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Study Resources (Accounting)

Objective 1 1) An IT auditor must understand the terms and definitions used by accounting and IT professionals. 2) Which of the following professionals is the most important group an IT auditor must be able to communicate? A) Accounting and Human Resource professionals B) IT and Sales professionals C) Accounting and IT professionals D) Sales and.
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15.7   Questions 1) In a partnership, a partner's capital account is increased by ________. A) dividends B) a partner's share of net income C) contributions made by a partner D) B and C 2) A sole proprietorship has ________ owner's equity account(s). A partnership with three partners has ________ owners' equity account(s). A) one; one B) two; one C).
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11) Jerome Company purchased common stock in Gonzalez Company. Jerome Company treats the investment as available-for-sale securities. During the current year, Gonzalez Company earned $4,000,000 and paid dividends of $1,000,000. Assume that Jerome Company owns 10% of the outstanding shares of Gonzalez Company. Gonzalez Company's dividend will affect Jerome Company.
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4) A parent company purchases 100 percent of the outstanding common stock in a subsidiary. What happens to the subsidiary the day after the purchase? Which of the following statements is FALSE? A) The purchase by the parent company does not affect the subsidiary's books. B) The subsidiary ceases to exist. C) The.
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7) The following information is available for the Novin Company: Net income for the year ended December 31, 2014$177.4 Sales for the year ended December 31, 20141,606.0 Retained earnings, December 31, 2014150.0 Retained earnings, December 31, 2013180.0 Total assets, December 31, 2014470.0 Total assets, December 31, 2013442.0 Total liabilities, December 31, 2014240.0 Total liabilities, December 31, 2013182.0 What is.
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7) Nebraska Company gave a long-term note payable in the amount of $285,000 to acquire a new piece of land. This transaction will be reported on the statement of cash flows as a ________. A) investing activity B) financing activity C) investing and financing activity D) noncash investing and financing transaction 8) An example of.
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21) Cash collected from customers before goods are delivered will increase ________. A) assets and increase revenues B) revenues and decrease liabilities C) liabilities and increase assets D) liabilities and decrease revenues 22) A magazine publisher sells annual subscriptions for magazines. The publisher requires cash payment before the magazines are sent out. When the first.
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5) In periods of inflation, FIFO leads to ________ gross profit than LIFO. A) lower B) the same C) higher D) not enough information 6) In periods of inflation, the ________ method of inventory valuation provides a more realistic net income. A) LIFO B) FIFO C) average cost D) weighted-average cost 7) During a period of inflation, the LIFO method.
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5) Treasury stock is shown on the balance sheets as a deduction from ________. A) total assets B) total liabilities C) total current assets D) total stockholders' equity 6) Johnson Company's capital stock is currently trading for $22 per share. The following accounts appear on the balance sheet: Common stock, $6.00 par value per share, 10,000.
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17) The Vaclav Company reports the following information: Sales for the year ended December 31, 2012$106,950 Gross profit for the year ended December 31, 2012$45,150 Net income for the year ended December 31, 2012$7,300 Total Current Assets, December 31, 2012$18,700 Total Current Liabilities, December 31, 2012$7,600 Total Assets, December 31, 2012$48,400 Total Liabilities, December 31, 2012$20,850 Average common.
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35) In an accounting system database, which field belongs in a table containing customer information? A) Item Number B) Street Address C) Invoice Number D) Cost 36) A ________ is a collection of related database tables. A) Field B) Relational Database C) Operational Database D) Primary Key 37) In an accounting system database, which field belongs in a table containing.
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Match the following cycles with their corresponding accounting system module. A) Banking Module B) Employees Module C) Financial Module D) Customers Module E) Vendors Module 14) Payroll Cycle 15) Sales Cycle 16) Financial Cycle 17) Purchasing Cycle 18) When looking at an accounting system using the aerial view, you see A) Accounting information available to internal users, primarily management B) Detailed information.
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15.6   Questions 1) A multiple step income statement ________. A) lists all the expenses together and calculates a total B) has a subtotal for gross profit C) has a subtotal for total assets D) has a subtotal for total retained earnings 2) Sunday Company reports the following information on December 31, 2014: Cash$20,000 Accounts receivable112,000 Accounts payable91,000 Accrued wages payable6,000 Unearned.
