Accounting True or False Questions

1.The periodic inventory system relies on a physical count of merchandise to determine the end of period balance sheet amount. Question 1 options: 1) True 2) False 2.Sales Returns and Allowances is described as a contra-revenue account. Question 2 options: 1) True 2) False 3. Under the perpetual inventory system, the ending merchandise inventory balance is closed at the same time as Cost of Goods Sold. Question 3 options: 1) True 2) False 4. For accounting information to be useful, it must be both relevant and reliable Question 10 options: 1) True 2) False 5. Full disclosure of all important facts aids in overcoming the limitations of accounting reports Question 11 options: 1) True 2) False 6. Consistency in accounting means that a company uses the same generally accepted accounting principles from one accounting period to the next accounting periodQuestion 12 options: 1) True 2) False 7. It is the responsibility of management to insist upon honest financial reporting.Question 13 options: 1) True 2) False 8. The intentional preparation of misleading financial statements is referred to asfraudulent financial reporting.Question 14 options: 1) True 2) False 9. Cost of goods sold and selling expenses would appear in the same section of a single-step income statement.Question 15 options: 1) True 2) False 10. Asset turnover measures how efficiently assets are used to produce sales.Question 16 options: 1) True 2) False 11. A company with a current ratio of 1.0 is considered more liquid than one with a current ratio of 2.0.Question 17 options: 1) True 2) False 12. A company with a low debt to equity ratio is in a more vulnerable position during poor economic times than a company with a high debt to equity ratio.Question 18 options: 1) True 2) False 13. An effective system of internal control centralizes functions in a single, capable individual.Question 25 options: 1) True 2) False 14. The separation of duties is easier to accomplish in small companies than in large ones.Question 26 options: 1) True 2) False 15. Interest earned on a checking account discovered during the bank reconciliation process should be added to the balance per books to get an adjusted book balance.Question 31 options: 1) True 2) False 16. Upon completing a bank reconciliation, one would prepare a journal entry to correct the outstanding checks identified.Question 32 options: 1) True 2) False 17. Because bad debt losses are incurred to generate sales, they should be charged against the sales that they helped generate.Question 35 options: 1) True 2) False 18. Bad-debt losses are a cost of selling on creditQuestion 36 options: 1) True 2) False 19. The allowance method of handling bad debts violates the matching principle.Question 37 options: 1) True 2) False 20. Allowance for Uncollectible Accounts is a contra-asset account.Question 38 options: 1) True 2) False 21.Under the accounts receivable aging method, the balance in Allowance for Uncollectible Accounts must be in considered prior to adjusting for estimated uncollectible accounts.Question 39 options: 1) True 2) False 22. The direct write-off method of recognizing uncollectible accounts is not in accordance with good accounting practice.Question 40 options: 1) True 2) False