UTA ACCOUNTING ENTRANCE UPDATED
ACTUAL EXAM QUESTIONS AND CORRECT
ANSWERS
●● The primary private sector that oversees external financial reporting
standards is the:
Answer: Financial Accounting Standards Board
●● Which of the following equations properly represents a derivation of
the fundamental accounting equation?
Answer: Assets - liabilities = owner's equity.
●● Wilson Company owns land which cost $100,000. If a "quick sale"
of the land was necessary to generate cash, the company feels it would
receive only $80,000. The company continues to report the asset on the
balance sheet at $100,000. This is justified under which of the following
concepts?
Answer: The historical-cost principle AND the value is tied to objective
and verifiable past transactions.
●● Retained earnings will change over time because of several factors.
Which of the following factors would explain an increase in retained
earnings?
Answer: Net income
,●● Which of these would be accounted for as an expense?
Answer: Payment of the current period's rent.
●● Which of the following transactions would have no impact on
stockholders' equity?
Answer: Purchases of land from the proceeds of a bank loan.
●● Which of the following would not be included on a balance sheet?
Answer: Sales.
●● _______ is the excess of a company's revenues over expenses for a
given time period.
Answer: Income
●● The general ledger is comprised of numerous individual asset,
liability, equity, revenue, and expense
Answer: Accounts.
●● A liability account should be increased with a _______ and
decreased with a _____
Answer: Credit, Debit
, ●● The normal balance of an expense account is a _____ balance.
Answer: debit
●● The normal balances of accounts correspond to the fundamental
_______
Answer: Accounting equation
●● Evidence of transactions is often provided by receipt of issuance of
accounting forms known as
Answer: Source Documents
●● In any transaction, total debits must
Answer: Equal total credits.
●● To record the payment of a previously established account payable
requires a _________ to the Accounts Payable account.
Answer: Debit
●● RELIC
Answer: Revenue, Equity, and Liabilities are Increased with Credits
●● DEAD
Answer: Debits increase Expenses, Assets, and Dividends.
ACTUAL EXAM QUESTIONS AND CORRECT
ANSWERS
●● The primary private sector that oversees external financial reporting
standards is the:
Answer: Financial Accounting Standards Board
●● Which of the following equations properly represents a derivation of
the fundamental accounting equation?
Answer: Assets - liabilities = owner's equity.
●● Wilson Company owns land which cost $100,000. If a "quick sale"
of the land was necessary to generate cash, the company feels it would
receive only $80,000. The company continues to report the asset on the
balance sheet at $100,000. This is justified under which of the following
concepts?
Answer: The historical-cost principle AND the value is tied to objective
and verifiable past transactions.
●● Retained earnings will change over time because of several factors.
Which of the following factors would explain an increase in retained
earnings?
Answer: Net income
,●● Which of these would be accounted for as an expense?
Answer: Payment of the current period's rent.
●● Which of the following transactions would have no impact on
stockholders' equity?
Answer: Purchases of land from the proceeds of a bank loan.
●● Which of the following would not be included on a balance sheet?
Answer: Sales.
●● _______ is the excess of a company's revenues over expenses for a
given time period.
Answer: Income
●● The general ledger is comprised of numerous individual asset,
liability, equity, revenue, and expense
Answer: Accounts.
●● A liability account should be increased with a _______ and
decreased with a _____
Answer: Credit, Debit
, ●● The normal balance of an expense account is a _____ balance.
Answer: debit
●● The normal balances of accounts correspond to the fundamental
_______
Answer: Accounting equation
●● Evidence of transactions is often provided by receipt of issuance of
accounting forms known as
Answer: Source Documents
●● In any transaction, total debits must
Answer: Equal total credits.
●● To record the payment of a previously established account payable
requires a _________ to the Accounts Payable account.
Answer: Debit
●● RELIC
Answer: Revenue, Equity, and Liabilities are Increased with Credits
●● DEAD
Answer: Debits increase Expenses, Assets, and Dividends.
