1.
Unearned income is not a liability.
A) True
B) False
2.
Deferred expenses are assets.
A) True
B) False
3.
By definition, accrued revenue is unearned.
A) True
B) False
4.
Accrued expenses have not been paid.
A) True
B) False
5.
Deferred income is unearned.
A) True
B) False
6.
Deferred expenses are prepaid.
A) True
B) False
7.
Prepaid expense and unearned income accounts are assets.
A) True
B) False
8.
Accrued expenses are liabilities.
A) True
B) False
9.
All else being equal, overstating deferred revenue would oversate capital.
A) True
B) False
10.
All else being equal, understating deferred expenses would overstate net income.
A) True
B) False
11.
Taxes you owe would be recorded as a deferred expense.
A) True
B) False
12. Rent paid to you in advance would be recorded as deferred revenue.A) True
B) False
13.
Rent paid by you in advance would be reorded as an accrued expense.
A) True
B) False
14.
Recording accrued revenue would require a debit to cash.
A) True
B) False
15.
Recording an accrued expense would require crediting a liability account.
A) True
B) False
16.
Unemployment insurance is a payroll tax.
A) True
B) False
17.
Social security is a payroll tax and a payroll deduction.
A) True
B) False
18.
Payroll deductions are withheld from employees' gross pay.
A) True
B) False
19. Income tax is a payroll deduction.A) True
B) False
20.
Analysis of Kornett Company's post closing trial balance on page 547 indicates Kornett's employees earned $157,000 in gross pay as of December 31, 2016.
A) True
B) False
21.
Analysis of Kornett's post closing trial balance also indciates Kornett owed $70,490 in payroll tax at year end.
A) True
B) False
22.
There are $70,180 in payroll deductions listed on Kornett's post closing trial balance.
A) True
B) False
23.
When journalizing the formation of a partnership, assets must be recorded at cost.
A) True
B) False
24.
The net asset value of a partnership is equal to its revenue minus its expenses.
A) True
B) False
25.
Partnerships pay no income tax.
A) True
B) False
26.
Partners J, K, and L agree to share profit and loss in a 5:2:1 ratio respectively. If the partnership earned $4 million in net income, K would be paid $1 million.
A) True
B) False
27.
When partnerships dissolve, all non-cash assets are sold and debts are paid.
A) True
B) False
28.
GAAP requires the purchase of interest method be used to acccount for the admission of a new partner.
A) True
B) False
29.
During liquidation, a loss on realization will create a capital deficiency.
A) True
B) False
30.
Partners do not always have to agree on how to divide profit or loss.
A) True
B) False
31.
In Exhibit 7 on page 569 cash was distributed to Farley, Greene, and Hall according to terms of their proft sharing agreement.
A) True
B) False
32.
Analysis of Exibit 8 on page 571 indicates a profit sharing ratio of 1:2.
A) True
B) False
33.
When corporations sell stock at a price above above par value, the stock is sold at a premium.
A) True
B) False
34. To close a dividend account at year end would require a debit to retained earnings.A) True
B) False
35.
According to GAAP, corporations should report treasury stock as an asset.
A) True
B) False
36.
In problem 13-4B on page 634, Nav-Go Enterprises would credit common stock for $1.6 million on April 13.
A) True
B) False
37.
Analysis of problem 13-4B indicates Nav-Go paid $6.75 a share for the treasury stock shown on its balance sheet as of January 1, 2016.
A) True
B) False
38.
Analysis of Exhibit 12 on page 820 indicates Jones Corporation earned $3.45 per share from continuing operations.
A) True
B) False
39.
Analysis of Exhibit 12 also indicates Jones had an extraordiary loss of $.50 per share.
A) True
B) False
40.
Based on class discussion of the Rodgers Industries case, Rodgers should get a "clean" opinion from its auditor.
A) True
B) False
41.
Analysis of Rainbow Paint Co.'s financial statements starting on page 823 indicates Rainbow collected its receivalbes (AR), on average, in under 30 days in 2016
A) True
B) False
42.
Analysis of Rainbow's financial statements also indicates Rainbow sold its products (inventory), on average, in less than 90 days in 2016.
A) True
B) False
43.
Period costs are reported as expenses when incurred.
A) True
B) False
44.
Product costs include direct labor, direct material, and factory overhead.
A) True
B) False
45.
Direct material and direct labor are conversion costs.
A) True
B) False
46.
A large retailer, like Wal Mart for example, would be more likely to use a job order cost accounting system than a process cost accounting system
A) True
B) False
47.
Accuracy is a specific component of the IMA's guidelines for professional behavior.
A) True
B) False
48.
The IMA estimates that most accountants do not work for CPA firms.
A) True
B) False
49.
Questions on the CMA exam focuses primarily on auditing and taxation.
A) True
B) False
50.
A manufacturer has 10,000 units of product in finished goods and 5,000 units of product in work in process. If the work in process is 30% complete, there would be 11,500 equivalent units of product.
A) True
B) False