Introduction to Financial Accounting Coursera Quiz Answers

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Introduction to Financial Accounting Week 01 Quiz Answers

Quiz : Homework #1

Q1. Who is responsible for preparing a company’s financial statements?

• The audit committee of the Board of Directors
• The company’s external auditor
• The Financial Accounting Standards Board
• Company management
• The company’s tax department

Q2. Which of the following items reduces Net Income? (check all that apply)

• Stockholders’ Equity
• Revenues
• Expenses
• Liabilities
• Dividends

Q3. What are Ending Retained Earnings in the table below?

Total Assets	300
Total Liabilities	120
Total Stockholder’s Equity
Beginning Retained Earnings	30
Ending Retained Earnings	?
Dividends	10
Revenues	190
Expenses	140
Net Income
Cash	50

• 20
• Not enough information
• 50
• 70
• -20

Q4. Which of the following transactions violates the balance sheet equation? (check all that apply)

• Reduce cash and reduce an expense
• Increase retained earnings and increase a liability
• Increase a liability and increase a revenue
• Increase cash and reduce contributed capital
• Increase an expense and reduce a liability

Q5. Which of the following are liabilities? (check all that apply)

• Retained Earnings
• Employment Contracts
• Prepaid Rent
• Salaries Payable
• Common Stock

Q6. Which of the following accounts would be increased with a Debit? (check all that apply)

• Advertising Expense
• Cash
• Accounts Payable
• Land
• Prepaid Insurance

Q7. Which of these journal entries represent paying cash to reduce a liability? (check all that apply)

• Dr.  Cash               300

     Cr.  Accounts Payable     300

• Dr. Cash                   1000

    Cr.   Notes Payable          1000

• Dr. Retained Earnings     500

     Cr.  Cash                         500

• Dr. Income Taxes Payable       500

    Cr.      Cash                                  500

• Dr.  Land           100

    Cr.  Cash           100

Q8. Which journal entry reflects the following transaction?:

BOC bought a $300,000 building with $50,000 cash and a mortgage taken from a bank.

• Dr.  Building           300,000

      Cr.  Mortgage      250,000

      Cr.  Cash              50,000

• Dr.  Mortgage      250,000

Dr.  Cash              50,000

        Cr.  Building           300,000

• Dr.  Cash              50,000

        Cr.  Building           300,000

• Dr.  Building           300,000

      Cr. Cash                 50,000

• Dr.  Building           300,000

      Cr. Cash                 300,000

Q9. Which journal entry reflects the following transaction?:

BOC bought $10,000 of inventory on account.

• Dr. Accounts Receivable          10,000

   Cr.  Inventory                                  10,000

• Dr. Inventory          10,000

   Cr. Accounts Payable  10,000

• Dr. Accounts Payable          10,000

   Cr.  Inventory                                  10,000

• Dr. Inventory          10,000

   Cr. Cash                         10,000

• Dr. Inventory          10,000

    Cr. Accounts Receivable 10,000

Q10. Which journal entry reflects the following transaction?:

BOC paid $3,000 upfront for next year’s rent.

• Dr.  Cash                 3,000

    Cr. Prepaid Rent         3,000

• Dr.  Rent Revenue       3,000

    Cr. Cash                       3,000

• Dr.  Cash             3,000

    Cr.  Rent Expense      3,000

• Dr. Rent Expense        3,000

   Cr.  Cash                     3,000

• Dr.  Prepaid Rent            3,000

    Cr.   Cash                      3,000

Introduction to Financial Accounting Week 02 Quiz Answers

Quiz : Homework #2

Q1. Which of these transactions would produce $10,000 of revenue in December? (check all that apply)

• BOC Realty leases space to a tenant for December and January. The tenant pre-paid the $20,000 rent for the two months in November.
• BOC Realty leases space to a tenant for December and the tenant pays the $10,000 rent in cash in December.
• BOC Bank receives a check for $10,000 in December for November’s interest amount.
• BOC Bank is owed $10,000 of interest on a loan for December and receives the payment in January.
• BOC Realty leases space to a tenant for December and sends a bill for the $10,000 rent to be paid in January.

Q2. Which of these transactions would produce $10,000 of expenses in December? (check all that apply)

• BOC sells batteries costing $8,000 in December for $10,000 cash.
• BOC signs a contract in December to buy $10,000 of copper.
• BOC uses copper to make batteries at a total cost of $10,000 in December.
• BOC sells batteries costing $10,000 in December for $12,000 cash.
• BOC buys $10,000 of copper in December.

Q3. Which journal entry reflects the following transaction?:

BOC receives a $2,000 cash deposit from a customer for custom goods that will be delivered next year.

