ACG 2021 Final Exam Questions and
Answers
Question 1
When the Stated Rate is lower than the market rate, the bond will be sold at a
________? (MR>SR)
Correct Answer
Discount
Question 2
When we sell equipment that results in a gain, how will we journalize this?
Correct Answer
We will Credit Gain on Sale
Question 3
When journalizing dividends, what two dates do we provide journal entries for?
1.) Date of Declaration
2.) Date of Record
3.) Date of Payment
Correct Answer
Date of Declaration (DoD) Dr. R/E XX
Cr. Dividends Pay. XX
Date of Payment (DoP) Dr. Dividends Pay. XX
Cr. Cash XX
-We do not record a journal entry on the Date of Record.
Question 4
What are the two stock accounts considered Contributed Capital?
Correct Answer
Common Stock and Preferred Stock
Page 1 of 10
, Question 5
What are the employee's portion of payroll taxes they must cover?
Correct Answer
Employees cover FICA, Medicare, and Social Security
These are listed as a liability on the company's books.
Question 6
When we will sell equipment that results in a gain (loss), will the net book value be
higher or lower than the selling price?
Correct Answer
- If we sell equipment that results in a gain, the net book value will be lower than
the selling price.
- If we sell equipment that results in a loss, the net book value will be higher than
the selling price.
Question 7
What is the format for the effective interest method chart that is used to help
calculate bond amortization?
Correct Answer
________________________________________________________________________________________
Date | Cash Interest | Interest Exp. | Amortization | Book Value
1/1/20 | ( BV x SR) | (BV x MR) | [Int. Exp.- Cash Pmt] | (Differ.)
Question 8
What is the formula to calculate Interest on a note payable?
Correct Answer
Simple Interest = Principal x Rate x Time
(Interest = P x R x T)
Remember to prorate based on however many months the question is asking you
to accrue for interest payable or expense! I would figure out what the interest is per
month and then multiply however many months you need to accrue for.
Page 2 of 10
Answers
Question 1
When the Stated Rate is lower than the market rate, the bond will be sold at a
________? (MR>SR)
Correct Answer
Discount
Question 2
When we sell equipment that results in a gain, how will we journalize this?
Correct Answer
We will Credit Gain on Sale
Question 3
When journalizing dividends, what two dates do we provide journal entries for?
1.) Date of Declaration
2.) Date of Record
3.) Date of Payment
Correct Answer
Date of Declaration (DoD) Dr. R/E XX
Cr. Dividends Pay. XX
Date of Payment (DoP) Dr. Dividends Pay. XX
Cr. Cash XX
-We do not record a journal entry on the Date of Record.
Question 4
What are the two stock accounts considered Contributed Capital?
Correct Answer
Common Stock and Preferred Stock
Page 1 of 10
, Question 5
What are the employee's portion of payroll taxes they must cover?
Correct Answer
Employees cover FICA, Medicare, and Social Security
These are listed as a liability on the company's books.
Question 6
When we will sell equipment that results in a gain (loss), will the net book value be
higher or lower than the selling price?
Correct Answer
- If we sell equipment that results in a gain, the net book value will be lower than
the selling price.
- If we sell equipment that results in a loss, the net book value will be higher than
the selling price.
Question 7
What is the format for the effective interest method chart that is used to help
calculate bond amortization?
Correct Answer
________________________________________________________________________________________
Date | Cash Interest | Interest Exp. | Amortization | Book Value
1/1/20 | ( BV x SR) | (BV x MR) | [Int. Exp.- Cash Pmt] | (Differ.)
Question 8
What is the formula to calculate Interest on a note payable?
Correct Answer
Simple Interest = Principal x Rate x Time
(Interest = P x R x T)
Remember to prorate based on however many months the question is asking you
to accrue for interest payable or expense! I would figure out what the interest is per
month and then multiply however many months you need to accrue for.
Page 2 of 10
