Accounting Final Exam MCQs with 100% accurate Solution

Sarbanes-Oxley was passed in response to which of the following?The .com implosionThe savings and loan bailoutThe implosion of WorldCom and EnronNone of the aboveQuestion2 of 50Which of the following describes the internal control component “monitoring of controls”?Internal auditors monitor company controls to safeguard assets, and external auditors evaluate the controls to ensure that the accounting records are accurate.Monitoring of controls is the “tone at the top” of the business.Monitoring of controls is designed to ensure that the business’s goals are achieved.A company must identify its risks.Question3 of 50Which of the following is a security procedure designed for e-commerce?Burglar alarmsFirewallsFireproof vaultsNone of the aboveQuestion4 of 50Case 8.5At December 31, 2008 – Affordable Custom Essay Writing Service | Write My Essay from Pro Writers, McGovern Company overstated ending inventory by $50,000.Refer to Case 8.5. How does this error affect cost of goods sold for 2008 – Affordable Custom Essay Writing Service | Write My Essay from Pro Writers?Has no effect on Cost of Goods SoldOverstates Cost of Goods Sold by $50,000Understates Cost of Goods Sold by $50,000None of the aboveQuestion5 of 50Gilkey Construction Company writes of the account of Arthur Blanks of $78,000. The journal entry to record this under the direct write off method is:A) Bad Debts Expense 78,000 Accounts Receivable – Arthur Blanks 78,000B) Allowance for doubtful accounts 78,000 Bad Debts Expense 78,000C) Allowance for doubtful accounts 78,000 Accounts Receivable – Arthur Blanks 78,000D) Accounts Receivable – Arthur Blanks 78,000 Allowance for doubtful accounts 78,000A)B)C)D)Question6 of 50Refer to Case 7.11. What is the quick ratio for 2004?.751.0.61.70Question7 of 50Which of the following is the last step in the daily control over cash receipts by mail?A mailroom employee sends all customer checks to the treasurer who has the cashier make the bank deposit.A mailroom clerk opens the mail and sends the remittance advices to the accounting department.The controller compares the records of the day’s bank deposit amount from the treasurer and the debit to Cash from the accounting department.The accounting department prepares journal entries to Cash and the customers’ accounts.Question8 of 50Case 7.4Gilkey Security Systems has the following for year ended 12-31-09 before adjustmentsAccounts receivable $130,000Net Credit Sales $840,000Allowance for doubtful accounts $3,000 debit balanceAging of accounts receivable $19,000Refer to Case 7.4. The balance in the allowance for doubtful accounts after the adjustment is:$22,000.$19,000.$28,200.$84,000.Question9 of 50An electronic fund transfer (EFT) for payment of a bill would be:subtracted from the bank balance of a bank reconciliation.added to the book balance of a bank reconciliation.added to the bank balance of a bank reconciliation.subtracted from the book balance of a bank reconciliation.Question10 of 50Case 8.1Emerson Electronics had the following information related to its September inventory.Number of Units CostSept. 1 Beginning Inventory 100 Units $105 Purchase 200 Units $1115 Sold 150 Units 26 Purchase 100 Units $1230 Sold 200 Units Sales were made at $20 per unit and Emerson uses the perpetual inventory system.Refer to Case 8.1. The value of cost of goods sold under LIFO would be:$3,900.$4,200.$4,000.$3,800.Question11 of 50For good internal control, the credit department should have no access to:customer information.customer credit applications.computer systems.cash.Question12 of 50Accounts receivable minus the allowance for doubtful accounts equals:net realizable value of accounts receivable.market value of accounts receivable.book value of accounts receivable.historical costs of accounts receivable.Question13 of 50By law, the provisions of Sarbanes-Oxley apply to:all companiesprivate companiespublic companiespublic companies with sales greater than one billion dollarsQuestion14 of 50Case 8.5At December 31, 2008 – Affordable Custom Essay Writing Service | Write My Essay from Pro Writers, McGovern Company overstated ending inventory by $50,000.Refer to Case 8.5. How does this error affect net income for 2009?Has no effect on Net IncomeOverstates Net Income by $50,000Understates Net Income by $50,000None of the aboveQuestion15 of 50Rising interest rates, gas prices, declining profits and strong competition in the auto industry all would be factors impacting the __________ of General Motors.control environmentsegregation of dutiescontrol activitiesrisk assessmentQuestion16 of 50Non sufficient funds (NSF) checks would be:subtracted from the book balance of a bank reconciliation.subtracted from the bank balance of a bank reconciliation.added to the bank balance of a bank reconciliation.added to the book balance of a bank reconciliation.Question17 of 50Case 7.5Gilkey Security Systems has the following for year ended 12-31-09 before adjustmentsAccounts receivable $130,000Net Credit Sales $840,000Allowance for doubtful accounts $3,000 debit balanceAging of accounts receivable $19,000Gilkey uses the aging method of estimating bad debt expense.Refer to Case 7.5. The