ACCY 200 Exam 1 UPDATED Exam
Questions and CORRECT Answers
The balance sheet might also be called:
a. Statement of Financial Position.
b. Statement of Assets.
c. Statement of Changes in Financial Position.
d. None of the above. - CORRECT ANSWER - a. Statement of Financial Position.
Expenses are:
a. decreases in net assets resulting from usual operating activities.
b. decreases in net assets from uninsured accidents.
c. cash disbursements.
d. decreases in net assets from dividends to stockholders. - CORRECT ANSWER - a.
decreases in net assets resulting from usual operating activities.
A fiscal year:
a. must end on the last day of a month.
b. is always the same as the calendar year.
c. must always end on the same date each year.
d. is frequently selected based on the firm's operating cycle. - CORRECT ANSWER - d. is
frequently selected based on the firm's operating cycle.
The purpose of the income statement is to show the:
a. market value per share of stock at the date of the statement.
b. net income or net loss for the period covered by the statement.
c. revenues collected during the period covered by the statement.
d. change in the fair value of the assets from the prior income statement. - CORRECT
ANSWER - b. net income or net loss for the period covered by the statement.
,Matching revenues and expenses refers to:
a. having revenues equal expenses.
b. recording revenues when a product is sold or a service is rendered.
c. accurately reflecting the results of operations for a fiscal period.
d. recording revenues when cash is received. - CORRECT ANSWER - c. accurately reflecting
the results of operations for a fiscal period.
When a firm purchases supplies for use in its business, and the cost of the supplies purchased is
recorded as an asset, the following adjustment to recognize the cost of supplies used will
probably be required:
a. No adjustment will probably be required.
b. Dr. Supplies expense
Cr. Supplies
c. Dr. Supplies
Cr. Accounts payable
d. Dr. Supplies
Cr. Supplies expense - CORRECT ANSWER - b. Dr. Supplies expense
Cr. Supplies
A credit entry will:
a. increase a liability account.
b. increase an asset account.
c. increase an expense account.
d. decrease paid-in capital. - CORRECT ANSWER - a. increase a liability account.
A debit entry will:
a. always increase the account balance.
b. always decrease the account balance.
, c. increase the balance of a revenue account.
d. increase the balance of an expense account. - CORRECT ANSWER - d. increase the
balance of an expense account.
The effect of an adjustment is:
a. to close the books.
b. to increase the accuracy of the financial statements.
c. to correct an entry that was not in balance.
d. to record transactions not previously recorded. - CORRECT ANSWER - b. to increase the
accuracy of the financial statements.
When a firm purchases supplies for its business:
a. an adjustment will probably be required as supplies are used.
b. the supplies expense account should always be debited.
c. the supplies account should always be debited.
d. either the supplies account or the supplies expense account should be credited. - CORRECT
ANSWER - a. an adjustment will probably be required as supplies are used.
Which of the following inventory accounting systems has been made much more feasible as a
result of computer systems developments?
a. Perpetual.
b. Physical.
c. Periodic.
d. Just-in-time. - CORRECT ANSWER - a. Perpetual.
When a firm uses the LIFO inventory cost flow assumption:
a. cost of goods sold will be the same as if FIFO were used.
b. net income will be greater than if FIFO were used.
c. cost of goods sold will be greater than if FIFO were used.
Questions and CORRECT Answers
The balance sheet might also be called:
a. Statement of Financial Position.
b. Statement of Assets.
c. Statement of Changes in Financial Position.
d. None of the above. - CORRECT ANSWER - a. Statement of Financial Position.
Expenses are:
a. decreases in net assets resulting from usual operating activities.
b. decreases in net assets from uninsured accidents.
c. cash disbursements.
d. decreases in net assets from dividends to stockholders. - CORRECT ANSWER - a.
decreases in net assets resulting from usual operating activities.
A fiscal year:
a. must end on the last day of a month.
b. is always the same as the calendar year.
c. must always end on the same date each year.
d. is frequently selected based on the firm's operating cycle. - CORRECT ANSWER - d. is
frequently selected based on the firm's operating cycle.
The purpose of the income statement is to show the:
a. market value per share of stock at the date of the statement.
b. net income or net loss for the period covered by the statement.
c. revenues collected during the period covered by the statement.
d. change in the fair value of the assets from the prior income statement. - CORRECT
ANSWER - b. net income or net loss for the period covered by the statement.
,Matching revenues and expenses refers to:
a. having revenues equal expenses.
b. recording revenues when a product is sold or a service is rendered.
c. accurately reflecting the results of operations for a fiscal period.
d. recording revenues when cash is received. - CORRECT ANSWER - c. accurately reflecting
the results of operations for a fiscal period.
When a firm purchases supplies for use in its business, and the cost of the supplies purchased is
recorded as an asset, the following adjustment to recognize the cost of supplies used will
probably be required:
a. No adjustment will probably be required.
b. Dr. Supplies expense
Cr. Supplies
c. Dr. Supplies
Cr. Accounts payable
d. Dr. Supplies
Cr. Supplies expense - CORRECT ANSWER - b. Dr. Supplies expense
Cr. Supplies
A credit entry will:
a. increase a liability account.
b. increase an asset account.
c. increase an expense account.
d. decrease paid-in capital. - CORRECT ANSWER - a. increase a liability account.
A debit entry will:
a. always increase the account balance.
b. always decrease the account balance.
, c. increase the balance of a revenue account.
d. increase the balance of an expense account. - CORRECT ANSWER - d. increase the
balance of an expense account.
The effect of an adjustment is:
a. to close the books.
b. to increase the accuracy of the financial statements.
c. to correct an entry that was not in balance.
d. to record transactions not previously recorded. - CORRECT ANSWER - b. to increase the
accuracy of the financial statements.
When a firm purchases supplies for its business:
a. an adjustment will probably be required as supplies are used.
b. the supplies expense account should always be debited.
c. the supplies account should always be debited.
d. either the supplies account or the supplies expense account should be credited. - CORRECT
ANSWER - a. an adjustment will probably be required as supplies are used.
Which of the following inventory accounting systems has been made much more feasible as a
result of computer systems developments?
a. Perpetual.
b. Physical.
c. Periodic.
d. Just-in-time. - CORRECT ANSWER - a. Perpetual.
When a firm uses the LIFO inventory cost flow assumption:
a. cost of goods sold will be the same as if FIFO were used.
b. net income will be greater than if FIFO were used.
c. cost of goods sold will be greater than if FIFO were used.
