HBS CORE FINAL EXAM QUESTIONS AND 100%
CORRECT ANSWERS LATEST UPDATE 2026/2027 |
GRADED A+ | GUARANTEED PASS!!
Wanting to raise more capital for the business, Suslik Designs
decided to allow 2 new equity investors into the business. Each new
investor paid $10,000. How will their investment impact the
accounting equation? Select all that apply. - ANSWER The assets of
the business are increased by the amount of cash received ($10,000
from each investor), and because the source of those resources is the
new owners, owners' equity is also increased.
Which of the following is an example of owners' equity? Select all
that apply. -
ANSWER Net income for the first four months of the
fiscal year.
All revenues and expenses, and therefore Net Income, are part of
the owners'
equity of the
business.
Which of the following is an example of an expense? Select all that
apply. - ANSWER The cost of a home store's inventory of glassware
that is thrown away because they were broken. This is an expense
related to the ongoing operations of a home store.
Fuel used for a company's delivery trucks last month. This is an
expense related
to an ongoing activity of the
business.
,A cold-weather clothing store has always had a generous return
policy on all jackets and coats. Jackets can be returned for a full
refund up to a year from the date of purchase. Historical data has
shown that 8% of customers will return their jackets and the company
maintains a reserve for returns to account for this. The CEO is looking
for ways to boost its bottom line and would like to get rid of this
reserve in the current year.
The most important accounting principle to consider in this case is:
- ANSWER
Consistency.
The principle of Consistency requires that the accounting methods be
consistently applied by the company over time in recording and
reporting unless there is a sound reason to change them.
Since it sounds like the motivation is related to increasing net income
and is not to utilize a more accurate accounting, the company should
probably choose to stay consistent with the accounting practices they
have been using.
Mandini's Steakhouse purchased 100 T-bone steaks for a total of
$1,000 from a supplier. The restaurant bought the steaks on credit,
and they will not pay until 30 days after delivery.
First, how will the accounting equation be affected at the time of the
purchase?
Select all that
apply.
Suppose 30 days after the purchase, Mandini's paid cash to the
vendor. How will
the accounting equation be affected when the payment is made? -
ANSWER First
step: Assets and Liabilities
increase.
,Second step: Assets and Liabilities decrease.
At the time of the purchase, inventory is an asset, so assets increase
by $1,000.
The obligation to pay within 30 days is a liability, so liabilities increase
by $1,000.
30 days later, at the time of the payment, cash is an asset, so the
payment in cash decreases assets by $1,000. The obligation to pay
was a liability, so the payment in cash decreases liabilities by $1,000.
Which of the following is an example of an asset? Select all that apply.
- ANSWER
A customer's promise to pay for a new computer delivered
last month.
The promise represents future cash inflow and the delivery of the
computer
occurred in the
past.
Gold Zone Inc., a jewelry designer and manufacturer, sold
watches to Jill's
Jewelry Shop for $1,500. Gold Zone spent $800 manufacturing the
watches and
Jill's Jewelry Shop has 30 days to pay for this order after they
receive it.
First, how will the recognition of the receivable and revenue for the
transaction impact the accounting equation at the time of the sale?
Please enter the amounts in the boxes below.
Next, Gold Zone needs to show that the inventory was sold and
recognize an expense for the cost of goods sold for $800. How will
such a recognition impact the accounting equation?
, Lastly, Gold Zone received payment from Jill's Jewelry Shop 30 days
after the initial purchase.How would the accounting equation be
impacted when the payment is received? - ANSWER First, the sale
increases assets (accounts receivable) by $1,500. The sale also
increases revenue, which increases owners' equity by $1,500.
At the same time, the sale decreases assets (inventory) by $800.
The cost of
goods sold is an expense, so it decreases owners' equity
by $800.
Finally, the receipt of payment increases assets (cash) by $1,500. The
receipt of
payment also decreases assets (accounts receivable)
by $1,500.
Which of the following is an example of a revenue? Select all that
apply. - ANSWER Gopher Co. is a designer and manufacturer of
promotional clothing and accessories. Gopher delivered T-shirts to a
customer and sent an invoice to the customer for $2,000. The revenue
has been earned because the goods were delivered.
Lauren owns a coffee shop. A customer came to the shop and
purchased a cappuccino and a bag of coffee beans. The customer
paid $40 at the time of purchase. The revenue has been both earned
(because the cappuccino and a bag of coffee beans were provided)
and realized (because the cash was received).
Glodar Corp., an oil rig parts manufacturer, received an advance
payment of
$150,000 on Aug 1 for an order of a replacement drill bit for an oil rig.
Glodar Corp. delivered the drill bit on Nov 1. How will the accounting
equation be impacted when this advance payment was recorded on
Aug 1? Select all that apply. - ANSWER Cash, an asset, increases by
$150,000. Because Glodar Corp.
