AHLEI Final Exam UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Why is it important that you, a hospitality student or professional, study accounting? - CORRECT
ANSWER As a user of financial information, you need to know how the information is
processed and how reports are prepared.
The fundamental purpose of accounting is to: - CORRECT ANSWER provide accurate, useful,
and timely financial information.
The fundamental accounting equation is: - CORRECT ANSWER assets = liabilities + equity
In the double-entry system of accounting: - CORRECT ANSWER equal dollar amounts of
debits and credits must be entered for each business transaction.
The Hospitality Financial & Technology Professionals serves its membership by: - CORRECT
ANSWER providing training sessions on hospitality accounting and technology and
conducting professional development seminars for clubs, gaming operations, and other areas of
special interest.
In a corporation business form: - CORRECT ANSWER profits are retained in the corporation,
with shareholders receiving dividends at the discretion of the board of directors.
How is a business's income tax computed? - CORRECT ANSWER taxable income multiplied
by an applicable tax rate
Which of the following best describes par value of a corporation's stock? - CORRECT ANSWER
It is an established value for a company's stock, generally very low, below which the stock
cannot be originally issued.
Which of the following statements regarding the partnership form of business is true? - CORRECT
ANSWER It may have any number of limited partners.
, Forming a corporation is a legal procedure performed by: - CORRECT ANSWER filing
articles of incorporation with the secretary of corporation's office in the corporation's home state.
The financial document that provides information about the results of a company's operations for a
period of time is the: - CORRECT ANSWER statement of income.
The purpose of a balance sheet is to: - CORRECT ANSWER show the financial position of a
company on a given date.
Which of the following are the basic financial statements prepared by hospitality businesses? -
CORRECT ANSWER statement of income, equity statement, balance sheet, statement of cash
flows.
Managers, stockholders, investors, creditors, and other interested readers of a hospitality business's
financial statements use the statements to get information about: - CORRECT ANSWER what
the hospitality operation has accomplished financially,
where cash came from and where it was spent during the most recent accounting period, and the
operation's ability to pay its bills.
The statement of retained earnings for a corporation shows: - CORRECT ANSWER the
amount of earnings retained by the corporation.
An unsecured bond backed only by the good faith of the issuer is called a: - CORRECT ANSWER
debenture bond.
The account Prepaid Insurance is classified on the balance sheet as a: - CORRECT ANSWER
current asset.
Assets in the Property and Equipment category are sometimes referred to as: - CORRECT ANSWER
fixed assets.
Current assets consist of: - CORRECT ANSWER those that are convertible to cash within 12
months of the balance sheet date, those that are available without restriction for use in payment of
current liabilities, and cash.
QUESTIONS AND CORRECT ANSWERS
Why is it important that you, a hospitality student or professional, study accounting? - CORRECT
ANSWER As a user of financial information, you need to know how the information is
processed and how reports are prepared.
The fundamental purpose of accounting is to: - CORRECT ANSWER provide accurate, useful,
and timely financial information.
The fundamental accounting equation is: - CORRECT ANSWER assets = liabilities + equity
In the double-entry system of accounting: - CORRECT ANSWER equal dollar amounts of
debits and credits must be entered for each business transaction.
The Hospitality Financial & Technology Professionals serves its membership by: - CORRECT
ANSWER providing training sessions on hospitality accounting and technology and
conducting professional development seminars for clubs, gaming operations, and other areas of
special interest.
In a corporation business form: - CORRECT ANSWER profits are retained in the corporation,
with shareholders receiving dividends at the discretion of the board of directors.
How is a business's income tax computed? - CORRECT ANSWER taxable income multiplied
by an applicable tax rate
Which of the following best describes par value of a corporation's stock? - CORRECT ANSWER
It is an established value for a company's stock, generally very low, below which the stock
cannot be originally issued.
Which of the following statements regarding the partnership form of business is true? - CORRECT
ANSWER It may have any number of limited partners.
, Forming a corporation is a legal procedure performed by: - CORRECT ANSWER filing
articles of incorporation with the secretary of corporation's office in the corporation's home state.
The financial document that provides information about the results of a company's operations for a
period of time is the: - CORRECT ANSWER statement of income.
The purpose of a balance sheet is to: - CORRECT ANSWER show the financial position of a
company on a given date.
Which of the following are the basic financial statements prepared by hospitality businesses? -
CORRECT ANSWER statement of income, equity statement, balance sheet, statement of cash
flows.
Managers, stockholders, investors, creditors, and other interested readers of a hospitality business's
financial statements use the statements to get information about: - CORRECT ANSWER what
the hospitality operation has accomplished financially,
where cash came from and where it was spent during the most recent accounting period, and the
operation's ability to pay its bills.
The statement of retained earnings for a corporation shows: - CORRECT ANSWER the
amount of earnings retained by the corporation.
An unsecured bond backed only by the good faith of the issuer is called a: - CORRECT ANSWER
debenture bond.
The account Prepaid Insurance is classified on the balance sheet as a: - CORRECT ANSWER
current asset.
Assets in the Property and Equipment category are sometimes referred to as: - CORRECT ANSWER
fixed assets.
Current assets consist of: - CORRECT ANSWER those that are convertible to cash within 12
months of the balance sheet date, those that are available without restriction for use in payment of
current liabilities, and cash.
