2017/2018.iw Student No. Student Name Total iV Scores ule Choice Qusions ONLY ON
ID: 2542686 • Letter: 2
Question
2017/2018.iw Student No. Student Name Total iV Scores ule Choice Qusions ONLY ONE answer is correct. (2 x 10-20) l. The 2. A debit may signity an a iscresse in equity accouer t inciease in Hablity account d increase in revenue a The cost concopt b. The revenue concept d. The matching conceps 4 Tomporary accouets are accounts like a.owner'sital b.owner's drawing c, unearned revenue dprepaid expense 5. ........-are the plicies and procedures that poser assets frm misuse, ensure that busines! in is accurate, and ensure that laws and regulations ae being followed. a. Internal controls b.Accounting systems c.Subsidiary ledgers d. GAAP 6 On a multi-step income statement, the excess of net sales a. operating income bgross profit .income from operations d. net income management's philosophy and operating style bthe company's organizational structure over the cost of merchandise sol 7. The factorts) influencing a company's control environment includels) c. the company's personnel policies d. all of the above 8. When a note receivable is dishonored, Accounts Receivable is debised for what amount? a the maturity value of the note b. the maturity value of the note less accrued interest c. the face value of the note d. the maturity value of the note plus accrued interestExplanation / Answer
1. The answer is “d” – account payable.
This account is a current liability and is usually paid within a period of 12 months.
2. The answer is “c” – increase in asset account.
For example when equipment is purchased through bank loans then equipment account will be debited and loan account will be credited.
3. The answer is “d” – the matching concept.
The matching concept is an accounting practice whereby a firm reports revenues and related expenses in the same accounting period.
4. The answer is “b” – owner’s drawing.
It is a contra equity account and is not a permanent account.
5. The answer is “a” – internal controls.
Internal control is a process which helps an organization achieve its objectives toward operational efficiency and effectiveness. Internal control helps in risk mitigation by detecting and preventing fraud.
6. The answer is “b” – gross profit.
Net sales – cost of goods sold = gross profit.
7. The answer is “a” – management’s philosophy and operating style.
Control environment consists of actions, policies, values and management style that influence the day to day activities of a company.
8. The answer is “d” – the maturity value of the note plus accrued interest.
Accounts receivable is debited with total of principal and the interest owed and the notes receivable account is credited.
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