FINANCIAL ACCOUNTING
FINAL EXAM
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,Question 1
If a company records prepayment of expenses in an asset account, the adjusting entry when all or part of the prepaid
asset is used or expired would:
1. Cause an adjustment to prior expense to be overstated and assets to be understated.
2. decrease cash.
3. Cause an accrued liability account to exist.
4. Result in a debit to a liability and a credit to an asset account.
5. Result in a debit to an expense and a credit to an asset account.
Correct Answer
5. Result in a debit to an expense and a credit to an asset account.
Question 2
A business's source documents may include all of the following except:
1. ledgers
2. checks
3. sales tickets.
4. purchase orders.
5. bank statements
Correct Answer
1. ledgers
Question 3
Identify the statement below that is true:
1. Another name for the trial balance is the chart of accounts.
2. The trial balance is a book of original entry.
3. The trial balance is another name for the balance sheet as long as debits balance with credits.
4. If the trial balance is in balance, it proves that no errors have been made in recording and posting transactions.
5. The trial balance is a list of all accounts from the ledger with their balances at a point in time.
Correct Answer
5. The trial balance is a list of all accounts from the ledger with their balances at a point in time.
Question 4
If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account
called Unearned Legal Fees, the end-of-period adjusting entry to record the portion of those fees that has been
earned is:
1. Debit Cash and credit Legal Fees Earned.
2. Debit Cash and credit Unearned Legal Fees.
3. Debit Unearned Legal Fees and credit Legal Fees Earned.
Correct Answer
3. Debit Unearned Legal Fees and credit Legal Fees Earned.
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, Question 5
Identify the account used by businesses to record the transfer of assets from a business to its stockholders:
1. A revenue account.
2. A liability account
3. the common stock account
4. an expense account
5. the dividends account
Correct Answer
5. the dividends account
Question 6
A company's ledger is:
1. A record containing increases and decreases in a specific asset, liability, equity, revenue, or expense item.
2. A list of all accounts a company uses with an assigned identification number.
3. A record containing all accounts and their balances used by the company.
4. A collection of documents that describe transactions and events entering the accounting process.
Correct Answer
3. A record containing all accounts and their balances used by the company.
Question 7
The adjusting entry to record an accrued expense is:
Correct Answer
Increase an expense; increase a liability.
Question 8
The chronological record of each complete transaction that has occurred in a business is called the:
Correct Answer
journal
Question 9
If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be:
1. Assets increase $4,500 and liabilities decrease $4,500.
2. Assets increase $4,500 and liabilities increase $4,500.
3. Liabilities decrease $4,500 and assets increase $4,500.
4. Equity decreases $4,500 and liabilities increase $4,500.
Correct Answer
2. Assets increase $4,500 and liabilities increase $4,500.
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FINAL EXAM
100+ (Latest 2025-2026 Edition) 100%
Verified Q&A + Answer Key Solutions
100% Guarantee Pass
✓ This Exam contains: Financial Accounting Final Exam
✓ 100% Accurate Questions and Answers
✓ 100% Guarantee Pass - Verified by Experts
✓ Each Question Includes The Correct Answer
✓ Expert-Verified
Trusted by thousands of students and professionals worldwide Page 1 of 27
,Question 1
If a company records prepayment of expenses in an asset account, the adjusting entry when all or part of the prepaid
asset is used or expired would:
1. Cause an adjustment to prior expense to be overstated and assets to be understated.
2. decrease cash.
3. Cause an accrued liability account to exist.
4. Result in a debit to a liability and a credit to an asset account.
5. Result in a debit to an expense and a credit to an asset account.
Correct Answer
5. Result in a debit to an expense and a credit to an asset account.
Question 2
A business's source documents may include all of the following except:
1. ledgers
2. checks
3. sales tickets.
4. purchase orders.
5. bank statements
Correct Answer
1. ledgers
Question 3
Identify the statement below that is true:
1. Another name for the trial balance is the chart of accounts.
2. The trial balance is a book of original entry.
3. The trial balance is another name for the balance sheet as long as debits balance with credits.
4. If the trial balance is in balance, it proves that no errors have been made in recording and posting transactions.
5. The trial balance is a list of all accounts from the ledger with their balances at a point in time.
Correct Answer
5. The trial balance is a list of all accounts from the ledger with their balances at a point in time.
Question 4
If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account
called Unearned Legal Fees, the end-of-period adjusting entry to record the portion of those fees that has been
earned is:
1. Debit Cash and credit Legal Fees Earned.
2. Debit Cash and credit Unearned Legal Fees.
3. Debit Unearned Legal Fees and credit Legal Fees Earned.
Correct Answer
3. Debit Unearned Legal Fees and credit Legal Fees Earned.
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, Question 5
Identify the account used by businesses to record the transfer of assets from a business to its stockholders:
1. A revenue account.
2. A liability account
3. the common stock account
4. an expense account
5. the dividends account
Correct Answer
5. the dividends account
Question 6
A company's ledger is:
1. A record containing increases and decreases in a specific asset, liability, equity, revenue, or expense item.
2. A list of all accounts a company uses with an assigned identification number.
3. A record containing all accounts and their balances used by the company.
4. A collection of documents that describe transactions and events entering the accounting process.
Correct Answer
3. A record containing all accounts and their balances used by the company.
Question 7
The adjusting entry to record an accrued expense is:
Correct Answer
Increase an expense; increase a liability.
Question 8
The chronological record of each complete transaction that has occurred in a business is called the:
Correct Answer
journal
Question 9
If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be:
1. Assets increase $4,500 and liabilities decrease $4,500.
2. Assets increase $4,500 and liabilities increase $4,500.
3. Liabilities decrease $4,500 and assets increase $4,500.
4. Equity decreases $4,500 and liabilities increase $4,500.
Correct Answer
2. Assets increase $4,500 and liabilities increase $4,500.
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