EXAM_1_Sample_questions

EXAM_1_Sample_questions - b. Accounts Receivable c. Note...

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1. Which one of the following organizations is currently responsible for the issuance of GAAP? a. AICPA b. IRS c. APB d. FASB 2. External users of financial accounting information include a. Management b. Employees c. Creditors d. Company officers 3. Changes in the purchasing power of the dollar are ignored in financial accounting under the a. Historical cost principle b. Economic entity concept c. Stable dollar assumption d. Full disclosure principle 4. Land that cost $50,000 ten years ago is worth $400,000 at December 31, 2006. In the company’s December 31, 2006 balance sheet, the land is reported at $400,000. Which underlying theory of accounting is violated? a. Materiality b. Consistency c. Full disclosure d. Historical cost 5. Which one of the following accounts is a current liability? a. Note Payable, due in 5 years b. Bonds Payable c. Prepaid Insurance d. Unearned Revenue 6. The account title used to indicate the company has loaned $10,000 to another company is a. Note Payable
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Unformatted text preview: b. Accounts Receivable c. Note Receivable d. Loan outstanding 7. Current assets are listed in a required order, called a. Maturity b. Liquidity c. Alphabetically d. Chronologically 8. The company paid its annual insurance premium of $1,200. The proper journal entry would be a. Prepaid Insurance 1200 Accounts Payable 1200 b. Insurance Expense 1200 Accounts Payable 1200 c. Cash 1200 Prepaid Insurance 1200 d. Prepaid Insurance 1200 Cash 1200 9. The company paid the remaining balance of its note payable. The proper journal entry would be a. Loan Expense Cash b. Note Payable Cash c. Cash Note Payable d. Note Payable Accounts Payable 10. A companys weekly payroll is $5,000 and payday is each Friday. If December 30, 2006 was a Monday, what is the Decmeber 31, 2006 Wages Payable balance? a. $5,000 b. $3,000 c. $2,000 d. $0 ANSWERS: 1. D 2. C 3. C 4. D 5. D 6. C 7. B 8. D 9. B 10. C...
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EXAM_1_Sample_questions - b. Accounts Receivable c. Note...

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