10. Which of the following statements best describes the relationship of U.S. GAAP and IFRS? (Points : 2)
They are identical
They are entirely different conceptual frameworks
They are similar but not identical
Neither has anything to do with accounting
They both relate only to publicly traded companies
11. Generally Accepted Accounting Principles: (Points : 2)
Focus on the review of a situation
Does not require financial statements
Never change
Intend to make information on the financial statements relevant, reliable and comparable
Oversees Security and Exchange Commission
12. Apatha Company has assets of $600,000, liabilities of $250,000 and equity of $350,000. It buys office equipment on credit for $75,000. The effects of this transaction include: (Points : 2)
Assets increase by $75,000 and expenses increase by $75,000
Assets increase by $75,000 and expenses decrease by $75,000
Liabilities increase by $75,000 and expenses decrease by $75,000
Assets decrease by $75,000 and expenses decrease by $75,000
Assets increase by $75,000 and liabilities increase by $75,000
13. Fast-Forward had cash inflows from operations of $62,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000. The net change in cash was: (Points : 2)
$40,500 increase
$40,500 decrease
$134,500 decrease
$134,000 increase
14. A company has twice as much owner’s equity as it does liabilities. If total liabilities are $50,000, what amounts of assets are owned by the company? (Points : 2)
$50,000
$100,000
$150,000
$200,000
15. Which of the following elements are found on the Balance Sheet? (Points : 2)
Service Revenue
Net Income
Operating Activities
Utilities Expense
Retained Earnings
16. Ethical behavior requires: (Points : 2)
That an auditors’ pay not depend on the figures in the client’s reports
Auditors to invest in businesses they audit
Analysts to report information favorable to their companies
Managers to use accounting information to benefit themselves
That an auditor provides a favorable opinion
17. If Beginning Retained Earnings was $184,300, the company distributed $46,000 in dividends and Ending Retained Earnings was $345,000, what was the net income for the period? (Points : 2)
$154,700
$206,700
$114,700
$575,300
$160,700
18. An example of an operating activity is: (Points : 2)
Paying wages
Purchasing office equipment
Borrowing money from a bank
Selling stock
Paying off a loan
19. An asset created by prepayment of an expense is: (Points : 2)
Recorded as a debit to an unearned revenue account
Recorded as a debit to a prepaid expense account
Recorded as a credit to an unearned revenue account
Recorded as a credit to a prepaid expense account
Not recorded in the accounting records until the earnings process is complete
20. Which accounting assumption assumes that all accounting information is reported monthly or yearly? (Points : 2)
Business entity assumption
Monetary unit assumption
Value assumption
Cost assumption
Time period assumption
