ACCT 102 Final Exam with All Correct & 100% Verified
Answers |Actual Complete Exam |Already Graded A+
Which inventory system updates on a continuous basis with COGS being readily available and
reported on the income statement ✔Correct Answer-Perpetual system
Which inventory system is updated at year end only and COGS are calculated after a physical stock
take ✔Correct Answer-Periodic system
What are the four inventory cost flow methods? ✔Correct Answer-1. Specific identification
approach
2. First-in, First-out approach
3. Last-in, First-out approach
4. Average cost approach
What are the most appropriate inventory system and inventory cost flow methods for the following
businesses?
a) Co-op bookshop
b) Local petrol station
c) Antique shop
d) Bottled juice in a fruit bar
e) Jewellery ✔Correct Answer-a) perpetual & FIFO
b) perpetual & moving average cost
c) periodic & specific identification approach
d) perpetual & FIFO
e) either & specific identification approach
Under inflation which yields higher profits? LIFO or FIFO? ✔Correct Answer-FIFO
Why is FIFO a better valuation approach? ✔Correct Answer-It provides a measure of inventory
value that is closer to the market value
Inventory Turnover equation ✔Correct Answer-COGS/Average Inventory
Inventory Turnover Period equation ✔Correct Answer-365/Inventory Turnover
Closing inventory equation ✔Correct Answer-Opening inventory + purchases - COGS
What factors result in the bank balance not matching the bank T-account ✔Correct Answer-- bank
fees and interest
- unpresented cheques issued by the firm
- deposits in transit
- errors
What is corporate governance? ✔Correct Answer-the system of governing a company so that the
interests of corporate owners and other stakeholders are protected
What does ERP stand for?
,A. enterprise resource planning
B. entry resourceful pages
C. entry regular planner
D. none of the above ✔Correct Answer-A
What is a subsidiary ledger? ✔Correct Answer-a group of similar accounts whose combined
balances equal the balance in a specific general ledger account. e.g Accounts receivable
What is a special journal? ✔Correct Answer-a journal used to record only one kind of transaction
e.g sales journal
What are the characteristics of a legal entity? ✔Correct Answer-- can enter agreements or
contracts
- assume obligations
- incur and pay debts
- sue and be sued
- accountable for illegal activities
What are some examples of legal entities that are not accounting entities ✔Correct Answer--
Individuals who are adult and sane
- The state
- Criminal organisations
What can an accounting entity do? ✔Correct Answer-- engage in economic activity
- control economic resources for which accounting records exist
- is distinct from the dealings of those who control it
What are some accounting entities that are NOT legal entities? ✔Correct Answer-- Sole
proprietorships
- A company division/ department
- Some government entities e.g NZ DHBs
What are some both legal and accounting entities? ✔Correct Answer-- for-profit companies
- non-profit companies
- trusts
What is limited liability? ✔Correct Answer-The condition by which shareholders are legally
responsible for the debts of a company only to the extent of the nominal value of their shares.
What is unlimited liability? ✔Correct Answer-Complete legal responsibility for all debts and
damages arising from doing business
How is profit referred for non-profit entities? ✔Correct Answer-As surplus or deficit
Who are sole traders? ✔Correct Answer-People who start in business on their own without
registering as a company.
How do sole traders collect profits from their business?
a) through a salary
b) through wages
c) through drawings
, d) through making withdraws against profit ✔Correct Answer-d)
What is a partnership? ✔Correct Answer-An entity structure where 2 or more individuals co-
operate for the sake of generating a financial profit
Are partnerships accounting or legal entities or both? ✔Correct Answer-Accounting entities
Do partnerships have limited liability? ✔Correct Answer-No- they have unlimited liability
What is the difference between joint and several liability for partnerships? ✔Correct Answer-Joint:
each partner is responsible for the business actions of other partners so each partner may be call
upon to satisfy claims by creditors
Several: each partner responds individually for claims against the business (one's negligence makes
the other personally liable)
What did the Partnership Act 2008 allow? ✔Correct Answer-For there to be limited partners with
limited liability in partnerships
What can a limited partner NOT do? ✔Correct Answer-Make decisions in management
What does profit appropriation mean for partnerships? ✔Correct Answer-the profit that is split
between partners must be allocated to separate T-accounts to identify each partner.
How is drawings of inventory recorded? ✔Correct Answer-Dr Drawings
Cr Inventory
Cr GST
Are salary allowances made before or after the profit is appropriated for a partnership? Where is this
recorded? ✔Correct Answer-Before, at the end of the income statement
What does the partner's equity ledger include? ✔Correct Answer-Any drawings, salary allowances
and profit sharing that is done throughout the financial year
True or False: A partnership is not a legal entity. ✔Correct Answer-True
True or False: A partnership obtains further to a legally binding arrangement among partners.
✔Correct Answer-True
True or False: For a legally binding arrangement among partners to exist, a written document must
be executed by the partners and then publically registered. ✔Correct Answer-False
True or False: In a typical New Zealand partnership, each partner takes responsibility for the business
actions of all other partners. ✔Correct Answer-True
True or False: Once the partnership's profits are calculated by the accountant at the end of the fiscal
year, the partnership becomes liable for paying taxes to the IRD. ✔Correct Answer-False
True or False: As with all business entities, a partnership is assumed to have an unlimited life.
