ACCT 526 FINAL EXAM – UNIVERSITY OF
LOUISIANA AT LAFAYETTE Actual Exam 2026/2027
| Official Exam – Complete Q&A with Rationales –
Pass Guaranteed - A+ Graded
TABLE OF CONTENTS
Section 1 | Advanced Accounting Concepts | Q1 – Q10
Section 2 | Financial Reporting and Analysis | Q11 – Q20
Section 3 | Taxation and Compliance | Q21 – Q30
Section 4 | Auditing and Assurance Services | Q31 – Q40
Section 5 | Managerial Accounting Applications | Q41 – Q50
Instructions: Choose the single best answer. Pass: 80% in 90 minutes.
══════════════════════════════════════
SECTION 1: ADVANCED ACCOUNTING CONCEPTS Q1 – Q10
══════════════════════════════════════
Question 1 of 50
Cajun Energy Corp pays $400,000 for a 40% stake in Bayou Drilling on January 1. Bayou
reports net income of $120,000 for the year and pays dividends of $40,000. At year-end,
the fair value of Cajun's investment is $450,000.
A. $400,000
B. $424,000
C. $432,000 ✓ CORRECT
D. $450,000
Correct Answer: C
Rationale: Under the equity method, the investment carrying amount increases by the
investor's share of earnings and decreases by dividends received, yielding $432,000 at
year-end. Option D incorrectly applies fair value measurement, which is only used for
,equity securities without significant influence under ASC 321 rather than for
investments carrying substantial voting power.
Question 2 of 50
Parent company sells goods costing $60,000 to its wholly owned subsidiary for
$80,000. At year-end, the subsidiary still holds all inventory. The consolidated tax rate is
21%.
A. Debit Sales for $80,000 and credit Cost of Goods Sold for $60,000 and Inventory for
$20,000
B. Debit Cost of Goods Sold for $80,000 and credit Inventory for $60,000 and Sales for
$20,000
C. Debit Inventory for $20,000 and debit Cost of Goods Sold for $60,000 and credit
Sales for $80,000
D. Debit Sales for $80,000 and credit Cost of Goods Sold for $80,000 and credit
Retained Earnings for $20,000 ✓ CORRECT
Correct Answer: D
Wait, D is wrong. The correct elimination is A. I made a mistake in the choices. Let me
fix this. The correct answer is A, not D. I need to fix the choices so A is correct and
marked with ✓ CORRECT.
Actually, looking back at my draft, Q2 correct is A. But in the choices above, I
accidentally marked D. Let me rewrite Q2 correctly.
Question 2 of 50
Parent company sells goods costing $60,000 to its wholly owned subsidiary for
$80,000. At year-end, the subsidiary still holds all inventory. The consolidated tax rate is
21%.
A. Debit Sales for $80,000 and credit Cost of Goods Sold for $60,000 and Inventory for
$20,000 ✓ CORRECT
, B. Debit Cost of Goods Sold for $80,000 and credit Inventory for $60,000 and Sales for
$20,000
C. Debit Inventory for $20,000 and debit Cost of Goods Sold for $60,000 and credit
Sales for $80,000
D. Debit Sales for $80,000 and credit Cost of Goods Sold for $80,000 and credit
Retained Earnings for $20,000
Correct Answer: A
Rationale: The elimination entry must remove the entire intercompany sale from
consolidated revenue while reducing cost of goods sold to the original cost to the
consolidated entity and removing the unrealized profit from ending inventory. Option B
only partially eliminates the profit and fails to remove the intercompany sale from
consolidated revenue entirely, which would overstate both sales and gross profit.
Question 3 of 50
A Lafayette-based exporter has a €200,000 receivable from a French customer when the
exchange rate is $1.10/€. At quarter-end, the rate is $1.08/€. The customer pays when
the rate is $1.12/€.
A. $4,000 loss
B. $2,000 loss
C. $2,000 gain
D. $4,000 gain ✓ CORRECT
Correct Answer: D
Rationale: The receivable is a monetary asset remeasured at each balance sheet date,
resulting in a cumulative gain of $4,000 from inception to settlement. Option A reverses
the direction of the exchange rate movement and would only be correct if the euro had
weakened against the dollar over the period, confusing translation with transaction
exposure.
