Bus 302L Financial Accounting UPDATED
Exam Questions and CORRECT Answers
Comparing actual outcomes with budget outcomes, then following up, is an example of a -
CORRECT ANSWER - Controlling activities
Which of the following is typically a starting point for the budget process? - CORRECT
ANSWER - a sales budget
Tax accounting is generally most used by: - CORRECT ANSWER - Internal revenue
service (IRS)
Management accountant place more emphases on which of the following - CORRECT
ANSWER - future activities
Which of the following organization would be most likely to accept a process costing system? -
CORRECT ANSWER - paper manufacture
The discount rate for use in capital budgeting decision is also referred to as - CORRECT
ANSWER - the minimum required rate of return
A balance sheet shows - CORRECT ANSWER - assets, liabilities, and stockholders'
equity.
The excess of expenses over revenues for a period is: - CORRECT ANSWER - Net loss.
Liabilities - CORRECT ANSWER - are debts and obligations.
The common characteristic possessed by all assets is - CORRECT ANSWER - future
economic benefit.
, Which of the following is not an accounting assumption? - CORRECT ANSWER -
Integrity
Treasury stock is classified as - CORRECT ANSWER - A contra equity account.
Olsen Company prepares its statement of cash flows using the indirect method. Indicate whether
the item would be added to net income (increase), deducted from net income (decrease), or has
no effect on net income to determine net cash flows from operating activities. A decrease in the
value from the beginning of the year to the end of the year for Inventory, which is a current asset.
- CORRECT ANSWER - No effect
An Accounts Receivable previously written off as uncollectable is finally collected. The amount
collected was 500.Which of the following journal entries is correct (assuming the allowance
method is used)? - CORRECT ANSWER - Accounts Receivable $500
Allowance for Uncollectible Accounts $500
Cash 500
Accounts Receivable 500
A company ages its accounts receivables to determine its end of period adjustment for bad debts.
At the end of the current year, management estimated that 15,750 of the accounts receivable
balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubt full
Accounts had a debit balance of 175. What adjusting entry should the company make at the end
of the current year to record its estimated bad debts expense? - CORRECT ANSWER - c.
Bad Debts Expense...........15,925
Allowance for Doubtful Accounts.............. 15,925
(15,750 + 175)
In present value calculations, the process of determining the present value is called - CORRECT
ANSWER - discounting the future amount
Present value is based on - CORRECT ANSWER - all of the options listed
Exam Questions and CORRECT Answers
Comparing actual outcomes with budget outcomes, then following up, is an example of a -
CORRECT ANSWER - Controlling activities
Which of the following is typically a starting point for the budget process? - CORRECT
ANSWER - a sales budget
Tax accounting is generally most used by: - CORRECT ANSWER - Internal revenue
service (IRS)
Management accountant place more emphases on which of the following - CORRECT
ANSWER - future activities
Which of the following organization would be most likely to accept a process costing system? -
CORRECT ANSWER - paper manufacture
The discount rate for use in capital budgeting decision is also referred to as - CORRECT
ANSWER - the minimum required rate of return
A balance sheet shows - CORRECT ANSWER - assets, liabilities, and stockholders'
equity.
The excess of expenses over revenues for a period is: - CORRECT ANSWER - Net loss.
Liabilities - CORRECT ANSWER - are debts and obligations.
The common characteristic possessed by all assets is - CORRECT ANSWER - future
economic benefit.
, Which of the following is not an accounting assumption? - CORRECT ANSWER -
Integrity
Treasury stock is classified as - CORRECT ANSWER - A contra equity account.
Olsen Company prepares its statement of cash flows using the indirect method. Indicate whether
the item would be added to net income (increase), deducted from net income (decrease), or has
no effect on net income to determine net cash flows from operating activities. A decrease in the
value from the beginning of the year to the end of the year for Inventory, which is a current asset.
- CORRECT ANSWER - No effect
An Accounts Receivable previously written off as uncollectable is finally collected. The amount
collected was 500.Which of the following journal entries is correct (assuming the allowance
method is used)? - CORRECT ANSWER - Accounts Receivable $500
Allowance for Uncollectible Accounts $500
Cash 500
Accounts Receivable 500
A company ages its accounts receivables to determine its end of period adjustment for bad debts.
At the end of the current year, management estimated that 15,750 of the accounts receivable
balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubt full
Accounts had a debit balance of 175. What adjusting entry should the company make at the end
of the current year to record its estimated bad debts expense? - CORRECT ANSWER - c.
Bad Debts Expense...........15,925
Allowance for Doubtful Accounts.............. 15,925
(15,750 + 175)
In present value calculations, the process of determining the present value is called - CORRECT
ANSWER - discounting the future amount
Present value is based on - CORRECT ANSWER - all of the options listed
