University of Phoenix ACC290 Principles of
Accounting I – Final Exam (150+ Questions And
Answers with Rationales)
COURSE OVERVIEW
ACC/290T Principles of Accounting I is an introduction to
financial accounting with an emphasis on using financial data
for decision making. The focus is on the application of basic
accounting concepts and principles in enterprise and small
business transactions. Students learn how to identify, measure,
and report economic events of an enterprise.
Key Topics Covered on the Final Exam:
• The Accounting Equation & Double-Entry Accounting
• The Accounting Cycle (Journalizing, Posting, Trial Balance,
Adjusting Entries, Closing Entries)
• The Four Basic Financial Statements (Income Statement,
Statement of Retained Earnings, Balance Sheet, Statement
of Cash Flows)
• Accrual vs. Cash Basis Accounting
• Merchandising Operations & Inventory (FIFO, LIFO,
Weighted Average)
, • Internal Controls & Cash
• Accounts Receivable & Bad Debt
• Plant Assets, Depreciation, and Intangible Assets
• Current and Long-Term Liabilities
• Stockholders' Equity
PART 1: THE ACCOUNTING EQUATION & DOUBLE-ENTRY
ACCOUNTING (Questions 1-30)
Question 1
What is the fundamental accounting equation?
• A) Assets + Owners' Equity = Liabilities
• B) Assets + Liabilities = Owners' Equity
• C) Liabilities − Owners' Equity = Assets
• D) Assets = Liabilities + Owners' Equity
• Answer: D
• Rationale: The fundamental accounting equation is Assets
= Liabilities + Owners' Equity. This equation must always
balance and forms the foundation of double-entry
accounting.
,Question 2
What is the normal balance for an asset account?
• A) Credit
• B) Debit
• C) Either debit or credit
• D) Zero
• Answer: B
• Rationale: Assets have a normal debit balance. To increase
an asset account, you debit it. Liabilities and equity
accounts have normal credit balances.
Question 3
What is the normal balance for a liability account?
• A) Debit
• B) Credit
• C) Either debit or credit
• D) Zero
• Answer: B
• Rationale: Liabilities have a normal credit balance. To
increase a liability account, you credit it.
, Question 4
What is the normal balance for an expense account?
• A) Credit
• B) Debit
• C) Either debit or credit
• D) Zero
• Answer: B
• Rationale: Expenses have a normal debit balance because
they decrease stockholders' equity.
Question 5
What is the normal balance for a revenue account?
• A) Debit
• B) Credit
• C) Either debit or credit
• D) Zero
• Answer: B
• Rationale: Revenues have a normal credit balance because
they increase stockholders' equity.
Accounting I – Final Exam (150+ Questions And
Answers with Rationales)
COURSE OVERVIEW
ACC/290T Principles of Accounting I is an introduction to
financial accounting with an emphasis on using financial data
for decision making. The focus is on the application of basic
accounting concepts and principles in enterprise and small
business transactions. Students learn how to identify, measure,
and report economic events of an enterprise.
Key Topics Covered on the Final Exam:
• The Accounting Equation & Double-Entry Accounting
• The Accounting Cycle (Journalizing, Posting, Trial Balance,
Adjusting Entries, Closing Entries)
• The Four Basic Financial Statements (Income Statement,
Statement of Retained Earnings, Balance Sheet, Statement
of Cash Flows)
• Accrual vs. Cash Basis Accounting
• Merchandising Operations & Inventory (FIFO, LIFO,
Weighted Average)
, • Internal Controls & Cash
• Accounts Receivable & Bad Debt
• Plant Assets, Depreciation, and Intangible Assets
• Current and Long-Term Liabilities
• Stockholders' Equity
PART 1: THE ACCOUNTING EQUATION & DOUBLE-ENTRY
ACCOUNTING (Questions 1-30)
Question 1
What is the fundamental accounting equation?
• A) Assets + Owners' Equity = Liabilities
• B) Assets + Liabilities = Owners' Equity
• C) Liabilities − Owners' Equity = Assets
• D) Assets = Liabilities + Owners' Equity
• Answer: D
• Rationale: The fundamental accounting equation is Assets
= Liabilities + Owners' Equity. This equation must always
balance and forms the foundation of double-entry
accounting.
,Question 2
What is the normal balance for an asset account?
• A) Credit
• B) Debit
• C) Either debit or credit
• D) Zero
• Answer: B
• Rationale: Assets have a normal debit balance. To increase
an asset account, you debit it. Liabilities and equity
accounts have normal credit balances.
Question 3
What is the normal balance for a liability account?
• A) Debit
• B) Credit
• C) Either debit or credit
• D) Zero
• Answer: B
• Rationale: Liabilities have a normal credit balance. To
increase a liability account, you credit it.
, Question 4
What is the normal balance for an expense account?
• A) Credit
• B) Debit
• C) Either debit or credit
• D) Zero
• Answer: B
• Rationale: Expenses have a normal debit balance because
they decrease stockholders' equity.
Question 5
What is the normal balance for a revenue account?
• A) Debit
• B) Credit
• C) Either debit or credit
• D) Zero
• Answer: B
• Rationale: Revenues have a normal credit balance because
they increase stockholders' equity.
