ACCY 201 FINAL EXAM BARTON UPDATED
ACTUAL QUESTIONS AND VERIFIED
ANSWERS
⩥ proprietorship.
Answer: business owned by one person
⩥ partnership.
Answer: business owned by two or more persons or entities
⩥ 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
⩥ 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
⩥ financial accounting is principally concerned with:.
Answer: reporting to external users
⩥ 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
⩥ calculate current ratio.
Answer: current assets / current liabilites
⩥ calculate working capital.
Answer: current assets - current liabilites
⩥ what is earnings per share (EPS), what does it measure, and how do
you calculate.
,Answer: net income earned on each share of common stock; measures
the company's profitability.
(net income - preferred stock dividends) / average common stock shares
outstanding
⩥ what do solvency ratios measures.
Answer: measure the ability of the company to survive over a long
period of time
⩥ debt to total assets ratio definition & calculation.
Answer: measures the percentage of total financing provided by
creditors.
total liabilities / total assets
⩥ free cash flow.
Answer: cash provided by operating activities adjusted for capital
expenditures and dividends paid
⩥ expense recognition principle (matching) requires...?.
Answer: that costs (expenses) be recognized in the same accounting
period of their related revenue
⩥ faithful representation.
Answer: info is complete, neutral, and free from error
, ⩥ going concern assumption.
Answer: principle that assumes the enterprise will continue into the
foreseeable future
⩥ revenue recognition principle.
Answer: revenue is recognized in the time period of when it is earned,
which is not always the same time period it is recieved
⩥ cost of goods sold is recorded as.
Answer: an expense
⩥ long term assets held for use in the production or sale of other assets
or services.
Answer: plant and equipment
⩥ how would you write the journal entry:
completed payroll for Jordan Valley and billed $440 for services.
Answer: Accounts receivable 440
Service Rev. 440
⩥ how would you write the journal entry:
received $200 cash in advance from Jones to set up accounting system.
ACTUAL QUESTIONS AND VERIFIED
ANSWERS
⩥ proprietorship.
Answer: business owned by one person
⩥ partnership.
Answer: business owned by two or more persons or entities
⩥ 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
⩥ 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
⩥ financial accounting is principally concerned with:.
Answer: reporting to external users
⩥ 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
⩥ calculate current ratio.
Answer: current assets / current liabilites
⩥ calculate working capital.
Answer: current assets - current liabilites
⩥ what is earnings per share (EPS), what does it measure, and how do
you calculate.
,Answer: net income earned on each share of common stock; measures
the company's profitability.
(net income - preferred stock dividends) / average common stock shares
outstanding
⩥ what do solvency ratios measures.
Answer: measure the ability of the company to survive over a long
period of time
⩥ debt to total assets ratio definition & calculation.
Answer: measures the percentage of total financing provided by
creditors.
total liabilities / total assets
⩥ free cash flow.
Answer: cash provided by operating activities adjusted for capital
expenditures and dividends paid
⩥ expense recognition principle (matching) requires...?.
Answer: that costs (expenses) be recognized in the same accounting
period of their related revenue
⩥ faithful representation.
Answer: info is complete, neutral, and free from error
, ⩥ going concern assumption.
Answer: principle that assumes the enterprise will continue into the
foreseeable future
⩥ revenue recognition principle.
Answer: revenue is recognized in the time period of when it is earned,
which is not always the same time period it is recieved
⩥ cost of goods sold is recorded as.
Answer: an expense
⩥ long term assets held for use in the production or sale of other assets
or services.
Answer: plant and equipment
⩥ how would you write the journal entry:
completed payroll for Jordan Valley and billed $440 for services.
Answer: Accounts receivable 440
Service Rev. 440
⩥ how would you write the journal entry:
received $200 cash in advance from Jones to set up accounting system.
