ACG 3100 1.Which of the following is NOT normally an objective of


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Hello,please help me with the practice set attached. ACG3100.doc ACG 3100 1.Which of the following is NOT normally an objective of financial reporting? a. To provide information about an entity’s assets and claims against those assets b. To provide information that is useful in assessing an entity’s sources and uses of cash c. To provide information that is useful in lending and investing decisions d. To provide information about an entity’s liquidation value 2.As independent (or external) auditors, CPAs are primarily responsible for a. preparing financial statements in conformity with GAAP. b. certifying the accuracy of financial statements. c. expressing an opinion as to the fairness of financial statements. d. filing financial statements with the SEC. 3.The assumed continuation of a business entity in the absence of evidence to the contrary is an example of the accounting concept of a. accrual. b. consistency. c. comparability. d. going concern. 4.According to the FASB’s conceptual framework, the process of reporting an item in the financial statements of an entity is a. realization. b. recognition. c. matching. d. allocation. 5.Generally accepted accounting principles a. are accounting adaptations based on the laws of economic science. b. derive their credibility and authority from legal rulings and court precedents. c. derive their credibility and authority from the federal government through the financial reporting section of the SEC. d. derive their credibility and authority from general recognition and acceptance by the accounting profession. 6.On June 30, a company paid $3,600 for insurance premiums for the current year and debited the amount to Prepaid Insurance. At December 31, the bookkeeper forgot to record the amount expired. The omission has the following effect on the financial statements prepared December 31: a. overstates owners’ equity. b. overstates assets. c. understates net income. d. overstates both owners’ equity and assets. 7.Which of the following criteria must be met before an event should be recorded for accounting purposes? a. The event must be an arm’s-length transaction. b. The event must be repeatable in a future period. c. The event must be measurable in financial terms. d. The event must be disclosed in the reported footnotes. 8.Adjusting entries normally involve a. real accounts only. b. nominal accounts only. c. real and nominal accounts. d. liability accounts only. 9.If an inventory account is understated at year end, the effect will be to overstate the a. net purchases. b. gross margin. c. cost of goods available for sale. d. cost of goods sold. 10.Beginning and ending Accounts Receivable balances were $28,000 and $24,000, respectively. If collections from clients during the period were $80,000, then total services rendered on account were apparently a. $76,000. b. $84,000. c. $104,000. d. $108,000. 11.The following balances have been excerpted from Edwards’ balance sheets: Prepaid Insurance ………… Interest Receivable ………. Salaries Payable …………. December 31, 2013 $ 6,000 3,700 61,500 December 31, 2012 $ 7,500 14,500 53,000 Edwards Company paid or collected during 2013 the following items: Insurance premiums paid …… Interest collected ……….. Salaries paid ……………. $ 41,500 123,500 481,000 The interest revenue on the income statement for 2013 was a. $90,500. b. $112,700. c. $117,500. d. $156,500. 12.Comet Corporation’s liability account balances at June 30, 2013, included a 10 percent note payable. The note is dated October 1, 2011, and carried an original principal amount of $600,000. The note is payable in three equal annual payments of $200,000 plus interest. The first interest and principal payment was made on October 1, 2012. In Comet’s June 30, 2013, balance sheet, what amount should be reported as Interest Payable for this note? a. $10,000 b. $15,000 c. $30,000 d. $45,000 13.The correct order to present curren

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