1. Trend analysis is analysis a. of dollar changes and percentage changes over several years. b. in which all items are presented as a percentage of one selected item on a financial statement. c. in which a statistic is calculated for the relationship between two items on a single financial statement or for two items on different financial statements. d. of all ratios that increased or decreased over past accounting periods.
2. The operating cycle of a manufacturer is the length of time between the a. purchase of raw materials and the sale of the goods. b. sale of the goods and the collection of any outstanding receivables from the sale of the product c. purchase of raw materials and collection of any outstanding receivables from the sale of the product. d. purchase of raw materials and the production of goods.
3. Which of the following is the attribute used to measure many assets that are recognized on a balance sheet, because it is more objective and verifiable? a. Market value b. Historical cost c. Liquidation value d. Current replacement cost
4. Harvest Catering is a local catering service. Using accrual accounting, when should Harvest recognize revenue from its catering service? a. At the date the customer places the order b. At the date the meals are served c. At the date the invoice is mailed to the customer d. At the date the customer's payment is received
5. Expenses originate from a. Using an asset or recognizing liabilities b. Incurring liabilities or providing services to customers c. Collecting cash from customers d. Paying off liabilities
6. Which one of the following is an example of an accrued liability? a. Wages have been earned by employees, but have not been paid at the end of the period b. Equipment that will benefit several periods has been purchased c. An insurance policy that expires in a future period has been acquired d. Supplies are purchased and used over several months
7. The record in which transactions are initially recorded in chronological order as they occur is a(an): a. Account. b. General Journal. c. General Ledger. d. Chart of Accounts.
8. A list of all accounts and their balances which is used to prove the equality of debits and credits as of a specific date is a(an): a. Account. b. General Journal. c. Trial Balance. d. Chart of Accounts.