107 Free Test Bank for Fundamentals of Financial Accounting 4th Edition by Phillips 

Free test bank for Fundamentals of Financial Accounting 4th Edition by Phillips offers comprehensive instruction and explains accounting principles and concepts. You will learn how to prepare and analyse on  financial accounts. Answer our following brief accounting questions with instant results to assess exactly your understanding at present. There are 107 mutiple choice questions below to help you improve your accounting knowledge. Especially, you don’t pay any fee for this online practice because it is free in test bank. Let’s Enjoy in practice with us right now!

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Which of the following would be reported on the income statement for 2013?

•  A. Supplies that were purchased and used in 2012 but paid for in 2013.
•  B. Dividends that were paid in 2013.
•  C. Supplies that were purchased in 2012, but used in 2013.
•  D. Accounts receivable as of December 31, 2013.

Operating activities:

•  A. include interest paid on a bank loan.
•  B. include the buying or selling of land, buildings, equipment, and other long-term investments.
•  C. include the repayment of loan proceeds to the bank.
•  D. include a bank loan to cover the payment of wages, rent and other operating costs.

The Whackem-Smackem Software Company sold $11 million of computer games in its first year of operations. The company received payments of $7.5 million for these computer games. The company's income statement would report:

•  A. sales revenue of $7.5 million.
•  B. accounts receivable of $3.5 million.
•  C. expenses of $3.5 million.
•  D. sales revenue of $11 million.

Which of the following would not affect a company's net income?

•  A. A change in the company's income taxes.
•  B. Changing the selling price of a company's product.
•  C. Paying a dividend to stockholders.
•  D. Advertising a new product.

Which of the following is true?

•  A. Companies can choose to end their fiscal year on any date they feel is most relevant.
•  B. Companies must end their fiscal year on March 31, June 30, September 30, or December 31.
•  C. Companies can select any date except a holiday to end their fiscal year.
•  D. Companies must end their fiscal year on December 31.

As of September 30, 2013, which source provided more financing for Anonymous, Inc.?

•  A. owners
•  B. creditors
•  C. both provided equal financing
•  D. neither provided any financing

The Publish or Perish Printing Company paid a dividend to stockholders. This will be reported on the:

•  A. audit report.
•  B. income statement.
•  C. balance sheet.
•  D. statement of retained earnings.

Which of the following is not true?

•  A. Assets = Liabilities + Stockholders' Equity
•  B. Liabilities = Assets - Stockholders' Equity
•  C. Stockholders' Equity + Liabilities - Assets = 0
•  D. Liabilities - Stockholders' Equity = Assets

Dividends are reported on the:

•  A. Income statement.
•  B. Balance sheet.
•  C. Statement of retained earnings.
•  D. Income statement and balance sheet.

In which of the following organizational forms are the owners not taxed on the business profits?

•  A. Sole proprietorships.
•  B. Partnerships.
•  C. Corporations.
•  D. Public partnerships.

Net Income is

•  A. the amount the company earned after expenses and dividends are subtracted from revenue.
•  B. the amount by which assets exceed expenses.
•  C. the amount by which assets exceed liabilities.
•  D. the amount by which revenues exceed expenses.

The three main types of business activities measured by financial statements are:

•  A. selling goods, selling services, and obtaining financing.
•  B. operating activities, investing activities, and financing activities.
•  C. hiring, producing, and advertising.
•  D. generating revenues, paying expenses, and paying dividends.

If XYZ Company had $12 million in revenue and net income of $3 million, then its:

•  A. expenses must have been $15 million.
•  B. expenses must have been $9 million.
•  C. assets must have been $12 million.
•  D. assets must have been $3 million.

Which of the following are the three basic elements of the balance sheet?

•  A. assets, liabilities, and retained earnings.
•  B. assets, liabilities, and contributed capital.
•  C. assets, liabilities, and revenues.
•  D. assets, liabilities, and stockholders' equity.

Financing that individuals or institutions have provided to a company is

•  A. always classified as liabilities.
•  B. classified as liabilities when provided by creditors and stockholders' equity when provided by owners.
•  C. always classified as equity.
•  D. classified as stockholders' equity when provided by creditors and liabilities when provided by owners.

