Question 1

The cost of goods sold is

an asset account.

a loss account.

an expense account.

a revenue account.

Question 2

Which of the following best demonstrates the full disclosure principle?

Audit report

Company tax return

Explanatory notes to the financial statements

Multi-step income statement

Question 3

Which of the following accounts is closed at the end of the accounting period?

Unearned revenues

Retained Earnings

Interest payable

Costo de los bienes vendidos (cost of goods sold)

Question 4

ABC, Inc. invested $75,000 in XYZ, Inc. and received capital shares in exchange for the money invested. The XYZ journal entry to post this transaction will include a

credit to capital shares for $75,000.

$75,000.

withholding income for $75,000.

debit to sales revenue for $75,000.

Question 5

The conceptual accounting framework recognizes which of the following as a assumption and not as a principle?

commercial entity

full disclosure.

historical cost.

pareo of income and expenses (matching)

Question 6

To meet full disclosure needs, companies use supplemental information including

Comments included in parentheses or modification comments written on the front of the financial statements.

Explanatory and disclosure notes communicating additional elements about the company's operations, accounting principles, contractual agreements and pending litigation.

Financial statements or supplementary tablesSoever others that report more detailed information than that included in the primary financial statements.

All options are correct.

Question 7

Which of the following shows the correct order of current assets in the Balance Sheet?

Cash, Accounts Receivable, Inventory, Prepaid and Other

Cash, Inventory, Accounts Receivable, Prepaid and Other

Cash, Inventory, Accounts Receivable, Other and Prepaid

Cash, Accounts Receivable, Prepaid, Inventory and Other

Question 8

Within the following options, the main goal of preparing 10K report is to provide useful information for

SEC decision-making.

decision-making by creditors and investors.

FASB decision-making.

management's decision-making.

Question 9

Debiting an account only means

write down an amount on the left side of the account.

write down an amount on the right side of the account.

decrease the bill by an amount.

increase the bill by an amount.

Question 10

Which of the following accounts has a normal debit balance?

Cumulative depreciation

Taxes payable

Sales Revenue

Cost of goods sold

Question 11

Revenue is recognized in the period when the company has transferred control of the goods or services to customers and not necessarily when it charges.

True

False

Question 12

The periodicity scenario relates to the qualitative feature of timely information (timeliness).

True

False

Question 13

Expenses represent future cash sacrifices or other assets for past transactions.

True

False

Question 14

Expenses are recognized when the company consumes its assets in the process of generating revenue or a debt has been incurred (increased) without affecting the assets.

True

False

Question 15

The Income statement summarizes the result of the company's operations for a period of time.

True

False

Question 16

Closing entries are required to cumpir with the principles of revenue recognition and expense recognition.

True

False

Question 17

After preparing an adjusted trial balance, the next step in the accounting cycle is to record the closing antries and move to the general ledger.

True

False

Question 18

Explain the difference between revenue and earnings.

Question 19

ABC, Inc. had revenue of $500,000 in its first year of operations. ABC has not charged $50,000 of its sales and still owes $75,000 of the $90,000 of its merchandise inventory. ABC has no inventory available at the end of the year. The company paid $25,000 in wages.

The owners invested $30,000 in the business and the company borrowed $40,000 from the bank at 10% payable annually for 5 years. ABC paid for this year's interest on December 30. In addition, on January 1 of this year, he paid $4,000 for a two-year insurance policy.

ABC has a tax rate of 40%.

Prepare a Statement of Results for the first year of ABC operations.

Question 20

XYZ, Inc.'s Adjusted Trial Balance on December 31, 2019 is presented below.

Debt

Credit

Cash

$10,500

Accounts receivable

150,000

Prepaid income

5,000

Inventory

25,000

Equipment

300,000

Accumulated Depreciation - Teams

$125,000

Accounts payable

30,000

Documents payable - due in 3 months

30,000

Wages payable

4,000

Interest payable

1,000

Capital in securities

200,000

Retained Earnings

50,000

Sales revenue

400,000

Costs of goods sold

180,000

Wage spending

120,000

Rent expense

15,000

Depreciation expense

30,000

Interest expense

2,000

Advertising expenses

2,500

Total

$840,000

$840,000

Using this information, determine the prepare net income or loss for the year ended December 31, 2019.