Question :
41. A detailed system of accounts allows the preparer of financial : 1245868
41. A detailed system of accounts allows the preparer of financial statements to decompose,
or __________, each transaction to convey information about the effects of the transaction.
A. mixup
B. disaggregate
C. aggregate
D. share
E. combine
42. To maintain balance sheet equality, it is necessary to report every event and transaction in a dual manner. If a transaction results in an increase in a Liability account, then which of the following must occur, to maintain the balance sheet equation?
A. decrease another liability.
B. decrease shareholders’ equity.
C. increase an asset.
D. all of the above will maintain the balance sheet equation
E. none of the above
43. T-accounts
A. summarize the effects of transactions on specific accounts.
B. show all the accounts affected by a single event or transaction.
C. provide a record of transactions.
D. all of the above
E. none of the above
44. A T-account is a device or convention for organizing and accumulating the accounting entries of transactions that affect an individual account. Which of the following is/are true?
A. Increases in assets appear on the left side, and decreases in assets appear on the right side of T-accounts.
B. Increases in liabilities appear on the right side, and decreases in liabilities appear on the left side of T-accounts.
C. Increases in shareholders’ equity appear on the right side, and decreases in shareholders’ equity appear on the left side of T-accounts
D. all of the above are true
E. none of the above are true
45. Brice Foods Group, a European food retailer that operates supermarkets in seven countries, engaged in the following transaction during 2013: purchased and received inventory costing €500 million on account from various suppliers. Indicate the effects of the transaction on the balance sheet equation. Brice Foods Group applies IFRS, and reports its results in millions of euros.
A. Assets + €500 million; Liabilities + €500 million
B. Assets + €500 million; Shareholders’ Equity + €500 million
C. Liabilities + €500 million; Shareholders’ Equity + €500 million
D. Liabilities + €500 million; Shareholders’ Equity – €500 million
E. Assets + €500 million; Shareholders’ Equity – €500 million
46. Composite, Inc., a firm specializing in building materials, engaged in the following transaction during 2013: issued 2,000 shares of common stock for $7,500 million in cash. Indicate the effects of the transaction on the balance sheet equation. (Composite Inc. applies U.S. GAAP financial reporting standards, and reports its results in millions of dollars.)
A. Liabilities +$7,500 million; Shareholders’ Equity -$7,500 million
B. Liabilities +$7,500 million; Shareholders’ Equity +$7,500 million
C. Assets +$7,500 million ; Liabilities +$7,500 million
D. Assets +$7,500 million ; Shareholders’ Equity +$7,500 million
E. Assets -$7,500 million ; Liabilities -$7,500 million
47. The equation that describes the relationship between the balance sheet and the income statement through the Retained Earnings account is as follows:
A. Retained Earnings (beginning) – Net Income = Retained Earnings (ending)
B. Retained Earnings (beginning) + Net Income + Dividends = Retained Earnings (ending)
C. Retained Earnings (beginning) – Net Income – Dividends = Retained Earnings (ending)
D. Retained Earnings (beginning) – Net Income + Dividends = Retained Earnings (ending)
E. Retained Earnings (beginning) + Net Income – Dividends = Retained Earnings (ending)
48. Any single event or transaction will have which of the following effect(s) on the balance sheet?
A. It increases an asset and increases either a liability or shareholders’ equity.
B. It decreases an asset and decreases either a liability or shareholders’ equity.
C. It increases one asset and decreases another asset.
D. It increases one liability or shareholders’ equity and decreases another liability or shareholders’ equity.
E. all of the above
49. Which of the following is/are true regarding the T-account?
A. Actual practice does not use this form of the account, except perhaps for memoranda or preliminary analyses
B. looks like the letter T, with a horizontal line bisected by a vertical line.
C. satisfies the requirement of an account and is easy to use.
D. all of the above
E. none of the above
50. Which of the following is/are true regarding the T-account?
A. the name or title of the account appears on the horizontal line.
B. dates and other information can appear in T-accounts.
C. one side of the space formed by the vertical line records increases in the item and the other side records decreases.
D. all of the above
E. none of the above
