ACCT 201A Final Exam Review CSUF
QUESTIONS & ANSWERS(GRADED A+)
Definition that best describes financial accounting? - ANSWERMeasuring a
company's business activities and communicating those measurements to external
parties.
The balance in retained earnings represents: - ANSWERThe amount of income
earned over the company's life minus the dividends paid to shareholders over the
company's life.
Who ultimately is responsible for properly applying GAAP? The company's: -
ANSWERManagement
A company reports the following in its income statement: Total revenues of $500,000
and total expenses of $300,000. So, - ANSWERNet income equals $200,000
The primary function(s) of financial accounting is(are) to: - ANSWERMeasure
business activities of a company and communicate information about business
activities to outside users.
Financial accounting provides information primarily to - ANSWERInvestors and
creditors
What represents a resource of the company? - ANSWERAn asset
What represents an obligation of the company? - ANSWERA liability
What describes the cost of selling to customers? - ANSWERExpenses
fundamental accounting equation? - ANSWERAssets = Liabilities + Owner's Equity
Expenses represent: - ANSWERCosts of providing products or services to
customers.
Amounts owed to creditors are reported as - ANSWERliabilities
In which financial statement does a company report its revenues? - ANSWERIncome
Statement
The financial statement that shows the financial position of a company at a specific
point in time is called the - ANSWERBalance Sheet
Which financial statement shows a company's revenues and expenses? -
ANSWERIncome Statement
.
, A company reports the following in its balance sheet: Total assets of $800,000 and
total liabilities of $700,000. Which of the following is true? - ANSWERTotal
stockholders' equity equals $100,000.
Which financial statement shows that a company's resources equal claims to those
resources? - ANSWERBalance Sheet
Which financial statement conveys a company's ability to generate profits in the
current period? - ANSWERIncome Statement
Sales of products or services are referred to as - ANSWERrevenues
Financial accounting serves which primary function(s)?
1)Measures business activities.
2)Communicates business activities to interested parties.
3)Makes business decisions on behalf of interested parties. - ANSWER1 and 2
Transactions are recorded using debits and credits in a - ANSWERJournal
After transactions are recorded in the journal, they are posted to the: -
ANSWERGeneral Ledger
All transactions related to a particular item over a period of time are summarized in
a(n): - ANSWERAccount
A list of all account names used to record transactions of a company is referred to as
a: - ANSWERChart of Accounts
Which step in the process of measuring external transactions involves assessing the
equality of total debits and total credits? - ANSWERPost the transaction to the T-
account in the general ledger.
Example of a transaction that increases total assets? - ANSWERProvide services to
customers on account.
Example of a transaction that increases total liabilities? - ANSWERPurchase office
supplies on account.
Which of the following transactions decreases total assets? - ANSWERPay
dividends to stockholders
Purchasing land with cash would have what effect on the accounting equation? -
ANSWERNo effect.
Example of a transaction that causes a decrease in total liabilities? -
ANSWERRepay amounts previously borrowed from the bank.
A company owes employee salaries of $5,000 on December 31 for work completed
in the current year, but the company doesn't plan to pay those salaries until the
QUESTIONS & ANSWERS(GRADED A+)
Definition that best describes financial accounting? - ANSWERMeasuring a
company's business activities and communicating those measurements to external
parties.
The balance in retained earnings represents: - ANSWERThe amount of income
earned over the company's life minus the dividends paid to shareholders over the
company's life.
Who ultimately is responsible for properly applying GAAP? The company's: -
ANSWERManagement
A company reports the following in its income statement: Total revenues of $500,000
and total expenses of $300,000. So, - ANSWERNet income equals $200,000
The primary function(s) of financial accounting is(are) to: - ANSWERMeasure
business activities of a company and communicate information about business
activities to outside users.
Financial accounting provides information primarily to - ANSWERInvestors and
creditors
What represents a resource of the company? - ANSWERAn asset
What represents an obligation of the company? - ANSWERA liability
What describes the cost of selling to customers? - ANSWERExpenses
fundamental accounting equation? - ANSWERAssets = Liabilities + Owner's Equity
Expenses represent: - ANSWERCosts of providing products or services to
customers.
Amounts owed to creditors are reported as - ANSWERliabilities
In which financial statement does a company report its revenues? - ANSWERIncome
Statement
The financial statement that shows the financial position of a company at a specific
point in time is called the - ANSWERBalance Sheet
Which financial statement shows a company's revenues and expenses? -
ANSWERIncome Statement
.
, A company reports the following in its balance sheet: Total assets of $800,000 and
total liabilities of $700,000. Which of the following is true? - ANSWERTotal
stockholders' equity equals $100,000.
Which financial statement shows that a company's resources equal claims to those
resources? - ANSWERBalance Sheet
Which financial statement conveys a company's ability to generate profits in the
current period? - ANSWERIncome Statement
Sales of products or services are referred to as - ANSWERrevenues
Financial accounting serves which primary function(s)?
1)Measures business activities.
2)Communicates business activities to interested parties.
3)Makes business decisions on behalf of interested parties. - ANSWER1 and 2
Transactions are recorded using debits and credits in a - ANSWERJournal
After transactions are recorded in the journal, they are posted to the: -
ANSWERGeneral Ledger
All transactions related to a particular item over a period of time are summarized in
a(n): - ANSWERAccount
A list of all account names used to record transactions of a company is referred to as
a: - ANSWERChart of Accounts
Which step in the process of measuring external transactions involves assessing the
equality of total debits and total credits? - ANSWERPost the transaction to the T-
account in the general ledger.
Example of a transaction that increases total assets? - ANSWERProvide services to
customers on account.
Example of a transaction that increases total liabilities? - ANSWERPurchase office
supplies on account.
Which of the following transactions decreases total assets? - ANSWERPay
dividends to stockholders
Purchasing land with cash would have what effect on the accounting equation? -
ANSWERNo effect.
Example of a transaction that causes a decrease in total liabilities? -
ANSWERRepay amounts previously borrowed from the bank.
A company owes employee salaries of $5,000 on December 31 for work completed
in the current year, but the company doesn't plan to pay those salaries until the