✔Correct Answer-False
Answers |Actual Complete Exam |Already Graded A+
Which inventory system updates on a continuous basis with COGS being readily available and
reported on the income statement ✔Correct Answer-Perpetual system
Which inventory system is updated at year end only and COGS are calculated after a physical stock
take ✔Correct Answer-Periodic system
What are the four inventory cost flow methods? ✔Correct Answer-1. Specific identification
approach
2. First-in, First-out approach
3. Last-in, First-out approach
4. Average cost approach
What are the most appropriate inventory system and inventory cost flow methods for the following
businesses?
a) Co-op bookshop
b) Local petrol station
c) Antique shop
d) Bottled juice in a fruit bar
e) Jewellery ✔Correct Answer-a) perpetual & FIFO
b) perpetual & moving average cost
c) periodic & specific identification approach
d) perpetual & FIFO
e) either & specific identification approach
Under inflation which yields higher profits? LIFO or FIFO? ✔Correct Answer-FIFO
Why is FIFO a better valuation approach? ✔Correct Answer-It provides a measure of inventory
value that is closer to the market value
Inventory Turnover equation ✔Correct Answer-COGS/Average Inventory
Inventory Turnover Period equation ✔Correct Answer-365/Inventory Turnover
Closing inventory equation ✔Correct Answer-Opening inventory + purchases - COGS
What factors result in the bank balance not matching the bank T-account ✔Correct Answer-- bank
fees and interest
- unpresented cheques issued by the firm
- deposits in transit
- errors
What is corporate governance? ✔Correct Answer-the system of governing a company so that the
interests of corporate owners and other stakeholders are protected
What does ERP stand for?
,A. enterprise resource planning
B. entry resourceful pages
C. entry regular planner
D. none of the above ✔Correct Answer-A
What is a subsidiary ledger? ✔Correct Answer-a group of similar accounts whose combined
balances equal the balance in a specific general ledger account. e.g Accounts receivable
What is a special journal? ✔Correct Answer-a journal used to record only one kind of transaction
e.g sales journal
What are the characteristics of a legal entity? ✔Correct Answer-- can enter agreements or
contracts
- assume obligations
- incur and pay debts
- sue and be sued
- accountable for illegal activities
What are some examples of legal entities that are not accounting entities ✔Correct Answer--
Individuals who are adult and sane
- The state
- Criminal organisations
What can an accounting entity do? ✔Correct Answer-- engage in economic activity
- control economic resources for which accounting records exist
- is distinct from the dealings of those who control it
What are some accounting entities that are NOT legal entities? ✔Correct Answer-- Sole
proprietorships
- A company division/ department
- Some government entities e.g NZ DHBs
What are some both legal and accounting entities? ✔Correct Answer-- for-profit companies
- non-profit companies
- trusts
What is limited liability? ✔Correct Answer-The condition by which shareholders are legally
responsible for the debts of a company only to the extent of the nominal value of their shares.
What is unlimited liability? ✔Correct Answer-Complete legal responsibility for all debts and
damages arising from doing business
How is profit referred for non-profit entities? ✔Correct Answer-As surplus or deficit
Who are sole traders? ✔Correct Answer-People who start in business on their own without
registering as a company.
How do sole traders collect profits from their business?
a) through a salary
b) through wages
c) through drawings
, d) through making withdraws against profit ✔Correct Answer-d)
What is a partnership? ✔Correct Answer-An entity structure where 2 or more individuals co-
operate for the sake of generating a financial profit
Are partnerships accounting or legal entities or both? ✔Correct Answer-Accounting entities
Do partnerships have limited liability? ✔Correct Answer-No- they have unlimited liability
What is the difference between joint and several liability for partnerships? ✔Correct Answer-Joint:
each partner is responsible for the business actions of other partners so each partner may be call
upon to satisfy claims by creditors
Several: each partner responds individually for claims against the business (one's negligence makes
the other personally liable)
What did the Partnership Act 2008 allow? ✔Correct Answer-For there to be limited partners with
limited liability in partnerships
What can a limited partner NOT do? ✔Correct Answer-Make decisions in management
What does profit appropriation mean for partnerships? ✔Correct Answer-the profit that is split
between partners must be allocated to separate T-accounts to identify each partner.
How is drawings of inventory recorded? ✔Correct Answer-Dr Drawings
Cr Inventory
Cr GST
Are salary allowances made before or after the profit is appropriated for a partnership? Where is this
recorded? ✔Correct Answer-Before, at the end of the income statement
What does the partner's equity ledger include? ✔Correct Answer-Any drawings, salary allowances
and profit sharing that is done throughout the financial year
True or False: A partnership is not a legal entity. ✔Correct Answer-True
True or False: A partnership obtains further to a legally binding arrangement among partners.
✔Correct Answer-True
True or False: For a legally binding arrangement among partners to exist, a written document must
be executed by the partners and then publically registered. ✔Correct Answer-False
True or False: In a typical New Zealand partnership, each partner takes responsibility for the business
actions of all other partners. ✔Correct Answer-True
True or False: Once the partnership's profits are calculated by the accountant at the end of the fiscal
year, the partnership becomes liable for paying taxes to the IRD. ✔Correct Answer-False
True or False: As with all business entities, a partnership is assumed to have an unlimited life.
✔Correct Answer-False
