MC Review Questions Solutions

MC Review Questions Solutions - Accounting 100 Final Exam...

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Accounting 100 Final Exam Multiple Choice Review Sheet - Solutions Note: This is meant as practice in answering multiple choice questions. It is in no way indicative of what will be on the exam and does not provide comprehensive coverage of all material that may be tested. Chapter 1 1. Which of the following is not an advantage of the corporate form of business organization? a. No personal liability b. Easy to transfer ownership c. Favorable tax treatment d. Easy to raise funds 2. Which of the following statements is true? a. Publicly traded U.S. companies must provide an annual report to their shareholders when operating conditions change significantly. b. An unqualified independent auditor’s report must be included in the annual report. c. Notes to the financial statements do not need to be included in the annual report because that information is only for internal users. d. All of the statements are false. Chapter 2 3. If accounting information has relevance, it is useful in making predictions about a. future IRS audits. b. new accounting principles. c. foreign currency exchange rates. d. the future events of a company. 4. The concept that a business has a reasonable expectation of remaining in business for the foreseeable future is called the a. economic entity assumption. b. monetary unit assumption. c. periodicity assumption. d. going concern assumption. 5. Jackson Cement Corporation reported $35 million for sales when it only had $20 million of actual sales. Which of the following characteristics of useful information has Jackson most likely violated? a. comparability b. relevance c. faithful representation d. consistency Chapter 3 6. Which one of the following represents the expanded basic accounting equation?
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a. Assets = Liabilities + Common Stock + Dividends – Revenue – Expenses b. Assets + Dividends + Expenses = Liabilities + Common Stock + Revenues c. Assets – Liabilities – Dividends = Common Stock + Revenues – Expenses d. Assets = Revenues + Expenses – Liabilities Chapter 4 7. In a service-type business, revenue is considered earned: a. at the end of the month. b. at the end of the year. c. when the service is performed. d. when cash is received. 8. The primary difference between prepaid and accrued expenses is that prepaid expenses have: a. been incurred and accrued expenses have not. b. not been paid and accrued expenses have. c. been recorded and accrued expenses have not. d. not been recorded and accrued expenses have. 9. A law firm received $2,000 cash for legal services to be rendered in the future. The full amount was credited to the liability account Unearned Service Revenue. If the legal services have been rendered at the end of the accounting period and no adjusting entry is made, this would cause: a. expenses to be overstated. b.
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This note was uploaded on 02/02/2012 for the course ACCT 100 taught by Professor Punke during the Fall '08 term at Wisconsin.

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MC Review Questions Solutions - Accounting 100 Final Exam...

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