• Dr. Cash     2,000

   Cr. Revenue   2,000

• Dr.  Cash           2,000

   Cr.  Advances from Customers     2,000

• Dr.  Deposits    2,000

   Cr.  Future Revenue    2,000

• Dr.  Advances from Customers      2,000

   Cr.  Cash                                          2,000

• Dr.  Cash         2,000

   Cr.  Inventory       2,000

Q4. Which journal entry(s) reflects the following transaction?:

BOC received $10,000 of cash from a customer who took delivery of goods that originally cost BOC $8,000 to acquire.

• Dr. Cash                       10,000

    Cr.  Revenue                    10,000

Dr.  Cost of Goods Sold   8,000

   Cr.  Inventory                     8,000 

• Dr. Cash                       10,000

    Cr.  Revenue                    10,000

Dr.  Accounts Payable   8,000

   Cr.  Inventory                     8,000 

• Dr.   Cash          10,000

    Cr.  Inventory         10,000

• Dr.   Cash   10,000

    Cr.  Inventory      8,000

    Cr.  Revenue       2,000

• Dr.   Cash          10,000

    Cr.  Revenue         10,000

Q5. How much annual depreciation expense would be recognized for a truck that originally cost $30,000 and has an estimated useful life of 5 years with a $5,000 salvage value?

• $10,000
• $7,000
• $3,333
• $6,000
• $5,000

Q6. Which journal entry reflects the adjusting entry needed on December 31?:

It is December 31, the end of the fiscal year. During December, employees earned $800,000 in salaries, but paychecks do not get issued until January 2.

• Dr.  Salary Expense      800,000

   Cr.   Cash                          800,000

• Dr.  Salaries Payable      800,000

   Cr.   Cash                          800,000

• No entry is needed.

• Dr.  Salary Expense      800,000

   Cr.   Salaries Payable      800,000

• Dr.  Cash     800,000

   Cr.   Salaries Payable      800,000

Q7. Which journal entry reflects the adjusting entry needed on December 31?:

Last year, BOC purchased software for $10,000. The expected life of the software is 2 years and it has no expected salvage value. Now, it is December 31, the end of the fiscal year. No other entries were recorded for this software during the year.

• Dr.  Software Amortization Expense     5,000

     Cr.  Software                                                    5,000

• Dr. Software Amortization Expense 5,000

Cr. PP&E 5,000

• No entry needed.

• Dr.  Software Amortization Expense     5,000

     Cr.  Software Revenue                            5,000

• Dr.  Software Amortization Expense     5,000

     Cr.  Cash                                                    5,000

Q8. Which journal entry reflects the adjusting entry needed on December 31?:

In November, BOC received a $5,000 cash deposit from a customer for custom-build goods that will be delivered in January (BOC recorded an entry for this $5,000 in November). Now, it is December 31, the end of the fiscal year.

• Dr.   Unearned Revenue       5,000

   Cr.  Revenue                                    5,000

• Dr.   Unearned Revenue       5,000

   Cr.  Inventory                                    5,000

• Dr.   Cash       5,000

   Cr.  Revenue               5,000

• No entry needed.

• Dr.   Advances from Customers   5,000

   Cr.  Revenue                                        5,000

Q9. Which item would not appear on a Balance Sheet?

• Retained Earnings
• Interest Payable
• Gross Profit
• Prepaid expenses
• Accounts Receivable

Q10. Which of the following are permanent accounts? (check all that apply)

• Unearned Revenue
• Retained Earnings
• Revenue
• Common Stock
• Cost of Goods Sold

Introduction to Financial Accounting Week 03 Quiz Answers

Quiz : Homework #3

Q1. Which of the following would be a cash flow from operating activities? (check all that apply)

• Purchases of equipment
• Amortization of a patent
• Loss on sale of equipment
• Collections from customers
• Payments for salaries and wages

Q2. Which of the following would be a cash flow from investing activities? (check all that apply)

• Proceeds from selling equipment
• Purchases of inventory
• Depreciation on a building
• Proceeds from issuing stock
• Payments to acquire a company

Q3. A company has the following cash flows:

Cash from operations (30)

Cash from investing activities (45)

Cash from financing activities 90

Which growth stage best describes this pattern of cash flows?

• Fossilized
• Early growth
• Mature
• Start-up
• Decline

Q4. A company bought $50,000 of inventory for $20,000 cash, with the balance due to the supplier in 30 days. What is the operating cash flow in this transaction?

• ($70,000)
• ($20,000)
• ($30,000)
• $0
• ($50,000)

Q5. Which of the following would be shown as a positive number in the Operating section of the SCF under the indirect method? (check all that apply

• Depreciation on a building
• Proceeds from a mortgage
• Decrease in Inventory
• Increase in Income Taxes Payable
• Gain on sale of equipment

Q6. A company has Net Income of $20, which included $4 of depreciation expense. There were no other noncash expenses in Net Income and there were no gains or losses. Accounts receivable was $40 at the beginning of the year and $25 at the end of the year. Accounts Payable was $25 at the beginning of the year and $15 at the end of the year. Inventory was $22 at the beginning of the year and $27 at the end of the year. All other balance sheet accounts were unchanged over the year. What was the company’s Cash Flow from Operating Activities?