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31) On January 1, 2014, Liberty Company purchased common stock in Garcia Company for $1,000,000. During 2014, Garcia Company earned $4,000,000 and paid dividends of $1,000,000. Assume that Liberty Company owns 30% of the outstanding shares of Garcia Company. The market value of the investment at December 31, 2014 is.
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Objective 4 1) IT infrastructure is the design of an organization's information technology. 2) An IT audit includes auditing the System Development Life Cycle (SDLC). 3) What are the three key factors to consider for a successful accounting system? A) People, Processes, and Technology B) People, Budget, and Time C) Processes, Budget, and Time D) Time, Processes,.
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25) When making adjusting entries, you are using the ________ module in the base line accounting system. A) Reporting B) Financial C) Banking D) Company 26) The reports module produces for the following people except A) Investors B) Managers C) Accountants D) Customers 27) What modules comprise a baseline accounting system? A) Vendors, Employees, Sales, Banking, Financial, and Reports B) Inventory, Employees,.
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15.11   Questions 1) Yesterday Company's accountant recorded a debit to Accounts Payable and a credit to Cash. This transaction will ________. A) increase Cash and decrease Accounts Payable B) decrease Cash and increase Accounts Payable C) increase Cash and increase Accounts Payable D) decrease Cash and decrease Accounts Payable 2) Uptown Company purchases $4,000 of inventory.
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24) The income statement and comparative balance sheets for Sterling Company are presented below: Sterling Company Income Statement For the Year Ended December 31, 2015 Sales$586,000 Cost of goods sold311,000 Depreciation expense14,000 Amortization expense3,000 Wage expense88,000 Rent expense24,000 Loss on sale of fixed assets2,600 Interest expense4,900 Income tax expense56,000 Total expenses503,500 Net income$82,500 December 31, 2014         December 31, 2015 Cash$16,300$19,900 Accounts receivable27,90036,300 Inventory53,90048,200 Prepaid rent1,8002,000 Land22,00032,000 Fixed assets118,000130,000 Accumulated depreciation(39,000)(46,000) Patent11,00012,000 Total assets$211,900$234,400 Accounts payable21,10027,700 Wages payable5,7006,200 Interest.
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12) The inventory method a company uses does not affect its income statement. 13) Operating income summarizes the results of basic operating activities of a company. 14) The last line item on an income statement is earnings per share. 15) The balances on December 31, 2015 are available for Matthew Company: Accounts payable$2,550 Accounts receivable3,550 Accumulated.
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Objective 3 1) The enterprise-wide view of accounting enables the accountant to see how the accounting system interacts with other subsystems in the enterprise system. 2) The Customer Module of a baseline accounting system includes creating purchase orders. 3) The Financial Module of a baseline accounting system includes payroll transactions. 4) The database is.
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4) The ending retained earnings balance of Brothers Company is $700,000. During the current year, net income is $370,000 and dividends declared are $150,000. What is the beginning balance in retained earnings? A) $480,000 B) $580,000 C) $800,000 D) $1,060,000 5) Dividends paid are reported on the Retained Earnings Statement. 6) Cash dividends declared are an.
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Objective 1 1) Entering data once eliminates the possibility of updating some, but not all of the other entries. 2) According to the Pareto Principle, if you spend 80% of the time designing a database, you will spend 20% of your time maintaining the database. 3) Database management system (DBMS) software transfers data.
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21) Leasehold improvements are amortized annually. 22) Some intangible assets are depreciated. 23) Research and development costs are expensed when incurred for financial statement purposes. 24) Goodwill is amortized for financial statement purposes. 16.2   Questions 1) Deferred tax liabilities are ________. A) expected increases in future income taxes due to past transactions B) expected decreases in future.
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24) Noncontrolling interests appear on a consolidated balance sheet when a parent company owns more than 50 percent but less than 100 percent of a subsidiary's common stock. 25) Noncontrolling interests affect only the balance sheet of consolidated financial statements. 17.3   Questions 1) On January 1, 2012, a parent company acquired all of.
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15.4   Questions 1) On July 1, 2012, Slowinski Company borrows $100,000 on a 10% note due to a bank in one year. The accounts of Slowinski Company are affected by the adjusting entry at December 31, 2012 in which of the following ways? A) increase assets and decrease expenses B) increase assets and.
