ACCT 2000 ALL FINAL EXAM ACTUAL QUESTIONS
AND ANSWERS SURE A+
✔✔Accrued Expenses adjusting entry shows - ✔✔the adjusting entry which records the
liability (payable) and recognizes the expense
debit expense, credit payable
✔✔When is the trial balance prepared? - ✔✔after all adjusting entries are journalized
and posted and is prepared from the ledger (T-accounts)
✔✔What is the purpose of the adjusted trial balance? - ✔✔is to prove the equality of
debit balances and credit balances in the ledger
✔✔What is the primary basis for the preparation of the financial statements? -
✔✔adjusted trial balance
✔✔Which financial segments are prepared directly from the adjusted trial balance? -
✔✔income statement, retained earning statement, balance sheet
✔✔Closing the books - ✔✔at the end of the accounting period companies transfer the
temporary account balances to the permeant stockholders' equity account- Retained
Earnings
, ✔✔Temporary accounts (red) - ✔✔all revenue, expense and dividend accounts
✔✔Permanent accounts - ✔✔all assets, liability, and stockholders' equity accounts, R/E
✔✔Which accounts close into income summary? - ✔✔revenue accounts, expense
accounts
✔✔Which accounts closes directly into retained earning? - ✔✔dividends and income
summary
✔✔When closing a temporary account they produce a - ✔✔zero balance in each
account
✔✔What is the purpose of the post-closing trial balance - ✔✔is to prove the equity of
the permanent account balances that the company carries forward not the next
accounting period
✔✔Gross Profit equals - ✔✔sales revenue - cost of goods sold
✔✔Cost of goods sold - ✔✔is the total cost of goods sold during the period
✔✔Operating expense equals - ✔✔net income
✔✔Service Company operating cycle - ✔✔cash, performed service, accounts reliable,
receive cash
✔✔Merchandising company operating cycles - ✔✔cash, buy inventory, merchandise
inventory, sell inventory, accounts receivable, receive cash
✔✔Which operating cycle generally takes longer? - ✔✔merchandising
✔✔Perpetual - scanner method - ✔✔maintained detailed records of the cost of each
inventory purchase and sale
records continuously show inventory that should on hand
company determines cost of goods sold each time a sale occurs
✔✔Period- mom/pop - ✔✔do not keep detailed records of the goods on hand
out of goods sold determined by count at the end of the accounting period
✔✔Period calculation of cost of goods sold - ✔✔beginning inventory
+ purchases, net
= goods available for sale
- ending inventory
=cost of goods sold
AND ANSWERS SURE A+
✔✔Accrued Expenses adjusting entry shows - ✔✔the adjusting entry which records the
liability (payable) and recognizes the expense
debit expense, credit payable
✔✔When is the trial balance prepared? - ✔✔after all adjusting entries are journalized
and posted and is prepared from the ledger (T-accounts)
✔✔What is the purpose of the adjusted trial balance? - ✔✔is to prove the equality of
debit balances and credit balances in the ledger
✔✔What is the primary basis for the preparation of the financial statements? -
✔✔adjusted trial balance
✔✔Which financial segments are prepared directly from the adjusted trial balance? -
✔✔income statement, retained earning statement, balance sheet
✔✔Closing the books - ✔✔at the end of the accounting period companies transfer the
temporary account balances to the permeant stockholders' equity account- Retained
Earnings
, ✔✔Temporary accounts (red) - ✔✔all revenue, expense and dividend accounts
✔✔Permanent accounts - ✔✔all assets, liability, and stockholders' equity accounts, R/E
✔✔Which accounts close into income summary? - ✔✔revenue accounts, expense
accounts
✔✔Which accounts closes directly into retained earning? - ✔✔dividends and income
summary
✔✔When closing a temporary account they produce a - ✔✔zero balance in each
account
✔✔What is the purpose of the post-closing trial balance - ✔✔is to prove the equity of
the permanent account balances that the company carries forward not the next
accounting period
✔✔Gross Profit equals - ✔✔sales revenue - cost of goods sold
✔✔Cost of goods sold - ✔✔is the total cost of goods sold during the period
✔✔Operating expense equals - ✔✔net income
✔✔Service Company operating cycle - ✔✔cash, performed service, accounts reliable,
receive cash
✔✔Merchandising company operating cycles - ✔✔cash, buy inventory, merchandise
inventory, sell inventory, accounts receivable, receive cash
✔✔Which operating cycle generally takes longer? - ✔✔merchandising
✔✔Perpetual - scanner method - ✔✔maintained detailed records of the cost of each
inventory purchase and sale
records continuously show inventory that should on hand
company determines cost of goods sold each time a sale occurs
✔✔Period- mom/pop - ✔✔do not keep detailed records of the goods on hand
out of goods sold determined by count at the end of the accounting period
✔✔Period calculation of cost of goods sold - ✔✔beginning inventory
+ purchases, net
= goods available for sale
- ending inventory
=cost of goods sold
