ACCT 102 FINAL EXAM QUESTIONS
WITH CORRECT ANSWERS
(GRADED A+)
A current liability is a liability that can reasonably be expected to be paid:
a. within one year or within the operating cycle (whichever is the longer).
b. between 6 months and 18 months.
c. out of currently recognised revenues.
d. out of cash currently on hand. - Answer-a. within one year or within the operating
cycle
Which of the following most likely would be classified as a current liability?
a. mortgage payable.
b. bonds payable.
c. three-year notes payable.
d. accounts payable. - Answer-b. accounts payable
Notes payable usually require the borrower to pay:
a. revenue.
b. interest.
c. prepayments.
d. contingencies. - Answer-b. interest
Interest expense on an interest-bearing note is:
a. always equal to zero.
b. only recorded at the time the note is issued.
c. accrued over the life of the note.
d. only recorded at maturity when the note is paid. - Answer-c. accrued over the life of
the life
On 1 October, Simon's Solar Service borrows $150,000 from Statewide Bank on a 3
month, 4% note.
96. What accrual entry must Simon's Solar Service make on 31 December before
financial statements are prepared?
a. Interest payable Interest expense Dr1,500, Cr1,500
b. Interest expense Interest payable Dr1,500 Cr1,500
,c. Interest expense Interest payable Dr6,000 Cr6,000
d. Interest expense Notes payable
Dr1,500 Cr1,500 - Answer-b. Interest expense Interest payable Dr1,500 Cr1,500
97. The entry by Simon's Solar Service to record payment of the note and accrued
interest on 1 January is:
a. Notes payable Cash Dr,151,000 Cr,151,000
b. Notes payable Interest payable
Cash Dr,150,000 Dr,4,000 Cr,154,000
c. Notes payable Interest expense
Cash. Dr,150,000 Dr,1,000 Cr151,000
d. Notes payable Interest payable
Cash Dr,150,000 Dr,1,500 Cr,151,500 - Answer-d. Notes payable Interest payable
Cash Dr,150,000 Dr,1,500 Cr,151,500
The current portion of non-current liabilities should:
a. be paid immediately.
b. be classified as a long-term liability.
c. be reclassified as a current liability.
d. not be separated from the long-term portion of liabilities. - Answer-c. be reclassified
as a current liability
Which of the following is not an example of a provision?
a. Warranty for motor vehicle repairs
b. Employee long service leave entitlements
c. Debentures issued
d. Employee annual leave entitlements - Answer-c. debentures issued
Which of the following is an example of a contingent liability?
a. Legal proceedings against the business for a damages claim
b. Warranties for repairs
c. Debentures payable
d. Mortgage owing - Answer-a. legal proceedings against the business for a damages
claim
The statement of cash flows:
a. must be prepared on a daily basis.
b. summarises cash flows relating to operating, financing, and investing activities of an
entity.
c. is another name for the income statement.
d. is a special section of the income statement. - Answer-b. summarises cash flows
relating to operating, financing, and investing activities of an entity.
The order of presentation of activities on the statement of cash flows is:
a. operating, investing, financing.
b. operating, financing, investing.
, c. financing, operating, investing.
d. financing, investing, operating. - Answer-a. operating, investing, financing
Financing activities involve:
a. lending money.
b. acquiring investments.
c. issuing debt.
d. acquiring non-current asset - Answer-c. issuing debt
Investing activities include:
a. collecting cash from loans made.
b. obtaining cash from creditors.
c. obtaining capital from owners.
d. repaying borrowed money. - Answer-a. collecting cash from loans made
Who Of the following would not be considered an internal user of accounting data for
XYZ company LTD.
A. the chief executive of the company
B. A production manager
c. The company sale manager
D. A share investor - Answer-D. A share holder
Dividends paid decreases what - Answer-Decrease retained earnings
Resources owned by a business are referred to as - Answer-assets
Retained earnings at the end of the period is equal to - Answer-retained earnings at the
beginning of the period plus profit minus dividends paid
If retained earnings increases from the biginning of the year to the end of the year, then
what happens to profit - Answer-profit is greater than dividends paid
Johnny's Car Repairs had total assets of $60,000 and total liabilities o f$40,000 at the
beginning of the year. During the year the business recorded $100,000 in revenues,
$55,000 in expenses, and dividends of $10,000 were distributed. Equity at the end of
the year is: - Answer-55,000
(Assets=liabilities + equity
60,000=40,000+20,000
100,000-55,0000-10,0000=35,000+20,000=55,000)
Johnny's Car Repairs had total assets of $60,000 and total liabilities of $40,000 at the
beginning of the year. During the year the business recorded $100,000 in revenues,
$55,000 in expenses, and dividends of $10,000 were distributed. Profit reported by
Johnny's Car Repairs for the year was: - Answer-45,000
WITH CORRECT ANSWERS
(GRADED A+)
A current liability is a liability that can reasonably be expected to be paid:
a. within one year or within the operating cycle (whichever is the longer).
