Financial Accounting Example Final

Financial Accounting Example Final - Instructions:...

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Instructions: Designate the best answer for each of the following questions. __a__1. Which of the following is not an external user of accounting data? a. Company officers b. Regulatory agency c. Labor union d. Taxing authority ____ 2. Which of the following presents key aspects of the process of accounting in the correct chronological order? a. Totaling, auditing, and budgeting b. Budgeting, recording, and communicating c. Recording, totaling, and auditing d. Identifying, recording, and communicating ___b_3. The right side of an account is always a. the debit side. b. the credit side. c. the balance of that account. d. carried forward to the next accounting period. ___a_4. Transactions are initially recorded in the a. general ledger. b. trial balance. c. general journal. d. balance sheet. ____5. Logan Company debited Prepaid Insurance for $840 on July 1, 2008 for a one- year fire insurance policy. If the company prepares monthly financial statements, failure to make an adjusting entry on July 31 for the amount of insurance that has expired would cause a. assets to be overstated by $840 and expenses to be understated by $840. b. expenses to be overstated by $70 and assets to be understated by $70. c. assets to be overstated by $70 and expenses to be understated by $70. d. expenses to be overstated by $840 and assets to be understated by $840. ____ 6. The Accumulated Depreciation account is a(n) a. contra asset. b. liability. c. asset. d. operating expense. ____ 7. Which of the following statements is true? a. The price-earnings ratio is a long-term solvency ratio. b. High asset turnover is a sign of efficient use of assets. c.
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Financial Accounting Example Final - Instructions:...

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