• $54
• $4
• $16
• $44
• $24

Q7. A company put together a preliminary version of its financial statements. Its Net Income was $200, its Depreciation Expense was $40, and its Cash Flow from Operations was $90. The accountant found an error in computing straight-line Depreciation Expense. It should have been $50. What is Cash from Operations after fixing this mistake? (you can ignore taxes)

• $90
• $80
• $0
• $250
• $100

Q8. A company sold PP&E for $200 cash. Prior to the sale, the net book value of the PP&E on the financial statements was $240. Thus, the company recorded a Loss on Sale of Equipment of $40 in Net Income. What is the operating cash flow in this transaction?

• $200
• $40
• $160
• $240
• $0

Q9. Which of the following transactions would result in the change in Inventory on the SCF being a different number than the change in Inventory on the Balance Sheet? (check all that apply)

• Some of the inventory was purchased on account
• Some of the inventory was stolen by employees
• Some of the inventory was sold for cash
• Some of the inventory is held by subsidiaries in countries that use a different currency
• Some of the inventory came in the acquisition of another company

Q10. A company had Revenue of $1000, Depreciation and Amortization Expense of $100, Interest Expense of $100, and Tax Expense of $50. All other Expenses were $500. What was the company’s EBITDA?

• $1000
• $500
• $250
• $300
• $400

Introduction to Financial Accounting Week 04 Quiz Answers

Quiz 1 : Final Exam, Part 1

Q1. A company delivered $10,000 of goods to a customer that agreed to pay cash within 30 days. The goods had cost $8,000 to manufacture.

Which of the following items would be increased by this sales transaction? (check all that apply)

• Revenue
• Total Assets
• Accounts Receivable
• Inventory
• Total Liabilities

Q2. A company took delivery of $50,000 of new inventory and agreed to pay cash to the supplier within 30 days.

Which of the following items would be increased by this inventory purchase transaction? (check all that apply)

• Current Liabilities
• Total Stockholders’ Equity
• Cost of Goods Sold
• Inventory
• Cash from Operations

Q3. A company collected $100,000 cash from a customer who both received and was billed for the goods last quarter.

Which of the following items would be increased by this cash collection transaction? (check all that apply)

• Revenue
• Accounts Receivable
• Total Stockholders’ Equity
• Cash from Operations
• Total Assets

Q4. A company collected $10,000 cash from a customer as a deposit for goods that will be shipped next quarter.

Which of the following items would be increased by this cash collection transaction? (check all that apply)

• Total Assets
• Accounts Receivable
• Cash from Operations
• Total Liabilities
• Revenue

Q5. A company received $100,000 cash from issuing 10,000 shares of $4 par value stock.

Which of the following items would be increased by this stock issuance transaction? (check all that apply)

• Total Stockholder’s Equity
• Cash from Financing
• Dividends
• Long-term Liabilities
• Additional Paid in Capital

Q6. A company received $75,000 cash from a bank loan that must be repaid in three years.

Which of the following items would be increased by this bank loan transaction? (check all that apply)

• Cash from Investing
• Revenue
• Notes Payable
• Interest Payable
• Current Assets

Q7. A company declared $500,000 of dividends that will be paid two months from now.

Which of the following items would be increased by this dividend declaration transaction? (check all that apply)

• Total Liabilities
• Retained Earnings
• Net Income
• Cash from Financing
• Dividend Expenses

Q8. A company paid $50,000 to its insurance company for fire insurance coverage over the next year.

Which of the following items would be increased by this insurance prepayment transaction? (check all that apply)

• Total Stockholders’ Equity
• Prepaid Insurance
• Current Assets
• Insurance Expense
• Unearned Revenue

Q9. At the end of the quarter, a company did an adjusting entry to record the fact that $1,000 of Prepaid Advertising had been used up during the quarter.

Which of the following items would be increased by this advertising adjusting entry? (check all that apply)

• Prepaid Advertising
• Total Liabilities
• Cash from Operations
• Advertising Expense
• Cost of Goods Sold

Q10. A company borrowed $500,000 cash from a bank and used it to purchase $500,000 of new manufacturing equipment.

Which of the following items would be increased by the bank loan and equipment purchase transactions? (check all that apply)

• Equipment
• Cash from Financing
• Depreciation
• Cash from Investing
• Total Liabilities

Q11. At the end of the quarter, a company did an adjusting entry to record $5,000 of depreciation on the fleet of automobiles used by the sales force.

