Question

of this journal entry is to by an accrued expense (c) a an unexpired cost. expense 7. interest payable. The purpose O- record (a) a deferred expense (b) an contingent liability (d) an unexp2 As generally used, the term "net ass (a) retained earnings of a corpo less current liabilities (e) assets less total liabilities (e) none ng to the conceptual framework, "confirmatory value a characteristic of understandability a (b) representation faithful elevance (a) both relevance and faithful representation. Sed, the term "het assets" represents earnings of a corporation (b) current assets ant liabilities working capital (d) total el none of the above. is 8 . (c) Realization is the gods produ ess of earning revenue as economic utility is added to Produced (b) recording of revenues in the accounting records (c) matching favnens curred in earning revenues Of the period to those revenues al conversion of non-casni resources or rights into cash or rights to cash. 10. Sinking funds, to be used for construction in 5 years is part (a) Current Asset (b) Long-term Investment (c) PPE (d) Intangible Asset (e) none of the above 11. ABC Corporation records business transactions in dollars and disregards changes in the value of a dollar over time. Which of the following accounting assumptions does this represent? (a) economic entity assumption (b) going concern assumption (c) accounting period assumption (d) monetary unit assumption. 12. Which of the following is not a temporary account? (a) dividends distributed (b) goodwill (c) Cost of Goods Sold (d) depreciation expense (e) dividend revenue. 13. All of the following items would appear on the balance sheet except: ta) a patent obtained on a new manufacturing process (b) m ated depreciation c an investment in two-vear certificates of deposit of deposit (d) Curren (a current portion of the long-term debt (e) sales discount. $ of deposita, le) ananufacturi 14. "Dividends (distributed)" can be fo (a) Income Statement (b) Statem (c) Balance Sheet (d) Statement Statement of Shareholders' Equity ributed)" can be found in? atement (b) statement of Comprehensive Income d) Statement of Financial Position (e) 15. The correct order of the following is: (a) Posting closing steps of the accounting cycle adjustin 9. reversing; adjusting, posting, reversing (c) (b) closing. reversing; (d) Posting, reversing, adiuding adjusting, closing, Justing. closing.

Answer 1

Q. 7

Net Assets = Total Assets - Total liability hence answer is (d),

net assets means the value of a company's assets minus its liabilities.

Q.8

Right answer is C Relevance, because Relevance requires financial information to be related to economic decision. Otherwise, the information is useless.

Financial information is useful if it has predictive value and confirmatory value. Predictive value helps users in predicting or anticipating future outcomes. Confirmatory value enables users to check and confirm earlier predictions or evaluations.

Q.9

The right answer is D, in accounting terms realization means conversion of non cash resources or right into cash or right to cash.

Q.10

The right answer is C, PPE i.e. Property Plant equipment as the sinking fund purpose is for construction.

Q. 11

The right answer is D, Monetary unit assumptions. The Monetary unit assumptions states that transactions and events must be able to be measured in some type of monetary unit in order to be recorded. The monetary units assumed to be stable.

Q. 12

The right answer is B, Goodwill. goodwill is not a temporary account. temporary accounts are those the balance of which are closed at each year end and are not carried forward to next period. since the balance goodwill is carried to next accounting period it is not a temporary account instead goodwill is an intangible real accounts because goodwill is an intangible asset.

Q.13

The right answer is E, Sales discount. all other accounts are real or personal accounts which are reflected on balance sheet but sales discount is a nominal or temporary account which balance becomes Nil once it is transferred to Income statement or profit and loss account.

Q. 14

The right answer is E, statement of shareholders equity as subtraction from retained earnings. Dividends on common stock are not reported on the income statement since they are not expenses.

Q. 15

answer is "C"

After identification and measurement of items to be recorded, the steps in the accounting cycle are, in order, (1) journalizing transactions, (2) posting journal entries to the ledgers, (3) preparing an unadjusted trial balance, (4) recording adjusting entries, (5) preparing an adjusted trial balance, (6) preparing financial statements, (7) closing temporary (nominal) accounts, and (8) reversing the accrual entries (optional)