Accounting 201 FINAL EXAM Questions With
Accurate Solutions
entity - CORRECT ANSWER✅✅✅a person, unit, organization or group
proprietorship - CORRECT ANSWER✅✅✅business owned by one person
partnership - CORRECT ANSWER✅✅✅business owned by two or more persons or entities
corporation - CORRECT ANSWER✅✅✅business owned by one or more entities who own
shares of stock in the business. Separate entity than it's owners, limited liability
assets= - CORRECT ANSWER✅✅✅liabilities + stockholder's equity
how to find net income - CORRECT ANSWER✅✅✅revenue - expenses
how to find ending retained earnings - CORRECT ANSWER✅✅✅beginning retained
earnings + net income - dividends
how to find total stockholder's equity - CORRECT ANSWER✅✅✅retained earnings +
common stock
the 4 financial statements should be prepared in which order - CORRECT
ANSWER✅✅✅income statement, statement of retained earnings, balance sheet, statement
of cash flows
financial accounting is principally concerned with: - CORRECT ANSWER✅✅✅reporting
to external users
,what do liquidity ratios measure - CORRECT ANSWER✅✅✅the short term ability of a
company to pay it's obligations as they are due and meet unexpected cash needs
calculate current ratio - CORRECT ANSWER✅✅✅current assets / current liabilites
calculate working capital - CORRECT ANSWER✅✅✅current assets - current liabilites
what is earnings per share (EPS), what does it measure, and how do you calculate - CORRECT
ANSWER✅✅✅net income earned on each share of common stock; measures the company's
profitability.
(net income - preferred stock dividends) / average common stock shares outstanding
what do solvency ratios measures - CORRECT ANSWER✅✅✅measure the ability of the
company to survive over a long period of time
debt to total assets ratio definition & calculation - CORRECT ANSWER✅✅✅measures the
percentage of total financing provided by creditors.
total liabilities / total assets
free cash flow - CORRECT ANSWER✅✅✅cash provided by operating activities adjusted
for capital expenditures and dividends paid
expense recognition principle (matching) requires...? - CORRECT ANSWER✅✅✅that costs
(expenses) be recognized in the same accounting period of their related revenue
faithful representation - CORRECT ANSWER✅✅✅info is complete, neutral, and free from
error
going concern assumption - CORRECT ANSWER✅✅✅principle that assumes the
enterprise will continue into the foreseeable future
, revenue recognition principle - CORRECT ANSWER✅✅✅revenue is recognized in the
time period of when it is earned, which is not always the same time period it is recieved
cost of goods sold is recorded as - CORRECT ANSWER✅✅✅an expense
long term assets held for use in the production or sale of other assets or services - CORRECT
ANSWER✅✅✅plant and equipment
how would you write the journal entry:
completed payroll for Jordan Valley and billed $440 for services - CORRECT
ANSWER✅✅✅Accounts receivable 440
Service Rev. 440
how would you write the journal entry:
received $200 cash in advance from Jones to set up accounting system - CORRECT
ANSWER✅✅✅debit: Cash 200 credit: Unearned Rev. 200
how to find the book value - CORRECT ANSWER✅✅✅cost of asset - accum. depreciation
with cash-basis accounting, when do you record revenue and expenses? - CORRECT
ANSWER✅✅✅recording revenue when cash is received, & record expense when cash is
paid
accrual-basis accounting
(preferred over cash-basis accounting) - CORRECT ANSWER✅✅✅records rev. in the
period when rev. is earned (rev. recognition principle) and matches expenses to the period in
which the rev. was earned (expense recognition principle)
Accurate Solutions
entity - CORRECT ANSWER✅✅✅a person, unit, organization or group
proprietorship - CORRECT ANSWER✅✅✅business owned by one person
partnership - CORRECT ANSWER✅✅✅business owned by two or more persons or entities
corporation - CORRECT ANSWER✅✅✅business owned by one or more entities who own
shares of stock in the business. Separate entity than it's owners, limited liability
assets= - CORRECT ANSWER✅✅✅liabilities + stockholder's equity
how to find net income - CORRECT ANSWER✅✅✅revenue - expenses
how to find ending retained earnings - CORRECT ANSWER✅✅✅beginning retained
earnings + net income - dividends
how to find total stockholder's equity - CORRECT ANSWER✅✅✅retained earnings +
common stock
the 4 financial statements should be prepared in which order - CORRECT
ANSWER✅✅✅income statement, statement of retained earnings, balance sheet, statement
of cash flows
financial accounting is principally concerned with: - CORRECT ANSWER✅✅✅reporting
to external users
,what do liquidity ratios measure - CORRECT ANSWER✅✅✅the short term ability of a
company to pay it's obligations as they are due and meet unexpected cash needs
calculate current ratio - CORRECT ANSWER✅✅✅current assets / current liabilites
calculate working capital - CORRECT ANSWER✅✅✅current assets - current liabilites
what is earnings per share (EPS), what does it measure, and how do you calculate - CORRECT
ANSWER✅✅✅net income earned on each share of common stock; measures the company's
profitability.
(net income - preferred stock dividends) / average common stock shares outstanding
what do solvency ratios measures - CORRECT ANSWER✅✅✅measure the ability of the
company to survive over a long period of time
debt to total assets ratio definition & calculation - CORRECT ANSWER✅✅✅measures the
percentage of total financing provided by creditors.
total liabilities / total assets
free cash flow - CORRECT ANSWER✅✅✅cash provided by operating activities adjusted
for capital expenditures and dividends paid
expense recognition principle (matching) requires...? - CORRECT ANSWER✅✅✅that costs
(expenses) be recognized in the same accounting period of their related revenue
faithful representation - CORRECT ANSWER✅✅✅info is complete, neutral, and free from
error
going concern assumption - CORRECT ANSWER✅✅✅principle that assumes the
enterprise will continue into the foreseeable future
, revenue recognition principle - CORRECT ANSWER✅✅✅revenue is recognized in the
time period of when it is earned, which is not always the same time period it is recieved
cost of goods sold is recorded as - CORRECT ANSWER✅✅✅an expense
long term assets held for use in the production or sale of other assets or services - CORRECT
ANSWER✅✅✅plant and equipment
how would you write the journal entry:
completed payroll for Jordan Valley and billed $440 for services - CORRECT
ANSWER✅✅✅Accounts receivable 440
Service Rev. 440
how would you write the journal entry:
received $200 cash in advance from Jones to set up accounting system - CORRECT
ANSWER✅✅✅debit: Cash 200 credit: Unearned Rev. 200
how to find the book value - CORRECT ANSWER✅✅✅cost of asset - accum. depreciation
with cash-basis accounting, when do you record revenue and expenses? - CORRECT
ANSWER✅✅✅recording revenue when cash is received, & record expense when cash is
paid
accrual-basis accounting
(preferred over cash-basis accounting) - CORRECT ANSWER✅✅✅records rev. in the
period when rev. is earned (rev. recognition principle) and matches expenses to the period in
which the rev. was earned (expense recognition principle)