b. between 6 months and 18 months.
c. out of currently recognised revenues.
d. out of cash currently on hand. - Answer-a. within one year or within the operating
cycle
Which of the following most likely would be classified as a current liability?
a. mortgage payable.
b. bonds payable.
c. three-year notes payable.
d. accounts payable. - Answer-b. accounts payable
Notes payable usually require the borrower to pay:
a. revenue.
b. interest.
c. prepayments.
d. contingencies. - Answer-b. interest
Interest expense on an interest-bearing note is:
a. always equal to zero.
b. only recorded at the time the note is issued.
c. accrued over the life of the note.
d. only recorded at maturity when the note is paid. - Answer-c. accrued over the life of
the life
On 1 October, Simon's Solar Service borrows $150,000 from Statewide Bank on a 3
month, 4% note.
96. What accrual entry must Simon's Solar Service make on 31 December before
financial statements are prepared?
a. Interest payable Interest expense Dr1,500, Cr1,500
b. Interest expense Interest payable Dr1,500 Cr1,500
,c. Interest expense Interest payable Dr6,000 Cr6,000
d. Interest expense Notes payable
Dr1,500 Cr1,500 - Answer-b. Interest expense Interest payable Dr1,500 Cr1,500
97. The entry by Simon's Solar Service to record payment of the note and accrued
interest on 1 January is:
a. Notes payable Cash Dr,151,000 Cr,151,000
b. Notes payable Interest payable
Cash Dr,150,000 Dr,4,000 Cr,154,000
c. Notes payable Interest expense
Cash. Dr,150,000 Dr,1,000 Cr151,000
d. Notes payable Interest payable
Cash Dr,150,000 Dr,1,500 Cr,151,500 - Answer-d. Notes payable Interest payable
Cash Dr,150,000 Dr,1,500 Cr,151,500
The current portion of non-current liabilities should:
a. be paid immediately.
b. be classified as a long-term liability.
c. be reclassified as a current liability.
d. not be separated from the long-term portion of liabilities. - Answer-c. be reclassified
as a current liability
Which of the following is not an example of a provision?
a. Warranty for motor vehicle repairs
b. Employee long service leave entitlements
c. Debentures issued
d. Employee annual leave entitlements - Answer-c. debentures issued
Which of the following is an example of a contingent liability?
a. Legal proceedings against the business for a damages claim
b. Warranties for repairs
c. Debentures payable
d. Mortgage owing - Answer-a. legal proceedings against the business for a damages
claim
The statement of cash flows:
a. must be prepared on a daily basis.
b. summarises cash flows relating to operating, financing, and investing activities of an
entity.
c. is another name for the income statement.
d. is a special section of the income statement. - Answer-b. summarises cash flows
relating to operating, financing, and investing activities of an entity.
The order of presentation of activities on the statement of cash flows is:
a. operating, investing, financing.
b. operating, financing, investing.
, c. financing, operating, investing.
d. financing, investing, operating. - Answer-a. operating, investing, financing
Financing activities involve:
a. lending money.
b. acquiring investments.
c. issuing debt.
d. acquiring non-current asset - Answer-c. issuing debt
Investing activities include:
a. collecting cash from loans made.
b. obtaining cash from creditors.
c. obtaining capital from owners.
d. repaying borrowed money. - Answer-a. collecting cash from loans made
Who Of the following would not be considered an internal user of accounting data for
XYZ company LTD.
A. the chief executive of the company
B. A production manager
c. The company sale manager
D. A share investor - Answer-D. A share holder
Dividends paid decreases what - Answer-Decrease retained earnings
Resources owned by a business are referred to as - Answer-assets
Retained earnings at the end of the period is equal to - Answer-retained earnings at the
beginning of the period plus profit minus dividends paid
If retained earnings increases from the biginning of the year to the end of the year, then
what happens to profit - Answer-profit is greater than dividends paid
Johnny's Car Repairs had total assets of $60,000 and total liabilities o f$40,000 at the
beginning of the year. During the year the business recorded $100,000 in revenues,
$55,000 in expenses, and dividends of $10,000 were distributed. Equity at the end of
the year is: - Answer-55,000
(Assets=liabilities + equity
60,000=40,000+20,000
100,000-55,0000-10,0000=35,000+20,000=55,000)
Johnny's Car Repairs had total assets of $60,000 and total liabilities of $40,000 at the
beginning of the year. During the year the business recorded $100,000 in revenues,
$55,000 in expenses, and dividends of $10,000 were distributed. Profit reported by
Johnny's Car Repairs for the year was: - Answer-45,000
