FIN621 Quiz # 1 Nov 2010

Question # 1 of 15 ( Start time: 03:29:51 PM ) Total Marks: 1
Which of the following is the next step after the preparation of trial balance?
Select correct option:

1. Adjusted trial balance
2. Financial statements
3. Adjusting entries (page#14)
4. Closing entries

Question # 2 of 15 ( Start time: 03:30:22 PM ) Total Marks: 1
Which of the following is the third step of accounting cycle?
Select correct option:

1. Preparing financial statements
2. Preparing trial balance
3. Posting (page#4)
4. Making adjusting entries

Question # 3 of 15 ( Start time: 03:30:47 PM ) Total Marks: 1
Mr. A purchases a piece of land for cash and debit made to machinery account. What would be
the effect of this error on the trial balance?
Select correct option:

1. Debit side would be decrease with the same amount
2. Credit side would be increase with the same amount
3. Total of the trial balance would be agree in all aspect
4. None of the given options


Question # 4 of 15 ( Start time: 03:31:23 PM ) Total Marks: 1
Which of the following truly represents expenses?
Select correct option:

1. Future benefits
2. Past results
3. Cost of doing business
4. Past receipts

Question # 5 of 15 ( Start time: 03:32:03 PM ) Total Marks: 1
Which of the following is a special temporary account used to close all of the revenue and
expense accounts?
Select correct option:

1. Close-out Summary
2. Owner’s Capital (page#35)
3. Income Summary
4. Temporary Summary

Question # 6 of 15 ( Start time: 03:32:26 PM ) Total Marks: 1
Adjusting entries are used to:
Select correct option:

1. Bring account balances up to date at year end
2. Close temporary accounts at year end
3. Close permanent accounts at year end
4. Bring account balances at zero

Question # 7 of 15 ( Start time: 03:33:06 PM ) Total Marks: 1
Which of the following expenses would normally be classified as Other or Non Operating
Expense on a multiple-step income statement?
Select correct option:

1. Interest expense
2. Depreciation expense
3. Insurance expense
4. Salaries expense

Question # 8 of 15 ( Start time: 03:33:32 PM ) Total Marks: 1
The investments made by the business for ten years in a saving scheme will be classified
as:
Select correct option:

1. Fixed assets
2. Long term asset
3. Liquid asset
4. Bonds
Question # 9 of 15 ( Start time: 03:34:39 PM ) Total Marks: 1
The basic purpose of financial statements is to assist users in evaluating the________
Select correct option:

1. Financial position
2. Profitability of an organization
3. Future prospects

4. All of the given options


Question # 10 of 15 ( Start time: 03:35:01 PM ) Total Marks: 1
Which one of the following would lead to the decrease in the owner’s equity?
Select correct option:

1. Purchasing a piece of land
2. Paying dividends to shareholders
3. Purchasing equipment on account
4. Paying back the principal of a loan


Question # 11 of 15 ( Start time: 03:35:25 PM ) Total Marks: 1
There are five main kinds of current assets. Which of the following is NOT among them?
Select correct option:

1. Cash and equivalents
2. Deferred income
3. Accounts receivable
4. Prepaid expenses

Question # 12 of 15 ( Start time: 03:36:13 PM ) Total Marks: 1
Current assets are those assets which management intends to convert into cash or consume
within:
Select correct option:

1. The operating cycle
2. One year
3. The longer of operating cycle or one year
4. The shorter of operating cycle or one year

Question # 13 of 15 ( Start time: 03:36:51 PM ) Total Marks: 1
Which of the following is the first step of the accounting cycle?
Select correct option:

1. Making adjusting entries
2. Preparation of the financial statements
3. Posting in the ledger accounts
4. Analyze and journalize transactions as they occur (page#36)


Question # 14 of 15 ( Start time: 03:37:18 PM ) Total Marks: 1
Which of the following is TRUE about both sides of the trial balance?
Select correct option:

1. Both sides are always positive
2. Both sides are negative
3. Both sides are equal
4. Both sides are not linked which each other

Question # 15 of 15 ( Start time: 03:37:36 PM ) Total Marks: 1
Which of the following would represent a non-cash expense for the business?
Select correct option:

1. Cost of building
2. Cost of inventory
3. Cost of office equipment
4. Depreciation of building