Can someone please help me with the following practice questions?
1. Most business enterprises in the United States are
A) proprietorships and partnerships.
D) government units.
2. Which of the following would not be classified as a long-term liability?
A) Current maturities of long-term debt
B) Bonds payable
C) Mortgage payable
D) Lease liabilities
3. An intangible asset
A) derives its value from the rights and privileges it provides the owner.
B) is worthless because it has no physical substance.
C) is converted into a tangible asset during the operating cycle.
D) cannot be classified on the balance sheet because it lacks physical substance.
4. A current asset is
A) the last asset purchased by a business.
B) an asset which is currently being used to produce a product or service.
C) usually found as a separate classification in the income statement.
D) expected to be converted to cash or used in the business within a relatively short period of time.
5. One of the accounting concepts upon which adjustments for prepayments and accruals are based is
C) monetary unit.
D) economic entity.
6. Which is not an application of revenue recognition?
A) Recording revenue as an adjusting entry on the last day of the accounting period.
B) Accepting cash from an established customer for services to be performed over the next three months.
C) Billing customers on June 30 for services completed during June.
D) Receiving cash for services performed.
7. The custodian of a company asset should
A) have access to the accounting records for that asset.
B) be someone outside the company.
C) not have access to the accounting records for that asset.
D) be an accountant.
8. Internal auditors
A) are hired by CPA firms to audit business firms.
B) are employees of the IRS who evaluate the internal controls of companies filing tax returns.
C) evaluate the system of internal controls for the companies that employ them.
D) cannot evaluate the system of internal controls of the company that employs them because they are not independent.
9. The principle of establishing responsibility does not include
A) one person being responsible for one task.
B) authorization of transactions.
C) independent internal verification.
D) approval of transactions.
10. Which of the following statements is true?
A) Due to its liquid nature, cash is the easiest asset to steal.
B) A good system of internal control will ensure that employees will not be able to steal cash.
C) It takes two or more employees working together to be able to steal cash.
D) All statements are true.
11. The use of prenumbered checks is an example of
A) documentation procedures.
B) independent internal verification.
C) establishment of responsibility.
D) segregation of duties.
12. Which of the following income statement figures would probably be the best indicator of a company's future performance?
A) Total revenues
B) Income from operations
C) Net income
D) Gross profit
13. Which of the following would not be considered a change in accounting principle?
A) Changing the estimated percentage used in calculating bad debt expense.
B) Changing the inventory costing method used from FIFO to LIFO.
C) Changing from straight-line depreciation to double-declining balance depreciation.
D) Changing from the cost method of accounting for investments to the equity method.
The solution explains various multiple choice questions relating to accounting