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Unformatted text preview: 1. (TCO 1) Which of the following is the most appropriate and modern definition of accounting? (Points: 4) The information system that identifies, records, and communicates the economic events of an organization to interested users A means of collecting information The interconnected network of subsystems necessary to operate a business Electronic collection, organization, and communication of vast amounts of information 2. (TCO 1) Which of the following groups uses accounting information to determine whether the company can pay its obligations (Points: 4) Investors in common stock Marketing managers Creditors Chief Financial Officer 3. (TCO 2) If total liabilities decreased by $14,000 during a period of time and stockholders equity increased by $6,000 during the same period, then the amount and direction (increase or decrease) of the periods change in total assets is a(n)? (Points: 4) $14,000 increase. $20,000 increase $8,000 decrease. $8,000 increase 4. (TCO 2) Johnnys Detailing Shop started the year with total assets of $60,000 and total liabilities of $40,000. During the year the business recorded $105,000 in revenues, $55,000 in expenses, and dividends of $10,000. Stockholders equity at the end of the year was: (Points: 4) $60,000 $50,000 $45,000 $40,000 5. (TCO 2) Johnnys Detailing Shop started the year with total assets of $60,000 and total liabilities of $40,000. During the year the business recorded $105,000 in Jrevenues, $55,000 in expenses, and dividends of $10,000. The net income reported by Johnnys Detailing Shop for the year was: (Points: 4) $40,000 $50,000 $30,000 $95,000 6. (TCO 2) Selecting the method or procedure that yields less net income is an application of.... (Points: 4) consistency conservativism full disclosure materiality 7. (TCO 2) If expenses are paid in cash, then (Points: 4) assets will increase liabilities will increase stockholders' equity will increase assets will decrease 8. (TCO 2) The sale of an asset on credit for what it cost (Points: 4) increases assets and liabilities decreases assets and liabilities leaves total assets unchanged increases assets and decreases liabilities 9. (TCO 2) A paid dividend.... (Points: 4) decreases assets and stockholders' equity increases assets and stockholders' equity increases assets and decreases stockholders' equity decreases assets and stockholders' equity 10. (TCO 3) Two individuals work at the same cash register at a retail store. You view this as (Points: 4) A violation of the establishment of responsibility A violation of the separation of duties supporting the establishment of responsibility supporting internal independent verification 11. (TCO 3) An accounts payable clerk also has access to the approved supplier master file for purchases. The control principle of (Points: 4) establishment of responsibility is violated....
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- Spring '10