

 

 

Marco Lorenzo

 

 

Rocca Giovanni

 

 

Origins and Ethics

11

Transferring $12,000 in revenue and $8,000 in expenses into equity would be performed during which phase of the accounting cycle?

 

Adjust

 

 

Close

 

 

Journalize

 

 

Report

 

 

Accounting Cycle Summary

12

If Tom earned $1,890 in revenue from selling running shoes at last weekend's triathlon expo.

 

Where would this accounting event be recorded?

 

$1,890 would be marked on the credit side of the revenue account.

 

 

$1,890 would be marked on the debit side of the revenue account.

 

 

$1,890 would be marked on the credit side of the accounts payable.

 

 

$1,890 would be marked on the debit side of the accounts payable.

 

 

Debit and Credit

13

Which of the following is NOT true of a natural balance?

 

Each account is associated with only one account group.

 

 

Each individual account has a natural balance.

 

 

An account increase occurs on the opposite side of the account's natural balance.

 

 

Each account group has a natural balance.

 

 

Natural Balance

14

Which of the following correctly describes the difference between an LLP and an LLC?

 

Partners of an LLC are NOT allowed to purchase a company's stock shares, while partners of an LLP are allowed to purchase a company's stock shares.

 

 

Partners of an LLC are legally treated the same as a business, while partners of an LLP bear no legal responsibility.

 

 

Partners of an LLC exist separately from owners and shareholders, while partners of an LLP are held accountable for the actions of the other partners.

 

 

Partners of an LLC are NOT responsible for liabilities, while partners of an LLP are responsible for their investment amount.

 

 

Businesses and Organizations

15

Which illustration below correctly shows Paula opening her baby clothing store with a monetary investment of $9,250.00?

 

 

 

 

 

Journal Entries

16

Which of the following best describes a non-profit organization?

 

One that relies solely on private donations for the organization’s financial needs

 

 

One in which the leadership is governed by a board of directors

 

 

One in which the workforce is made up of volunteers

 

 

One that reinvests profit into the organization instead of distributing it to owners

 

 

Businesses and Organizations

17

Which of the following is responsible for the creation and governance of accounting standards in the United States?

 

Sarbanes-Oxley Act

 

 

Financial Standards Accounting Board (FASB)

 

 

Securities and Exchange Commission (SEC)

 

 

Generally Accepted Accounting Principles (GAAP)

 

 

Governance

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