Assets:

•  A. represent the amounts earned by a company.
•  B. must equal the liabilities of a company.
•  C. must equal the stockholders' equity of the company.
•  D. represent the resources owned by a company.

Cash flow from investing activities includes

•  A. amounts received from a company's stockholders for the sale of stock.
•  B. amounts received from the sale of the company's office building.
•  C. amounts paid for dividends to the company's stockholders.
•  D. amounts paid for salaries of employees.

Which of the following would not represent a financing activity?

•  A. Paying dividends to stockholders.
•  B. An investment of capital by the owners.
•  C. Borrowing money from a bank to purchase new equipment.
•  D. Buying supplies on account.

Public accountants:

•  A. provide services to a variety of businesses.
•  B. may work for the SEC.
•  C. are government employees.
•  D. are generally involved in internal auditing, budgeting, and cost accounting.

Which of the following is not a professional certification for accountants?

•  A. CFO
•  B. CPA
•  C. CMA
•  D. CIA

Which of the following is a true statement?

•  A. The SEC approves the rules used by the auditors in determining whether a public company's financial statements are in conformity with GAAP.
•  B. The PCAOB and the SEC were both created by the FASB.
•  C. The SEC was created by the PCAOB.
•  D. The PCAOB approves the rules used by auditors in determining whether a public company's financial statements are in conformity with GAAP.

The separate entity assumption means:

•  A. a company's financial statements reflect only the business activities of that company.
•  B. each separate owner's finances must be revealed in the financial statements.
•  C. each separate entity that has a claim on a company's assets must be shown in the financial statements.
•  D. if the business is a sole proprietorship, the owners' personal activities are included in the company's financial statements.

Public corporations:

•  A. are businesses owned by two or more people, each of whom is personally liable for the debts of the business.
•  B. are businesses whose stock is bought and sold on a stock exchange.
•  C. are businesses whose stock is bought and sold privately.
•  D. are businesses where stock is not used as evidence of ownership.

The Don't Bite Me Pest Control Company has 10,000 gallons of insecticide supplies on hand that cost $300,000; a bill from the vendor for $100,000 of these supplies has not yet been paid. The company expects to earn $800,000 for its services when it uses the insecticide supplies. The company would report a supplies asset in the amount of

•  A. $10,000.
•  B. $200,000.
•  C. $300,000.
•  D. $800,000.

A company's balance sheet contained the following information:Contributed Capital: $12,000; Accounts Payable: $64,000; Total Assets: $176,000; Retained Earnings: $28,000. Assume Notes Payable is the only other item on the balance sheet. Notes Payable must equal

•  A. $200,000.
•  B. $8,000.
•  C. $72,000.
•  D. $344,000.

Which one of the following is not likely to be a consequence of fraudulent financial reporting?

•  A. The company's stock price drops once the fraud is discovered.
•  B. Innocent accountants who work for the company's CPA firm lose their jobs.
•  C. Creditors recover 100% of amounts owed to them.
•  D. Employees lose their retirement savings.

Accounting information systems:

•  A. are summarized by reports that are published to the public.
•  B. capture and report the results of a business's operating, investing, and financing activities.
•  C. monitor business activities only in financial terms.
•  D. capture only the information that is needed by the owners of the company.

Creditors are:

•  A. people or organizations who owe money to a business.
•  B. people or organizations to whom a business owes money.
•  C. stockholders of a business.
•  D. customers of a business.

At the end of last year, the company's assets totaled $860,000 and its liabilities totaled $740,000. During the current year, the company's total assets increased by $58,000 and its total liabilities increased by $24,000. At the end of the current year, stockholders' equity was

•  A. $154,000.
•  B. $120,000.
•  C. $34,000.
•  D. $178,000.

Financial statements are most commonly prepared:

•  A. daily.
•  B. monthly, quarterly and annually.
•  C. as needed.
•  D. weekly.

Expenses are shown

•  A. on the income statement in the time period in which they are paid.
•  B. on the income statement in the time period in which they are incurred.
•  C. on the balance sheet in the time period in which they are paid.
•  D. on the balance sheet in the time period in which they are incurred.

During its first year of operations, Widgets Incorporated reported sales revenue of $386,000 but collected only $303,000 from customers. The amount to be reported as accounts receivable at the end of the year is

•  A. $689,000.
•  B. $386,000.
•  C. $303,000.
•  D. $83,000.