journal entry for estimating bad debt expense at year end is:A) Allowance for doubtful accounts 19,000 Accounts Receivable 19,000B) Bad Debts Expense 22,000 Allowance for doubtful accounts 22,000C) Bad Debts Expense 19,000 Allowance for doubtful accounts 19,000D) Allowance for doubtful accounts 22,000 Bad Debts Expense 22,000A)B)C)D)Question18 of 50Open promises to pay by customers are called:notes receivable.other receivables.accounts receivable.none of the above.Question19 of 50Which of the following is a control over petty cash?Support all fund payments with a petty cash ticket.Keep a specific amount of cash on hand in the fund.Designate a custodian of the petty cash fund.All of the above are controls.Question20 of 50Which of the following is a requirement of the Sarbanes-Oxley Act?The outside auditor must issue an internal control report for each public company, and the Public Company Oversight Board evaluates the client’s internal controlsThe Public Company Oversight Board issues an internal control audit report for every publicly held company.Accounting firms may not both audit a public client and also provide certain consulting services for the same clientPublic companies oversee the work of auditors of other public companies.Question21 of 50Case 7.2Oddessy consulting has the following for year ended 12-31-09 before adjustmentsAccounts receivable $330,000Net Credit Sales $1,200,000Allowance for doubtful accounts $4,700 credit balanceEstimated percentage of Bad debts on credit sales 2%Oddessy uses the net credit sales method of estimating bad debt expense.Refer to Case 7.2. The journal entry for estimating bad debt expense at year end is:A) Allowance for doubtful accounts 24,000 Accounts Receivable 24,000B) Allowance for doubtful accounts 28,700 Bad Debts Expense 28,700C) Bad Debts Expense 28,700 Allowance for doubtful accounts 28,700D) Bad Debts Expense 24,000 Allowance for doubtful accounts 24,000A)B)C)D)Question22 of 50Which cost would be part of the cost of land?Putting up fencing around a buildingRemoving an old building from the landInstalling lights in a parking lotInstalling a sprinkler systemQuestion23 of 50In dealing with cash receipts, the amount debited to cash should equal:the amount of the depositthe amount of total salesthe amount of cash salessome other amountQuestion24 of 50Chase Bank loans P+P Company $120,000 on a 1 year promissory note on July 1, 2009. The interest rate of this loan is 12%. The principle and interest are due in one year. The journal entry to accrue interest earned on12-31-09 is:A) Cash 7,200 Interest revenue 7,200B) Cash 14,400 Interest revenue 14,400C) Interest receivable 7,200 Interest Revenue 7,200D) Interest Receivable 14,400 Interest Revenue 14,400A)B)C)D)Question25 of 50Case 8.1Emerson Electronics had the following information related to its September inventory.Number of Units CostSept. 1 Beginning Inventory 100 Units $105 Purchase 200 Units $1115 Sold 150 Units 26 Purchase 100 Units $1230 Sold 200 Units Sales were made at $20 per unit and Emerson uses the perpetual inventory system.Refer to Case 8.1. The value of ending inventory under FIFO would be:$700.$600.$500.$550.Question26 of 50In a $500 imprest petty cash fund:the currency minus coins plus tickets should equal $500.the currency minus coins minus tickets should equal $500.the currency plus coins plus tickets should equal $500.the currency plus coins minus tickets should equal $500.Question27 of 50Case 8.2Emerson Electronics had the following information related to its September inventory.Number of Units CostSept. 1 Beginning Inventory 200 Units $106 Purchase 200 Units $1216 Sold 250 Units 27 Purchase 200 Units $1430 Sold 300 Units Sales were made at $15 per unit and Emerson uses the perpetual inventory system.Refer to Case 8.2. Gross profit would be how much under FIFO?$8,250$1,550$1,950$1,750Question28 of 50Which of the following demonstrates internal control over cash receipts?A mailroom employee deposits all customer checks at the bank.A mailroom employee sends remittance advices to the treasurerA mailroom employee sends all customer checks to the treasurer who has the cashier make the bank depositAll of the above demonstrate internal control over cash receiptsQuestion29 of 50A written promise to pay a specified amount of money at a particular future date by a customer is a(n):accounts receivable.mortgage payable.notes payable.notes receivable.Question30 of 50Case 8.2Emerson Electronics had the following information related to its September inventory.Number of Units CostSept. 1 Beginning Inventory 200 Units $106 Purchase 200 Units $1216 Sold 250 Units 27 Purchase 200 Units $1430 Sold 300 Units Sales were made at $15 per unit and Emerson uses the perpetual inventory system.Refer to Case 8.2. Gross profit would be how much under LIFO?$1,950$8,250$1,550$1,750Question31 of 50Which of the following describes the internal control component “control procedures”?A company must identify its risks.Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate.Control procedures are the “tone at the top” of the business.Control procedures are designed to ensure that the business’s goals are achieved.Question32 of 50Mary is a warehouse worker who fills orders for shipment, receives new shipments of inventory in the warehouse and also records all inventory transactions into the accounting records. Mary is violating which of the following?Independent checksPhysical safe guardsSegregation of dutiesNone of the aboveQuestion33 of 50A(n) __________ is an internal control tool that reconciles the differences between a depositor’s cash records and the depositor’s cash balance in its bank account.checking accountbank statementbank reconciliationimprest petty cash fundQuestion34 of 50The direct write off method of accounting for bad debts violates which of the following accounting principles?Entity conceptGoing concernHistorical costMatching principleQuestion35 of 50The intentional misrepresentation of financial information on the financial statements is called:lack of internal controls.theft.fraudulent financial reporting.employee fraud.Question36 of 50Case 8.1Emerson Electronics had the following information related to its September inventory.Number of Units CostSept. 1 Beginning Inventory 100 Units $105 Purchase 200 Units $1115 Sold 150 Units 26 Purchase 100 Units $1230 Sold 200 Units Sales were made at $20 per unit and Emerson uses the perpetual inventory system.Refer to Case 8.1. The value of cost of goods sold under FIFO would be:$2,800.$3,100.$2,900.$3,800.Question37 of 50Case 8.6At December 31, 2008 – Affordable Custom Essay Writing Service | Write My Essay from Pro Writers, McGovern Company understated ending inventory by $50,000.Refer to Case 8.6. How does this error affect net income for 2008 – Affordable Custom Essay Writing Service | Write My Essay from Pro Writers?Understates Net Income by $50,000Overstates Net Income by $50,000Has no effect on Net IncomeNone of the aboveQuestion38 of 50The journal entry to set up a $500 imprest petty cash fund would be:A) Miscellaneous Expense 500 Cash in bank 500B) Cash in bank 500 Petty Cash 500C) Petty Cash 500 Cash in bank 500D) Accounts Receivable 500 Cash in bank 500A)B)C)D)Question39 of 50Which of the following is the first step in the purchasing and payment process?The supplier ships the goods and sends an invoice to the purchaser.The purchaser sends a check to the supplier.The purchaser sends a purchase order to the supplier.The purchase receives the inventory and prepares a receiving report.Question40 of 50Which inventory method would use the most current costs to determine costs of goods sold?LIFOSpecific IdentificationWeighted averageFIFOQuestion41 of 50Which of the following is considered a long term asset?InventoryAccounts receivableLandCashQuestion42 of 50Which of the following is NOT one of the components of internal control?Control proceduresRisk assessmentTheft managementControl environmentQuestion43 of 50With good internal controls, the person who handles cash can also:issue credits to customers for merchandise returned to us.account for cash receipts from customers.account for cash payments.do none of the above.Question44 of 50Which inventory method would use the oldest costs to value ending inventory?LIFOWeighted averageSpecific IdentificationFIFOQuestion45 of 50Which of the following describes the internal control component “control environment”?Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate.The control environment is the “tone at the top” of the business.The control environment is designed to ensure that the business’s goals are achievedA company must identify its risks.Question46 of 50Case 8.4Emerson Electronics had the following information related to its September inventory.Number of Units CostSept. 1 Beginning Inventory 200 Units $108 Purchase 200 Units $1229 Sold 200 Units $14200 units were sold @ $15 per unit and Emerson uses the perpetual inventory system.Refer to Case 8.4. Emerson has how many units in Ending Inventory?200 units50 units100 units300 unitsQuestion47 of 50Case 7.6Chase Bank loans P+P Company $120,000 on a 1 year promissory note on January 1, 2009. The interest rate of this loan is 12%. The principle and interest are due on 12-31-2009.Refer to Case 7.6. The amount of interest revenue that Chase will earn on this loan is:$1,200.$120,000.$14,400.$1,000.Question48 of 50Which of the following is TRUE of internal control?A company’s outside auditor is responsible for the company’s internal control system.One of the major purposes of internal control is to ensure accurate, reliable accounting records.Internal control procedures tend to diminish the importance of operational efficiency.Public companies generally had no internal control systems prior to the enactment of the Sarbanes-Oxley ActQuestion49 of 50Case 9.3Leah, Inc. has machinery with a cost of $100,000. The machinery has an estimated useful life of 10 years, and an estimated salvage value of $10,000. The machinery is expected to be able to produce a total of 1,000,000 units during its estimated life.Refer to Case 9.3. The amount of deprecation expense in the second year under straight line depreciation would be:$1,000.$10,000.$9,000.$5,000.Question50 of 50Inventory should be shown on the balance sheet at:market value.cost.the higher of cost or market value.the lower of cost or market value.

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