ACC 290 Final Exam Questions and answers 2022 update| 100% correct

ACC 290 Final Exam 1) Which financial statement is used to determine cash generated from operations? A. Income statement B. Statement of operations C. Statement of cash flows D. Retained earnings statement 2) In terms of sequence, in what order must the four basic financial statements be prepared? A. Balance sheet, income statement, statement of cash flows, & capital statement B. Income statement, capital statement, statement of cash flows, & balance sheet C. Balance sheet, capital statement, statement of cash flows, & income statement D. Income statement, capital statement, balance sheet, & statement of cash flows 3. In classifying transactions, which of the following is true in regard to assets? A. Normal balances & increases are debits B. Normal balances & decreases are credits C. Normal balances can either be debits or credits for assets D. Normal balances are debits & increases can be debits or credits 4. An increase in an expense account must be A. debited B. credited C. either debited or credited, depending on the circumstances D. capitalized 5. ABC Corporation issues 100 shares of $1 par common stock at $5 per share, which of the following is the correct journal entry? A. Cash $100, Common Stock $ 100 B. Cash $500, Common Stock $500 C. Cash $500, Paid-in-Capital, Excess of Par 400, Common Stock $ 500 D. Cash $100, Paid-in-Capital, Excess of Par 400, Common Stock $ 500 6. In the first month of operations, the total of the debit entries to the cash account amounted to $1,400 & the total of the credit entries to the cash account amounted to $600. The cash account has a A. $600 credit balance B. $1,400 debit balance C. $800 debit balance D. $800 credit balance 7. Which ledger contains control accounts? A. Accounts receivable subsidiary ledger B. General ledger C. Accounts payable subsidiary ledger D. General revenue & expense ledger This study source was downloaded by from CourseH on :54:50 GMT -06:00 8. Smith is a customer of ABC Corporation. Smith typically purchases merchandise from ABC on account. Which ledger would ABC use to keep track of the details of Smith’s account? A. Accounts receivable subsidiary ledger B. Accounts receivable control ledger C. General ledger D. Accounts payable subsidiary ledger 9. Under the cash basis of accounting A. revenue is recognized when services are performed B. expenses are matched with the revenue that is produced C. cash must be received before revenue is recognized D. a promise to pay is sufficient to recognize revenue 10. Under the accrual basis of accounting A. cash must be received before revenue is recognized B. net income is calculated by matching cash outflows against cash inflows C. events that change a company’s financial statements are recognized in the period they occur rather than in the period in which the cash is paid or received D. the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles 11. The Vintage Laundry Company purchased $6,500 worth of laundry supplies on June 2 & recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $2,000 on hand. The adjusting entry that should be made by the company on June 30 is A. debit Laundry Expense, $2,000; credit Laundry Expense $2,000 B. debit Laundry Expense, $4,500; credit Laundry Supplies Expense, $4,500 C. debit Laundry Supplies, $2,000; credit Laundry Supplies Expense, $2,000 D. debit Laundry Supplies Expense, $4,500; credit Laundry Supplies, $4,500 12. Greese Company purchased office supplies costing $4,000 & debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,100 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be A. debit Office Supplies Expense, $1,100; credit Office Supplies, $1,100 B. debit Office Supplies, $2,900; credit Office Supplies Expense, $2,900 C. debit Office Supplies Expense, $2,900; credit Office Supplies, $2,900 D. debit Office Supplies, $1,100; credit Office Supplies Expense, $1,100 13. Based on the account balance below, what is the total of the debit & credit columns of the adjusted trial balance? This study source was downloaded by from CourseH on :54:50 GMT -06:00 A. $9,150 B. $ 10, 840 C. $9,560 D. $10,430 14. An adjusted trial balance A. is prepared after the financial statements are completed B. proves the equality of the total debit balances & total credit balances of ledger accounts after all adjustments have been made C. is a required financial statement under generally accepted accounting principles D. cannot be used to prepare financial statements 15. Given the following adjusted trial balance: Debit Credit Cash 781 Accounts receivable 1,049 Inventory 1,562 Prepaid Rent 43 Property, Plant& Equipment 150 Accumulated depreciation 23 Accounts Payable 41 Unearned Revenue 21 Common Stock 60 Retained earnings 3,305 Service revenue 177 Interest revenue 43 Salary expense 113 Total $3,698 $3,698 Net income for the year is A. $248 B. $135 C. $162 D. $49 16. Given the following adjusted trial balance, what will be the totals for the debit & credit columns of the post-closing trial balance? A. $7,396 B. $7,118 C. $7,334 D. $7,170 17. Given the following adjusted trial balance: A. $3,256 B. $3,170 C. $3,440 This study source was downloaded by from CourseH on :54:50 GMT -06:00 D. $3,354 18. Net income is recorded on the work sheet under the A. debit column of the adjusted trial balance & the credit column of retained earnings B. debit column of the income statement & the credit column of the balance sheet C. credit column of the adjusted trial balance & the debit column of retained earnings D. credit column of the income statement & the debit column of the balance sheet 19. At the beginning of the year, Uptown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,500,000. If Uptown Athletic reported ending inventory of $600,000 & sales of $2,000,000, their cost of goods sold & gross profit rate would be A. $900,000 & 65% B. $1,300,000 & 35% C. $900,000 & 35% D. $1,300,000 & 65% 20. During the year, Sarah’s Pet Shop’s merchandise inventory decreased by $30,000. If the company’s cost of goods sold for the year was $450,000, purchases would have been A. $480,000 B. $420,000 C. $390,000 D. Insufficient data to determine 21. At the beginning of the year, Wildcat Athletic had an inventory of $200,000. During the year, the company purchased goods costing $700,000. If acc 290 final exam Wildcat Athletic reported ending inventory of $300,000 & sales of $1,000,000, their cost of goods sold & gross profit rate would be A. $400,000 & 60% B. $600,000 & 40% C. $400,000 & 40% D. $600,000 & 60% 22. The entry to record of sale of $900 with terms of 2/10, n/30 will include a A. debit to Sales Discount for $18 B. debit to Sales Revenue for $882 C. credit to Accounts Receivable for $900 D. credit to Sales Revenue for $900 23.Dobler Company uses a periodic inventory system. Details for the inventory account for the month of January 2012 are as follows: An end of the month (1/31/2012), inventory showed that 140 units were on hand. If the company uses LIFO, what is the value of the ending inventory? A. $737 B. $700 C. $762 D. $1,380 This study source was downloaded by from CourseH on :54:50 GMT -06:00 24. The difference between ending inventory using LIFO & ending inventory using FIFO is referred to as A. FIFO reserve B. inventory reserve C. LIFO reserve D. periodic reserve 25. A consistent application of an inventory costing method enhances A. conservatism B. accuracy C. comparability D. efficiency 26. The accountant at Patton Company has determined that income before income taxes amounted to $11,000 using the FIFO costing assumption. If the income tax rate is 30% & the amount ofincome taxes paid would be $300 acc290 final exam greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption? A. $11,30 B. $12,00 C. $10,000 D. $10,700 27. A very small company would have the most difficulty in implementing which of the fllowing internal control activities? . Separation of duties . Limited access to assets . Periodic independent verification . Sound personnel procedures 28. A system of internal control A. is infallible B. can be rendered ineffective by employee collusion C. invariably will have costs exceeding benefits D. is premised on the concept of absolute assurance 29. The custodian of a company asset should A. have access to the accounting record for that asset B. be someone outside the company C. not have access to the accounting record for that asset D. be an accountant 30. The Sarbanes Oxley Act (2002) applies to A. U.S. companies but not international companies B. international companies but not U.S. companies C. U.S. & Canadian companies but not other international companies D. U.S. & international companies This study source was downloaded by from CourseH on :54:50 GMT -06:00 Week 1 DQ3 What are debits & credits? How are debits & credits used to record business transactions? Why do accountants debit asset accounts to increase them but credit liability accounts to increase them? Why do accountants debit expenses to increase them but credit revenues to increase them? A debit is an asset or increase in cash (left column). Debits normally increase assets & decrease liabilities & credits normally decrease assets & increase liabilities. A credit is a decrease in cash (right column). Debits & credits are used to record business transactions by the type of account that is used. Expense & assets are increased on the debit or left side & liability equity & revenue accounts are increased on the credit side. Every transaction must be balanced & in order to accomplish this, a transaction must be posted to an account on the left side as well as to an account on the right side. Assets = liabilities + stockholder’s equity. Accountants debit asset accounts to increase them & credit liability accounts to increase them because double entry accounting is required to make every entry balance out. This doubly entry assures that if an asset is increased then a corresponding account is decreased or an increase in a liability or an increase in stockholder’s equity. References Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2011). Financial accounting: Tools for business decision making (6th ed.). Hoboken, NJ: John Wiley & Sons. University of Phoenix. ( 2011). Week One Supplemental notes: debit vs credit. Retrieved from University of Phoenix, ACC290 - Principles of Accounting I website. This study source was downloaded by from CourseH on :54:50 GMT -06:00 Powered by TCPDF ()