ACCT 102 EXAM WITH COMPLETE
SOLUTIONS
What accounts normally have a credit balance? - Answer-Liabilities, Revenue and
Owner's Capital
What accounts normally have debit balances? - Answer-Assets, dividends, and
expenses
The normal balance of purchases is... - Answer-Debit
The normal balance of Discount Received is... - Answer-Credit
The normal balance of Freight in... - Answer-Debit
Under a periodic inventory system, inventory losses are included as part of... - Answer-
Cost of Sales
Net purchases + Freight In determines the... - Answer-Cost of goods available for sale
A deposit made by a company will appear on the bank statement as a... - Answer-Credit
outstanding deposits/deposits in transit - Answer-Have been recorded by the company's
books but not yet by the bank
The recoverable amount of trade receivables is shown in the - Answer-Statement of
Financial Position
Interest may be included in the acquisition cost of a plant asset if... - Answer-During the
construction period of a self-constructed asset
Collecting cash from loans made is part of... - Answer-Investing Activities
Declared and issued a dividend is part of... - Answer-None, does not represent cash
flow
Shares issued to acquire equipment... - Answer-Does not include cash flow
, Using the indirect method to calculate net cash flows from operating activities, if
equipment is sold at gain... - Answer-Amount of gain is deducted from operating
activities section
In vertical Analysis of balance sheet, the 100% figure represents... - Answer-Total
Assets
Long-Term Creditors are usually most interested in assessing... - Answer-Solvency
ASSET RULES - Answer-Debit Increase, Credit Decrease
LIABILITIES AND EQUITY RULE - Answer-Debit Decrease, Credit Increase
Increases in Owner's Equity - Answer-Investments by owner and retained earnings
Classification and normal balance of revenue received in advance? - Answer-Liability,
Credit
If an entity fails to adjust for accrued revenues... - Answer-Assets and revenues will be
understated
Adjusting entries affect at least... - Answer-one income statement account and one
balance sheet account
Sales revenue - Cost of sales - Answer-gross profit
The journal entry to record a return of inventory purchased on account under a periodic
inventory system would be... - Answer-Debit Accounts Payable, Credit Purchase
Returns and Allowances
Decreases in Owner's Equity - Answer-Drawings and Expenses
Prepaid expenses - Answer-debit expense, credit asset
Unearned Revenues - Answer-debit liability, credit revenue
Accrued Revenues - Answer-debit asset, credit revenue
Accrued Expenses - Answer-debit expense, credit liability
Net Realisable Value formula - Answer-estimated selling price - direct selling expenses
periodic inventory system - Answer-End of each period
COGS equation - Answer-beginning inventory + purchases - ending inventory
SOLUTIONS
What accounts normally have a credit balance? - Answer-Liabilities, Revenue and
Owner's Capital
What accounts normally have debit balances? - Answer-Assets, dividends, and
expenses
The normal balance of purchases is... - Answer-Debit
The normal balance of Discount Received is... - Answer-Credit
The normal balance of Freight in... - Answer-Debit
Under a periodic inventory system, inventory losses are included as part of... - Answer-
Cost of Sales
Net purchases + Freight In determines the... - Answer-Cost of goods available for sale
A deposit made by a company will appear on the bank statement as a... - Answer-Credit
outstanding deposits/deposits in transit - Answer-Have been recorded by the company's
books but not yet by the bank
The recoverable amount of trade receivables is shown in the - Answer-Statement of
Financial Position
Interest may be included in the acquisition cost of a plant asset if... - Answer-During the
construction period of a self-constructed asset
Collecting cash from loans made is part of... - Answer-Investing Activities
Declared and issued a dividend is part of... - Answer-None, does not represent cash
flow
Shares issued to acquire equipment... - Answer-Does not include cash flow
, Using the indirect method to calculate net cash flows from operating activities, if
equipment is sold at gain... - Answer-Amount of gain is deducted from operating
activities section
In vertical Analysis of balance sheet, the 100% figure represents... - Answer-Total
Assets
Long-Term Creditors are usually most interested in assessing... - Answer-Solvency
ASSET RULES - Answer-Debit Increase, Credit Decrease
LIABILITIES AND EQUITY RULE - Answer-Debit Decrease, Credit Increase
Increases in Owner's Equity - Answer-Investments by owner and retained earnings
Classification and normal balance of revenue received in advance? - Answer-Liability,
Credit
If an entity fails to adjust for accrued revenues... - Answer-Assets and revenues will be
understated
Adjusting entries affect at least... - Answer-one income statement account and one
balance sheet account
Sales revenue - Cost of sales - Answer-gross profit
The journal entry to record a return of inventory purchased on account under a periodic
inventory system would be... - Answer-Debit Accounts Payable, Credit Purchase
Returns and Allowances
Decreases in Owner's Equity - Answer-Drawings and Expenses
Prepaid expenses - Answer-debit expense, credit asset
Unearned Revenues - Answer-debit liability, credit revenue
Accrued Revenues - Answer-debit asset, credit revenue
Accrued Expenses - Answer-debit expense, credit liability
Net Realisable Value formula - Answer-estimated selling price - direct selling expenses
periodic inventory system - Answer-End of each period
COGS equation - Answer-beginning inventory + purchases - ending inventory