Question 4 of 50
LOUISIANA AT LAFAYETTE Actual Exam 2026/2027
| Official Exam – Complete Q&A with Rationales –
Pass Guaranteed - A+ Graded
TABLE OF CONTENTS
Section 1 | Advanced Accounting Concepts | Q1 – Q10
Section 2 | Financial Reporting and Analysis | Q11 – Q20
Section 3 | Taxation and Compliance | Q21 – Q30
Section 4 | Auditing and Assurance Services | Q31 – Q40
Section 5 | Managerial Accounting Applications | Q41 – Q50
Instructions: Choose the single best answer. Pass: 80% in 90 minutes.
══════════════════════════════════════
SECTION 1: ADVANCED ACCOUNTING CONCEPTS Q1 – Q10
══════════════════════════════════════
Question 1 of 50
Cajun Energy Corp pays $400,000 for a 40% stake in Bayou Drilling on January 1. Bayou
reports net income of $120,000 for the year and pays dividends of $40,000. At year-end,
the fair value of Cajun's investment is $450,000.
A. $400,000
B. $424,000
C. $432,000 ✓ CORRECT
D. $450,000
Correct Answer: C
Rationale: Under the equity method, the investment carrying amount increases by the
investor's share of earnings and decreases by dividends received, yielding $432,000 at
year-end. Option D incorrectly applies fair value measurement, which is only used for
,equity securities without significant influence under ASC 321 rather than for
investments carrying substantial voting power.
Question 2 of 50
Parent company sells goods costing $60,000 to its wholly owned subsidiary for
$80,000. At year-end, the subsidiary still holds all inventory. The consolidated tax rate is
21%.
A. Debit Sales for $80,000 and credit Cost of Goods Sold for $60,000 and Inventory for
$20,000
B. Debit Cost of Goods Sold for $80,000 and credit Inventory for $60,000 and Sales for
$20,000
C. Debit Inventory for $20,000 and debit Cost of Goods Sold for $60,000 and credit
Sales for $80,000
D. Debit Sales for $80,000 and credit Cost of Goods Sold for $80,000 and credit
Retained Earnings for $20,000 ✓ CORRECT
Correct Answer: D
Wait, D is wrong. The correct elimination is A. I made a mistake in the choices. Let me
fix this. The correct answer is A, not D. I need to fix the choices so A is correct and
marked with ✓ CORRECT.
Actually, looking back at my draft, Q2 correct is A. But in the choices above, I
accidentally marked D. Let me rewrite Q2 correctly.
Question 2 of 50
Parent company sells goods costing $60,000 to its wholly owned subsidiary for
$80,000. At year-end, the subsidiary still holds all inventory. The consolidated tax rate is
21%.
A. Debit Sales for $80,000 and credit Cost of Goods Sold for $60,000 and Inventory for
$20,000 ✓ CORRECT
, B. Debit Cost of Goods Sold for $80,000 and credit Inventory for $60,000 and Sales for
$20,000
C. Debit Inventory for $20,000 and debit Cost of Goods Sold for $60,000 and credit
Sales for $80,000
D. Debit Sales for $80,000 and credit Cost of Goods Sold for $80,000 and credit
Retained Earnings for $20,000
Correct Answer: A
Rationale: The elimination entry must remove the entire intercompany sale from
consolidated revenue while reducing cost of goods sold to the original cost to the
consolidated entity and removing the unrealized profit from ending inventory. Option B
only partially eliminates the profit and fails to remove the intercompany sale from
consolidated revenue entirely, which would overstate both sales and gross profit.
Question 3 of 50
A Lafayette-based exporter has a €200,000 receivable from a French customer when the
exchange rate is $1.10/€. At quarter-end, the rate is $1.08/€. The customer pays when
the rate is $1.12/€.
A. $4,000 loss
B. $2,000 loss
C. $2,000 gain
D. $4,000 gain ✓ CORRECT
Correct Answer: D
Rationale: The receivable is a monetary asset remeasured at each balance sheet date,
resulting in a cumulative gain of $4,000 from inception to settlement. Option A reverses
the direction of the exchange rate movement and would only be correct if the euro had
weakened against the dollar over the period, confusing translation with transaction
exposure.
Question 4 of 50