Which of the following items would be increased by this depreciation adjusting entry? (check all that apply)

• Total Assets
• Cash from Operations
• Accumulated Depreciation
• SG&A Expense
• Total Liabilities

Q12. A company sold a piece of manufacturing equipment for $30,000 cash. The equipment had been listed on the balance sheet at a net book value of $25,000, so the company recorded a gain on sale of equipment of $5,000.

Which of the following items would be increased by this equipment sale transaction? (check all that apply)

• Equipment
• Cash from Operations
• Cash from Investing
• Total Assets
• Net Income

Quiz 2 : Final Exam, Part 2

Q1. During the quarter ended 3/31/2015, Clarke Biscuits Inc. collected $100 of cash from customers, paid $60 of cash to suppliers, paid $30 of cash to employees and other creditors, and recorded a $5 loss on sale of equipment. There were no other cash flows related to operating activities.

What was Clarke’s Cash Flow from Operations during the quarter ended 3/31/2015?

• $15
• $20
• $10
• $25
• $5

Q2. During 2015, Rindal Vinyards Inc. had EBITDA of $1000, Depreciation and Amortization Expense of $200, Interest Expense of $100, and Tax Expense of $50. What was Rindal Vinyards’ Net Income in 2015?

• $650
• $750
• $1000
• $950
• $1250

Q3. Geller Florist Inc. had the following transactions during 2015:

Purchased a $200,000 warehouse with $50,000 cash and a $150,000 mortgage from a bank.

Raised $100,000 from selling new shares of stock to investors. The cash was used to buy land to grow tulips.

Sold an old building for $50,000 (and suffered a loss on sale of $5,000) and used the cash to buy a new truck.

What is the net impact of these transactions on Geller’s Cash from Financing Activities during 2015?

• $350,000
• $100,000
• $150,000
• $250,000
• $300,000

Q4. Stewart Export Co. had the following Statement of Cash Flows for the year ended 03/31/15:

($ millions)	Year ended 3/31/15
Net Income	1100
Depreciation	200
Loss on sale of equipment	400
Chg in Accounts Receivable	350
Chg in Inventory	(200)
Chg in Other Assets	100
Chg in Accounts Payable	(50)
Chg in Other Payables	150
Net Cash from Operations	2050
Capital Expenditures	(1200)
Sale of Equipment	700
Net Cash from Investing	(500)

What was the book value of the equipment Stewart sold during the year ended 03/31/15?

• $100
• $700
• $1,300
• $300
• $1,100

Q5. Little Scuba Pty had the following line item on its 12/31/2014 Balance Sheet:

	12/31/2014
Inventory	$20,000

Little Scuba’s Statement of Cash Flows had the following line item:

	2014
Change in Inventory	$6,000

Assume that the company made no acquisitions or divestitures and that all operations are in Australia. How much Inventory did Little Scuba have on 12/31/2013?

• $20,000
• $14,000
• $26,000
• $6,000
• $0

Q6. A new accountant, Costa Goodsold, put together a preliminary version of Medina Co.’s financial statements. Medina’s Net Income was $500, its Depreciation Expense was $100, and its Cash Flow from Operations was $70. The CEO found an error that Costa made in computing straight-line Depreciation Expense, which should have been $50. What is Medina’s Cash Flow from Operations after fixing this mistake? (you can ignore taxes)

• $120
• $70
• $170
• $450
• $20

Q7. Joe Doakes was reading the balance sheet of Gogoldze Inc. when he spilled coffee on it. After the coffee spill, the balance sheet looked like this:

($ millions)	12/31/2015
Cash	100
Accounts Receivable	245
Inventory	450
Other Current Assets	60
Current Assets	855
Net Property, Plant, & Equipment	1,160
Total Assets	2,015
Accounts Payable	160
Other Current Liabilities	250
Current Liabilities	410
Long-term Liabilities	900
Common Stock	50
Additional Paid-in Capital	300
Retained Earnings	coffee
Total Liabilities and SE	coffee

What was Gogoldze Inc.’s Retained Earnings at 12/31/2015?

• $355
• $3,675
• ($55)
• $550
• $960

Q8. Francisco Olivas of Olivas Medical Supply Company was reading the financial statements of Alvear Corp. to decide whether he wanted to try to acquire the company. He noticed some mistakes in the Alvear Corp. Income Statement:

($ millions)	Year ended 12/31/2015
Sales revenue	$1200
Gain on sale of equipment	200
Total Revenue	1400
Cost of Goods Sold	(800)
Gross Profit	600
SG&A Expense	(400)
Interest Expense	(50)
Operating Income	150
Interest Revenue	20
Pre-tax income	170
Income Tax Expense	(61)
Net Income	109

What is Alvear Corp.’s Operating Income for the year ended 12/31/2015 after correcting the mistakes?

• $200
• ($50)
• ($30)
• $0
• $170

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