ACC 410 Final Exam Questions and Answers Already Passed Latest Update 2025-2026
True - Answers Decrease in discount rate decreases pension expense and increases pension
obligation expense
False - Answers Increase in discount rate increases pension and decreases pension obligation
False - Answers A balance sheet shows a company's position over a period of time, whereas an
income statement of stockholders equity, and statement of cash flows show its position at a
point in time
True - Answers A balance sheet shows a company's position at a point in time, income
statement, statement of equity, and statement of cash flows show its position over a period of
time
False - Answers Companies with equal profit margins all else Raul, the company with higher
asset turnover, is less profitable because it requires more revenue to turn its assets over
True - Answers Asset turnover is an efficiency metric, the higher the turnover, the more efficient
the company is with its assets and thus more profitable. ROA = PM x AT
False - Answers RE on BS must be all cash
True - Answers Equity and liability accounts don't relate directly to specific assets
True - Answers ROA measures the profit the company makes on each dollar of total A it uses
True - Answers ROA is a profitability metric
False - Answers Revenue recognition principle implies companies are required to record revenue
when cash is received as this provides the most objective evidence for the auditors
True - Answers Revenue is recognized when the company has done what it is obligated to do
under the sales contract, such as, when goods have been transferred or services performed for
the customer. Ex: sale of goods on credit
True - Answers Articulation refers to the concept that financial statements are linked to each
other and linked across time.
True - Answers Financial statements are linked to each other by cash (statement of cash flow
and balance sheets), via retained earnings (income statements and balance sheets), and via
equity accounts (statements of stockholder's equity and balance sheets)
false - Answers Book value of stockholder's equity (amount reported on BS) is most typically
equal to the market value of the equity of a company
True - Answers Book value and market value differ from reporting asset at historical or market
, value, difference in timing transaction recognition, value implication recognized by capital
markets
False - Answers Accrual accounting recognizes revenues only when cash is received and
expenses only when cash is paid.
True - Answers Accrual accounting refers to the recognition of revenue when products and
services are delivered at an amount expected to be received and the matching of expenses
when incurred. The recognition of revenues and expenses does not, necessarily, relate to the
receipt or payment of cash
True - Answers A company's net cash flow will RARELY equal its net income
True - Answers ROA can be disaggregated into Asset turnover and profit margin
False - Answers ROA can be disaggregated into FL and asset growth
True - Answers A balance sheet lists amounts for A,L, and E at a point in time
False - Answers IS lists amounts for A,L, and E at a point in time
ROE - Answers Net Income/Average Equity
ROA - Answers Net Income (Sales x PM)/Average Asets
Cash on BS - Answers Cash at beginning of year
+ Cash from operating,investing, and financing activities
=Cash at end of year
Cash at beginning of year - Answers Cash at end of year -cash from operating,financing, and
investing activities
True - Answers As inventory and PPE on the BS are consumed they are reflected on the IS
False - Answers As inventory and PPE on the BS are consumed they are reflected on Cash Flow
Statements
Accrual bassinet incoem - Answers = Revenues (earned/billed)
- Expenses (incurred)
=Net Income
Gros profit margin % - Answers = GP/Sales
RE at end of year - Answers = RE at beginning of year
True - Answers Decrease in discount rate decreases pension expense and increases pension
obligation expense
False - Answers Increase in discount rate increases pension and decreases pension obligation
False - Answers A balance sheet shows a company's position over a period of time, whereas an
income statement of stockholders equity, and statement of cash flows show its position at a
point in time
True - Answers A balance sheet shows a company's position at a point in time, income
statement, statement of equity, and statement of cash flows show its position over a period of
time
False - Answers Companies with equal profit margins all else Raul, the company with higher
asset turnover, is less profitable because it requires more revenue to turn its assets over
True - Answers Asset turnover is an efficiency metric, the higher the turnover, the more efficient
the company is with its assets and thus more profitable. ROA = PM x AT
False - Answers RE on BS must be all cash
True - Answers Equity and liability accounts don't relate directly to specific assets
True - Answers ROA measures the profit the company makes on each dollar of total A it uses
True - Answers ROA is a profitability metric
False - Answers Revenue recognition principle implies companies are required to record revenue
when cash is received as this provides the most objective evidence for the auditors
True - Answers Revenue is recognized when the company has done what it is obligated to do
under the sales contract, such as, when goods have been transferred or services performed for
the customer. Ex: sale of goods on credit
True - Answers Articulation refers to the concept that financial statements are linked to each
other and linked across time.
True - Answers Financial statements are linked to each other by cash (statement of cash flow
and balance sheets), via retained earnings (income statements and balance sheets), and via
equity accounts (statements of stockholder's equity and balance sheets)
false - Answers Book value of stockholder's equity (amount reported on BS) is most typically
equal to the market value of the equity of a company
True - Answers Book value and market value differ from reporting asset at historical or market
, value, difference in timing transaction recognition, value implication recognized by capital
markets
False - Answers Accrual accounting recognizes revenues only when cash is received and
expenses only when cash is paid.
True - Answers Accrual accounting refers to the recognition of revenue when products and
services are delivered at an amount expected to be received and the matching of expenses
when incurred. The recognition of revenues and expenses does not, necessarily, relate to the
receipt or payment of cash
True - Answers A company's net cash flow will RARELY equal its net income
True - Answers ROA can be disaggregated into Asset turnover and profit margin
False - Answers ROA can be disaggregated into FL and asset growth
True - Answers A balance sheet lists amounts for A,L, and E at a point in time
False - Answers IS lists amounts for A,L, and E at a point in time
ROE - Answers Net Income/Average Equity
ROA - Answers Net Income (Sales x PM)/Average Asets
Cash on BS - Answers Cash at beginning of year
+ Cash from operating,investing, and financing activities
=Cash at end of year
Cash at beginning of year - Answers Cash at end of year -cash from operating,financing, and
investing activities
True - Answers As inventory and PPE on the BS are consumed they are reflected on the IS
False - Answers As inventory and PPE on the BS are consumed they are reflected on Cash Flow
Statements
Accrual bassinet incoem - Answers = Revenues (earned/billed)
- Expenses (incurred)
=Net Income
Gros profit margin % - Answers = GP/Sales
RE at end of year - Answers = RE at beginning of year
