ASU ACC 232 EXAM 2 -FINANCIAL ACCOUNTING I
|ACTUAL QUESTIONS AND VERIFIED
ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
Which of the following does NOT describe an income statement?
a. summarizes the results of a company's operating activities for a specific accounting period
b. also known as a statement of assets
c. used by investors to help judge their return on investment
d. used by creditors to help make loan decisions
CORRECT ANSWER
B. also known as a statement of assets
Question 2
A sales allowance is:
a. the merchandise a retail company is holding for resale
b. a continuous record of the cost of inventory on hand and the cost of inventory sold
c. when a customer returns previously sold merchandise
d. when the customer agrees to keep the merchandise and the company refunds a portion
of the original sales price
CORRECT ANSWER
D. when the customer agrees to keep the merchandise and the company refunds a portion
of the original sales price
1
@THE STUDY VAULT
, Question 3
Which of the following is NOT a characteristic of a sales discount?
a. offers a discount for early payments on credit sales
b. frequently calles a cash discount
c. reduction in sales price of a good or service because of the number of items purchased or
because of a sales promotion
d. percentage reduction of the invoice price if customer pays the invoice within a specific
time period
CORRECT ANSWER
C. reduction in sales price of a good or service because of the number of items purchased or
because of a sales promotion
Question 4
A perpetual inventory system:
a. is the merchandise a retail company is holding for resale
b. keeps continuous record of the cost of inventory on hand and the cost of inventory sold
c. determines the inventory at the end of each accounting period by physically counting it
d. does not keep a continuous record of the inventory on hand and sold
CORRECT ANSWER
B. keeps continuous record of the cost of inventory on hand and the cost of inventory sold
Question 5
Which of the following would NOT be found on an income statement?
a. net revenues
b. cost of goods sold
c. net income
2
@THE STUDY VAULT
|ACTUAL QUESTIONS AND VERIFIED
ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
Which of the following does NOT describe an income statement?
a. summarizes the results of a company's operating activities for a specific accounting period
b. also known as a statement of assets
c. used by investors to help judge their return on investment
d. used by creditors to help make loan decisions
CORRECT ANSWER
B. also known as a statement of assets
Question 2
A sales allowance is:
a. the merchandise a retail company is holding for resale
b. a continuous record of the cost of inventory on hand and the cost of inventory sold
c. when a customer returns previously sold merchandise
d. when the customer agrees to keep the merchandise and the company refunds a portion
of the original sales price
CORRECT ANSWER
D. when the customer agrees to keep the merchandise and the company refunds a portion
of the original sales price
1
@THE STUDY VAULT
, Question 3
Which of the following is NOT a characteristic of a sales discount?
a. offers a discount for early payments on credit sales
b. frequently calles a cash discount
c. reduction in sales price of a good or service because of the number of items purchased or
because of a sales promotion
d. percentage reduction of the invoice price if customer pays the invoice within a specific
time period
CORRECT ANSWER
C. reduction in sales price of a good or service because of the number of items purchased or
because of a sales promotion
Question 4
A perpetual inventory system:
a. is the merchandise a retail company is holding for resale
b. keeps continuous record of the cost of inventory on hand and the cost of inventory sold
c. determines the inventory at the end of each accounting period by physically counting it
d. does not keep a continuous record of the inventory on hand and sold
CORRECT ANSWER
B. keeps continuous record of the cost of inventory on hand and the cost of inventory sold
Question 5
Which of the following would NOT be found on an income statement?
a. net revenues
b. cost of goods sold
c. net income
2
@THE STUDY VAULT