CORRECT ANSWERS LATEST UPDATE 2026/2027 |
GRADED A+ | GUARANTEED PASS!!
Wanting to raise more capital for the business, Suslik Designs
decided to allow 2 new equity investors into the business. Each new
investor paid $10,000. How will their investment impact the
accounting equation? Select all that apply. - ANSWER The assets of
the business are increased by the amount of cash received ($10,000
from each investor), and because the source of those resources is the
new owners, owners' equity is also increased.
Which of the following is an example of owners' equity? Select all
that apply. -
ANSWER Net income for the first four months of the
fiscal year.
All revenues and expenses, and therefore Net Income, are part of
the owners'
equity of the
business.
Which of the following is an example of an expense? Select all that
apply. - ANSWER The cost of a home store's inventory of glassware
that is thrown away because they were broken. This is an expense
related to the ongoing operations of a home store.
Fuel used for a company's delivery trucks last month. This is an
expense related
to an ongoing activity of the
business.
,A cold-weather clothing store has always had a generous return
policy on all jackets and coats. Jackets can be returned for a full
refund up to a year from the date of purchase. Historical data has
shown that 8% of customers will return their jackets and the company
maintains a reserve for returns to account for this. The CEO is looking
for ways to boost its bottom line and would like to get rid of this
reserve in the current year.
The most important accounting principle to consider in this case is:
- ANSWER
Consistency.
The principle of Consistency requires that the accounting methods be
consistently applied by the company over time in recording and
reporting unless there is a sound reason to change them.
Since it sounds like the motivation is related to increasing net income
and is not to utilize a more accurate accounting, the company should
probably choose to stay consistent with the accounting practices they
have been using.
Mandini's Steakhouse purchased 100 T-bone steaks for a total of
$1,000 from a supplier. The restaurant bought the steaks on credit,
and they will not pay until 30 days after delivery.
First, how will the accounting equation be affected at the time of the
purchase?
Select all that
apply.
Suppose 30 days after the purchase, Mandini's paid cash to the
vendor. How will
the accounting equation be affected when the payment is made? -
ANSWER First
step: Assets and Liabilities
increase.
,Second step: Assets and Liabilities decrease.
At the time of the purchase, inventory is an asset, so assets increase
by $1,000.
The obligation to pay within 30 days is a liability, so liabilities increase
by $1,000.
30 days later, at the time of the payment, cash is an asset, so the
payment in cash decreases assets by $1,000. The obligation to pay
was a liability, so the payment in cash decreases liabilities by $1,000.
Which of the following is an example of an asset? Select all that apply.
- ANSWER
A customer's promise to pay for a new computer delivered
last month.
The promise represents future cash inflow and the delivery of the
computer
occurred in the
past.
Gold Zone Inc., a jewelry designer and manufacturer, sold
watches to Jill's
Jewelry Shop for $1,500. Gold Zone spent $800 manufacturing the
watches and
Jill's Jewelry Shop has 30 days to pay for this order after they
receive it.
First, how will the recognition of the receivable and revenue for the
transaction impact the accounting equation at the time of the sale?
Please enter the amounts in the boxes below.
Next, Gold Zone needs to show that the inventory was sold and
recognize an expense for the cost of goods sold for $800. How will
such a recognition impact the accounting equation?
, Lastly, Gold Zone received payment from Jill's Jewelry Shop 30 days
after the initial purchase.How would the accounting equation be
impacted when the payment is received? - ANSWER First, the sale
increases assets (accounts receivable) by $1,500. The sale also
increases revenue, which increases owners' equity by $1,500.
At the same time, the sale decreases assets (inventory) by $800.
The cost of
goods sold is an expense, so it decreases owners' equity
by $800.
Finally, the receipt of payment increases assets (cash) by $1,500. The
receipt of
payment also decreases assets (accounts receivable)
by $1,500.
Which of the following is an example of a revenue? Select all that
apply. - ANSWER Gopher Co. is a designer and manufacturer of
promotional clothing and accessories. Gopher delivered T-shirts to a
customer and sent an invoice to the customer for $2,000. The revenue
has been earned because the goods were delivered.
Lauren owns a coffee shop. A customer came to the shop and
purchased a cappuccino and a bag of coffee beans. The customer
paid $40 at the time of purchase. The revenue has been both earned
(because the cappuccino and a bag of coffee beans were provided)
and realized (because the cash was received).
Glodar Corp., an oil rig parts manufacturer, received an advance
payment of
$150,000 on Aug 1 for an order of a replacement drill bit for an oil rig.
Glodar Corp. delivered the drill bit on Nov 1. How will the accounting
equation be impacted when this advance payment was recorded on
Aug 1? Select all that apply. - ANSWER Cash, an asset, increases by
$150,000. Because Glodar Corp.