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11) A multiple-step income statement includes a subtotal for gross profit. 12) Gross profit is the excess of sales over all expenses. 13) Cooley Company reports the following accounts and balances at December 31, 2015: Accounts Payable$22,800 Accounts Receivable18,800 Cash24,400 Land82,400 Machine129,200 Merchandise Inventory63,600 Long-term Note Payable79,200 Short-term Note Payable14,400 Paid-in Capital200,000 Retained Earnings? Sales Revenue122,000 Cost of Goods Sold80,000 Operating Expenses40,000 Required: Prepare a balance sheet.
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27) Line items on common-size financial statements are expressed in percentages of some base such as total assets. 28) The current ratio equals current assets divided by current liabilities. 29) Return on sales equals gross profit divided by sales. 30) Liquidity ratios focus on whether there are sufficient current assets to satisfy current.
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    16.1   Questions 1) Which of the following assets is NOT classified as a short-term investment? A) corporate stocks B) corporate bonds C) debt securities issued by governments D) checking account balance 2) The net amount a company expects to collects on Accounts Receivable is equal to ________. A) gross Accounts Receivable B) Allowance for Doubtful Accounts C) gross Accounts.
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2) Retained earnings are a general claim against ________. A) stockholders B) creditors C) paid in capital D) total assets 3) When cash dividends are declared, ________ decrease(s) and ________ increase(s). A) retained earnings; cash B) cash; retained earnings C) retained earnings; liabilities D) cash; liabilities 4) The board of directors of Schwinn Company declared a cash dividend. Two weeks.
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16) The following information is available for Anderson Company at December 31, 2016: Additional paid-in capital, common$490,000 Common stock, $5 par value, 40,000 shares issued200,000 Dividends payable415,000 Long-term investment in Jacobs Company1,400,000 Marketable securities610,000 Retained earnings242,000 Treasury stock, common, 8,000 shares176,000 Required: Prepare the stockholders' equity section of a classified balance sheet at December 31, 2016. Assume 400,000 shares.
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2) One of the limitations of the balance sheet is that the dollar amounts for different assets reflect different levels of inflation. That is the result of the ________ assumption. A) recognition B) matching C) stable monetary unit D) conservatism 3) The matching concept matches ________ and ________. A) assets; liabilities B) assets; expenses C) revenues; expenses incurred.
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    17.1   Questions 1) An investor holds 5% of the outstanding stock of an investee. The investor plans to sell the stock in two months. The investor reports the dividends received from the stock as ________. A) an increase in the investment account B) a decrease in the investment account C) dividend revenue on the.
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7) The cash paid for employees' wages is included in the ________ section of the statement of cash flows. Assume the direct method is used. A) operating B) financing C) investing D) noncash 8) The cash paid to purchase equipment is included in the ________ section of the statement of cash flows. A) operating B) investing C) financing D).
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6) Keller Company has the following income statement for the year ending December 31, 2016: Sales$1,562 Cost of goods sold806 Gross profit756 Operating expenses: Wage expense160 Depreciation expense16 Rent expense106 Miscellaneous expense10 Total operating expenses292 Operating income464 Income tax expense162 Net income$302 If Keller Company prepares a common size income statement, what will they report for Rent expense? A) 2.3% B) 4.3% C) 4.4% D) 6.8% 7) The.
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56) How can data in an accounting information system improve decision making? Provide examples of these decisions. 57) What is the difference between data, information, and business intelligence? 58) What is shadow data and why is it used? 59) What are the advantages and disadvantages of using a shadow data system? 60) What may.
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9) Goodwill is recognized when one company purchases another company and ________. A) the purchase price of the acquired company exceeds the book value of the acquired company's assets B) the purchase price of the acquired company exceeds the book value of the acquired company's assets less liabilities C) the purchase price of.
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33) The following information is available for Ward Company: Sales$189,400 Gross profit$56,400 Net income$25,800 Total current assets$32,400 Total current liabilities$34,400 Total stockholders' equity, last year$192,000 Total stockholders' equity, current year$280,000 Required: Compute the following ratios: A) Current ratio B) Gross profit rate C) Return on sales D) Return on stockholders' equity 34) The following data is available for Everest Company: Credit Sales$1,702 Net Income$112 Total Current Assets$366 Total.
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6) Lantern Company reported sales of $200,000, an increase in accounts receivable of $5,000, and a decrease in cash of $20,000. How much cash was collected from customers? A) $185,000 B) $195,000 C) $200,000 D) $220,000 7) Beth Company reported sales on account of $250,000, an increase in inventory of $70,000, and a decrease in.
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