Accounting 201 Final Exam Review Chapters 1-11 With Complete Solutions 2024

Accounting 201 Final Exam Review Chapters 1-11 With Complete Solutions 2024Which if the following is not a step in the accounting process a. identification b. economic entity c. recording d. communication - correct answer-b. economic entity Which of the following statements about users of accounting information is incorrect? a. management is an internal user b. taxing authorities are external users c. present creditors are external users d. regulatory authorities are internal users - correct answer-d. regulatory authorities are internal users; they are external users The historical cost principle states that: a. assets should be initally recorded at cost and adjusted when the fair value changes b. activities of an entity are to be kept separate and distinct from its owner c. assets should be recorded at their cost d. only transaction data capable of being expressed in terms of money be included in the accounting records - correct answer-c. assets should be recorded at their cost. The other choices are incorrect because (a) the historical cost principle does not say that assets should be adjusted for changes in fair value, (b) describes the economic entity assumption, and (d) describes the monetary unit assumption. Which of the following statements about basic assumptions is correct? a. basic assumptions are the same as accounting principles b. the economic entity assumption states that there should be a particular unit of accountability c. the monetary unit assumption enables accounting to measure employee morale d. partnerships are not economic entities - correct answer-b. The economic entity assumption states that there should be a particular unit of accountability. The economic entity assumption states that there should be a particular unit of accountability. The other choices are incorrect because (a) basic assumptions are not the same as accounting principles, (c) the monetary unit assumption allows accounting to measure economic events, and (d) partnerships are economic entities. 3 types of business entities are: a. proprietorships, small businesses, and partnerships b. proprietorships, partnerships, and corporations c. proprietorships, partnerships, and large businesses d. financial, manufacturing, and service companies - correct answer-b. proprietorships, partnerships, and corporations Net income will result during a time period when: a. assets exceed liabilities b. assets exceed revenues c. expenses exceed revenues d. revenues exceed expenses - correct answer-d. revenues exceed expenses As of December 31, 2020, Reed Company has assets of $3,500 and stockholder's equity of $1,500. What are the liabilities for Reed Company as of December 31, 2020? a. $1,500 b. $1,000 c. $2,500 d. $2,000 - correct answer-d. $2,000 Performing services on account will have the following effects on the components of the basic accounting equation: (SE=stockholder's equity) a. increase assets and decrease SE b. increase assets and increase SE c. Increase assets and increase liabilities d. increase liabilities and increase SE - correct answer-b. increase assets and increase SE Which of the following events is not recorded in the accounting records? a. equipment purchased on account b. an employee is terminated c. a cash investment is made into the business d. the company pays a cash dividend - correct answer-b. an employee is terminated During 2020, Seisor Company's assets decreased $50,000 and its liabilities decreased $90,000. Its SE therefore: a. increased $40,000 b. decreased $140,000 c. decreased $40,000 increased $140,000 - correct answer-a. increased $40,000