I am having problems with the following multiple choice questions. I have given my answers to the questions at the bottom after the questions. I would appreciate if someone tells me if answers are right or not. And if they are not, I would appreciate it if they could tell me what the correct answer is. Thanks
28. The total investment by shareholders at the time the company issued the stock is the sum of
a. additional paid-in capital and retained earnings.
b. common stock and retained earnings.
c. common stock and additional paid-in capital.
d. contributed capital and retained earnings.
29. Each of the following is a nominal account except
a. Cost of Goods Sold.
b. Income Summary.
c. Retained Earnings.
d. Sales.
30. The approach used by most firms for analyzing transactions is the
a. double-entry accounting system.
b. equation approach.
c. ledger system.
d. transactions approach.
31. The set of T-accounts that a company uses is collectively referred to as
a. nominal accounts.
b. the ledger.
c. permanent accounts.
d. the journal.
34. The purchase of inventory in account is considered a (an)
a. buying activity.
b. financing activity
c. investing activity.
d. operating activity.
35. The difference between sales revenue and cost of goods sold is
a. gross profit.
b. net income.
c. operating profit.
d. retained earnings.
38. The presentation of an accumulated depreciation account is helpful to financial statement users in all of the following ways except to:
a. estimate how close the asset is to being fully depreciated.
b. observe the original cost of the asset.
c. determine the market value of the asset.
d. estimate the years remaining in the asset’s useful life.
39. Paying interest should be classified as a (an)
a. borrowing activity.
b. financing activity.
c. investing activity.
d. operating activity.
40. The entries that accomplish the transfer of balances from revenue and expense accounts to retained earnings are called
a. adjusting entries.
b. closing entries.
c. nominal entries.
d. temporary entries.
My answers to the above multiple choice questions are as follows. I would appreciate if someone could tell me if my answers to these questions are correct or not. If they are not, I would appreciate it if someone could tell me the correct answers. Thanks.
28. C
29. C
30. A
31. B
34. D
35. A
38. B
39. B
40. D
Here are some more multiple choice problems I am having trouble with. I have posted my answers at the end after the questions. I would appreciate it if someone could tell me if my answers are right or not. If they are not, I would appreciate it someone what the right answer is. Thanks.
18. Revenue is recognized at the time of collection under the:
a. Completed contract method.
b. Accrual basis.
c. Percentage of completion method.
d. Installment method.
19. Revenue is recognized at the time of sale under the:
a. Installment method.
b. Accrual basis.
c. Production method.
d. Cost recovery method.
20. Revenue is recognized based on contractual agreements in which of the following types of business?
a. Retail sales
b. Mining
c. Construction
d. Franchise operations
21. Which method does not recognize revenue prior to collection?
a. Cost recovery method
b. Accrual basis
c. Percentage of completion method
d. Production method
22. Retail stores generally recognize their revenue based on the:
a. Installment method.
b. Accrual basis.
c. Production method.
d. Cost recovery method.
23. The revenue recognition method that is used when uncertainty pertains largely to assurance of collection is the:
a. Cost recovery method.
b. Installment method.
c. Production method.
d. Percentage of completion method.
24. Which of the following methods defers recognition of revenue?
a. Production method
b. Accrual basis
c. Percentage of completion method
d. Cost recovery method
25. Revenue is recognized after the time of delivery (sale) using the:
a. Cost recovery method.
b. Production method.
c. Accrual basis.
d. Percentage of completion method.
26. When retail land sales companies meet certain minimum criteria they may recognize revenue at the time of:
a. Production.
b. Contract signing.
c. Collection.
d. Completion.
27. Which of the following recognizes revenue based on costs incurred to date relative to estimated total costs?
a. Cost recovery
b. Installment
c. Percentage of completion
d. Completed contract
28. A deferred expense is treated as an:
a. asset.
b. expense.
c. accrued expense.
d. unearned expense.
29. Each of the following are treated as a liability except a(n):
a. customer deposit.
b. deferred expense.
c. deferred revenue.
d. unearned revenue.
30. The matching concept requires that firms recognize the costs to produce revenue (expenses):
a. after revenues are recognized.
b. before revenues are recognized.
c. at the same time revenues are recognized.
d. over multiple periods.
37. During the current year Cypert Corporation sold $5,000,000 in goods that cost $3,500,000. Cash sales were $1,800,000 and credit sales $3,200,000. Cypert collected $2,500,000 of the credit sales during the year. What amount of revenue should Cypert recognize for the year under accrual-basis accounting?
a. $1,800,000
b. $3,200,000
c. $4,300,000
d. $5,000,000
47. Under what condition is it possible to recognize revenue using the
production method?
a. When the production process takes a reasonably short period.
b. When the collection of the receivable is reasonably uncertain.
c. When the sale must be reported as a credit sale.
d. When both the value and the assurance of sale can be estimated at the time of production.
48. Under which of the following methods are revenues recognized over a number of periods from a single sale?
a. Completed contract
b. Accrual basis
c. Cost recovery
d. Percentage of completion
49. Multiple-step income statements include each of the following categories except:
a. accounting changes.
b. comprehensive income.
c. extraordinary items.
d. nonrecurring items.
50. Which of the following is not reported after the computation of tax
expense on the income statement?
a. Cumulative effect of changes in accounting principles
b. Discontinued operations
c. Extraordinary items
d. Nonrecurring items
My answers to the above questions.
18. D
19. B
20. D
21. A
22. B
23. C
24. D
25. C
26. B
27. C
28. A
29. A
30. C
37. C
47. D
48. A
49. D
50. D
