CSUF ACCT 201A (HOFFMAN) FINAL
FINAL TEST 2026 QUESTIONS WITH
CORRECT ANSWERS GRADED A+
◍ entity.
Answer: a person, unit, organization or group
◍ proprietorship.
Answer: business owned by one person
◍ Greg Company recognized revenue on account. Which of the following
financial statements are affected by this accounting event?.
Answer: income statement (increase revenue)balance sheet (increase
asset)(not cashflow statement bc no cash flow is collected or paid)
◍ partnership.
Answer: business owned by two or more persons or entities
◍ Which of the following groups has the primary responsibility for
establishing generally accepted accounting principles for business entities in
the United States?.
Answer: Financing Accounting Standards Board
◍ Which resource providers lend financial resources to a business with the
expectation of repayment with interest?consumerscreditorsinvestors owners.
Answer: creditors
◍ corporation.
Answer: business owned by one or more entities who own shares of stock in
the business. Separate entity than it's owners, limited liability
◍ assets=.
Answer: liabilities + stockholder's equity
,◍ how to find net income.
Answer: revenue - expenses
◍ Paying cash to settle a salaries payable obligation will affect which section
of the statement of cash flows?.
Answer: operating activités
◍ Financial accounting standards are known collectively as GAA
P. What does that acronym stand for?.
Answer: Generally Accepted Accounting Principles
◍ how to find ending retained earnings.
Answer: beginning retained earnings + net income - dividends
◍ how to find total stockholder's equity.
Answer: retained earnings + common stock
◍ the 4 financial statements should be prepared in which order.
Answer: income statement, statement of retained earnings, balance sheet,
statement of cash flows
◍ Which of the following accounts normally has a debit balance?prepaid
insuranceunearned service revenueaccounts payablecommon stock.
Answer: prepaid insurance
◍ un earned revenue and accounts payable are what?.
Answer: liabilities (normally credit)
◍ financial accounting is principally concerned with:.
Answer: reporting to external users
◍ What is the term that is used to describe the difference between the total
debit and credit amounts in a T-account?.
Answer: account balance
◍ Which of the following statements about debits is false?debits increase
assetsdebits decrease liabilities debits increase expensesdebits increase
liabilities.
, Answer: debits increase liabilities
◍ Which of the following would not be considered as primarily a
merchandising business?Abercrombie and fitchsams clubamazonregal
cinemas.
Answer: regal cinemas
◍ Which of the following is considered a product cost?Utility expense for the
current monthSalaries paid to the employees of a
merchandiserTransportation cost on goods received from
suppliersTransportation cost on goods shipped to customers.
Answer: Transportation cost on goods received from suppliers (increases the
merchandise inventory account) (component of cost of goods sold on the
income statement when the inventory is sold)
◍ what do liquidity ratios measure.
Answer: the short term ability of a company to pay it's obligations as they
are due and meet unexpected cash needs
◍ JE: Debit) COGS 6,000 credit) merchandise inventory 6,000what is effect
on company's financial statements?.
Answer: stockholders equity decreases (cogs is assets decrease (assets=
debit account )
◍ At a time of declining prices, which inventory cost flow method will result
in the highest ending inventory?.
Answer: LIFO (LIFO will result in the lowest cost of goods sold (most
recent purchases) and the highest ending inventory (earliest purchases)
◍ When prices are rising, which method of inventory, if any, will result in the
lowest relative net cash outflow (including the effects of taxes, if any)?.
Answer: LIFO (When prices are rising, LIFO will result in the highest cost
of goods sold (most recent purchases), and therefore will result in the lowest
income tax expense. Income tax expense is the only cash flow affected by
the choice of an inventory cost flow method.)
◍ calculate current ratio.
FINAL TEST 2026 QUESTIONS WITH
CORRECT ANSWERS GRADED A+
◍ entity.
Answer: a person, unit, organization or group
◍ proprietorship.
Answer: business owned by one person
◍ Greg Company recognized revenue on account. Which of the following
financial statements are affected by this accounting event?.
Answer: income statement (increase revenue)balance sheet (increase
asset)(not cashflow statement bc no cash flow is collected or paid)
◍ partnership.
Answer: business owned by two or more persons or entities
◍ Which of the following groups has the primary responsibility for
establishing generally accepted accounting principles for business entities in
the United States?.
Answer: Financing Accounting Standards Board
◍ Which resource providers lend financial resources to a business with the
expectation of repayment with interest?consumerscreditorsinvestors owners.
Answer: creditors
◍ corporation.
Answer: business owned by one or more entities who own shares of stock in
the business. Separate entity than it's owners, limited liability
◍ assets=.
Answer: liabilities + stockholder's equity
,◍ how to find net income.
Answer: revenue - expenses
◍ Paying cash to settle a salaries payable obligation will affect which section
of the statement of cash flows?.
Answer: operating activités
◍ Financial accounting standards are known collectively as GAA
P. What does that acronym stand for?.
Answer: Generally Accepted Accounting Principles
◍ how to find ending retained earnings.
Answer: beginning retained earnings + net income - dividends
◍ how to find total stockholder's equity.
Answer: retained earnings + common stock
◍ the 4 financial statements should be prepared in which order.
Answer: income statement, statement of retained earnings, balance sheet,
statement of cash flows
◍ Which of the following accounts normally has a debit balance?prepaid
insuranceunearned service revenueaccounts payablecommon stock.
Answer: prepaid insurance
◍ un earned revenue and accounts payable are what?.
Answer: liabilities (normally credit)
◍ financial accounting is principally concerned with:.
Answer: reporting to external users
◍ What is the term that is used to describe the difference between the total
debit and credit amounts in a T-account?.
Answer: account balance
◍ Which of the following statements about debits is false?debits increase
assetsdebits decrease liabilities debits increase expensesdebits increase
liabilities.
, Answer: debits increase liabilities
◍ Which of the following would not be considered as primarily a
merchandising business?Abercrombie and fitchsams clubamazonregal
cinemas.
Answer: regal cinemas
◍ Which of the following is considered a product cost?Utility expense for the
current monthSalaries paid to the employees of a
merchandiserTransportation cost on goods received from
suppliersTransportation cost on goods shipped to customers.
Answer: Transportation cost on goods received from suppliers (increases the
merchandise inventory account) (component of cost of goods sold on the
income statement when the inventory is sold)
◍ what do liquidity ratios measure.
Answer: the short term ability of a company to pay it's obligations as they
are due and meet unexpected cash needs
◍ JE: Debit) COGS 6,000 credit) merchandise inventory 6,000what is effect
on company's financial statements?.
Answer: stockholders equity decreases (cogs is assets decrease (assets=
debit account )
◍ At a time of declining prices, which inventory cost flow method will result
in the highest ending inventory?.
Answer: LIFO (LIFO will result in the lowest cost of goods sold (most
recent purchases) and the highest ending inventory (earliest purchases)
◍ When prices are rising, which method of inventory, if any, will result in the
lowest relative net cash outflow (including the effects of taxes, if any)?.
Answer: LIFO (When prices are rising, LIFO will result in the highest cost
of goods sold (most recent purchases), and therefore will result in the lowest
income tax expense. Income tax expense is the only cash flow affected by
the choice of an inventory cost flow method.)
◍ calculate current ratio.
