ACC231 Final Exam ACC 231 Final Exam
LATEST
Course
ACC231 (ACC231)
Question 1
The accounting equation is:
A. Assets = Revenue − Expenses
B. Assets = Liabilities + Owner's Equity
C. Assets = Liabilities − Equity
D. Revenue = Assets + Liabilities
Correct Answer: B. Assets = Liabilities + Owner's Equity
Rationale: Every accounting transaction maintains the balance of this fundamental equation.
Question 2
Which financial statement reports revenues and expenses over a specific accounting period?
A. Balance Sheet
B. Statement of Cash Flows
C. Income Statement
D. Statement of Retained Earnings
Correct Answer: C. Income Statement
Rationale: The income statement measures profitability for a defined period.
Question 3
A debit entry always:
A. Increases every account
B. Decreases every account
C. Has the same effect on all accounts
,D. Has different effects depending on the account type
Correct Answer: D. Has different effects depending on the account type
Question 4
Which account normally has a debit balance?
A. Accounts Payable
B. Service Revenue
C. Cash
D. Common Stock
Correct Answer: C. Cash
Question 5
When services are provided on account, the journal entry includes:
A. Debit Cash; Credit Revenue
B. Debit Accounts Receivable; Credit Service Revenue
C. Debit Revenue; Credit Accounts Receivable
D. Debit Accounts Payable; Credit Revenue
Correct Answer: B. Debit Accounts Receivable; Credit Service Revenue
Question 6
Adjusting entries are prepared primarily to:
A. Correct mathematical errors
B. Satisfy the matching and revenue recognition principles
C. Close temporary accounts
D. Record owner investments
Correct Answer: B. Satisfy the matching and revenue recognition principles
, Question 7
Unearned Revenue is classified as a:
A. Revenue
B. Current Asset
C. Current Liability
D. Expense
Correct Answer: C. Current Liability
Question 8
Depreciation is the:
A. Decline in market value of an asset
B. Allocation of an asset's cost over its useful life
C. Cash paid to replace equipment
D. Amount received from selling equipment
Correct Answer: B. Allocation of an asset's cost over its useful life
Question 9
Which inventory method generally results in the lowest cost of goods sold during periods of
rising prices?
A. FIFO
B. LIFO
C. Weighted Average
D. Specific Identification
Correct Answer: A. FIFO
LATEST
Course
ACC231 (ACC231)
Question 1
The accounting equation is:
A. Assets = Revenue − Expenses
B. Assets = Liabilities + Owner's Equity
C. Assets = Liabilities − Equity
D. Revenue = Assets + Liabilities
Correct Answer: B. Assets = Liabilities + Owner's Equity
Rationale: Every accounting transaction maintains the balance of this fundamental equation.
Question 2
Which financial statement reports revenues and expenses over a specific accounting period?
A. Balance Sheet
B. Statement of Cash Flows
C. Income Statement
D. Statement of Retained Earnings
Correct Answer: C. Income Statement
Rationale: The income statement measures profitability for a defined period.
Question 3
A debit entry always:
A. Increases every account
B. Decreases every account
C. Has the same effect on all accounts
,D. Has different effects depending on the account type
Correct Answer: D. Has different effects depending on the account type
Question 4
Which account normally has a debit balance?
A. Accounts Payable
B. Service Revenue
C. Cash
D. Common Stock
Correct Answer: C. Cash
Question 5
When services are provided on account, the journal entry includes:
A. Debit Cash; Credit Revenue
B. Debit Accounts Receivable; Credit Service Revenue
C. Debit Revenue; Credit Accounts Receivable
D. Debit Accounts Payable; Credit Revenue
Correct Answer: B. Debit Accounts Receivable; Credit Service Revenue
Question 6
Adjusting entries are prepared primarily to:
A. Correct mathematical errors
B. Satisfy the matching and revenue recognition principles
C. Close temporary accounts
D. Record owner investments
Correct Answer: B. Satisfy the matching and revenue recognition principles
, Question 7
Unearned Revenue is classified as a:
A. Revenue
B. Current Asset
C. Current Liability
D. Expense
Correct Answer: C. Current Liability
Question 8
Depreciation is the:
A. Decline in market value of an asset
B. Allocation of an asset's cost over its useful life
C. Cash paid to replace equipment
D. Amount received from selling equipment
Correct Answer: B. Allocation of an asset's cost over its useful life
Question 9
Which inventory method generally results in the lowest cost of goods sold during periods of
rising prices?
A. FIFO
B. LIFO
C. Weighted Average
D. Specific Identification
Correct Answer: A. FIFO
