ACCY 200 Exam 1 UPDATED ACTUAL
Exam Questions and CORRECT Answers
The time frame associated with a balance sheet is:
a) a single date in the future.
b) a function of the information included in it.
c) a point in time in the past.
d) a one-year past period of time. - CORRECT ANSWER - c) a point in time in the past.
The principle of full disclosure means that the reporting entity must fully disclose:
a) all client data.
b) all proprietary information.
c) all necessary information to prevent a reasonably astute user of financial statements from
being misled.
d) all necessary information to prevent all users of financial statements from being misled. -
CORRECT ANSWER - c) all necessary information to prevent a reasonably astute user of
financial statements from being misled.
The balance sheet might also be called:
a) Statement of Financial Position.
b) Statement of Assets.
c) Statement of Changes in Financial Position.
d) Statement of Equity. - CORRECT ANSWER - a) Statement of Financial Position.
The going concern concept refers to a presumption that:
a) the entity will be profitable in the coming year.
b) the entity will not be involved in a merger within a year.
c) top management of the entity will not change in the coming year.
,d) the entity will continue to operate in the foreseeable future. - CORRECT ANSWER - d) the
entity will continue to operate in the foreseeable future.
Transactions are summarized in:
a) the notes for the financial statements.
b) the independent auditor's report.
c) the entity's accounts.
d) the Accounting Standards Updates (ASUs). - CORRECT ANSWER - c) the entity's
accounts.
An expanded version of the accounting equation could be:
a) Assets + Revenues = Liabilities + Stockholders' Equity − Expenses
b) Assets − Liabilities = Paid-in Capital − Revenues − Expenses
c) Assets = Liabilities + Paid-in Capital + Beginning Retained Earnings + Revenues − Expenses
− Dividends
d) Assets = Liabilities + Paid-in Capital − Revenues + Expenses - CORRECT ANSWER - c)
Assets = Liabilities + Paid-in Capital + Beginning Retained Earnings + Revenues − Expenses −
Dividends
A credit entry will:
a) increase an expense account
b) increase a liability account
c) decrease paid-in capital
d) increase an asset account - CORRECT ANSWER - b) increase a liability account
The effect of an adjustment is:
a) to record cash receipts and payments not previously recorded.
b) to close the books.
c) to correct an entry that was not in balance.
, d) to increase the accuracy of the financial statements. - CORRECT ANSWER - d) to increase
the accuracy of the financial statements.
The effect of an adjustment on the financial statements is usually to:
a) increase net income.
b) increase the accuracy of both the balance sheet and income statement.
c) match revenues and assets.
d) make the balance sheet balance. - CORRECT ANSWER - b) increase the accuracy of both
the balance sheet and income statement.
A debit entry will:
a) increase the balance of an expense account.
b) always increase the account balance.
c) increase the balance of a revenue account.
d) always decrease the account balance. - CORRECT ANSWER - a) increase the balance of
an expense account.
The balance sheet equation can be represented by:
a) Assets = Liabilities + Stockholders' Equity
b) Assets - Liabilities = Stockholders' Equity
c) Net Assets = Stockholders' Equity
d) All of the answers are correct. - CORRECT ANSWER - d) All of the answers are correct.
Retained Earnings represents:
a) par value of common stock outstanding.
b) cash that is available for dividends.
c) cumulative net income that has not been distributed to stockholders as dividends.
d) the amount invested in the entity by the stockholders. - CORRECT ANSWER - c)
cumulative net income that has not been distributed to stockholders as dividends.
Exam Questions and CORRECT Answers
The time frame associated with a balance sheet is:
a) a single date in the future.
b) a function of the information included in it.
c) a point in time in the past.
d) a one-year past period of time. - CORRECT ANSWER - c) a point in time in the past.
The principle of full disclosure means that the reporting entity must fully disclose:
a) all client data.
b) all proprietary information.
c) all necessary information to prevent a reasonably astute user of financial statements from
being misled.
d) all necessary information to prevent all users of financial statements from being misled. -
CORRECT ANSWER - c) all necessary information to prevent a reasonably astute user of
financial statements from being misled.
The balance sheet might also be called:
a) Statement of Financial Position.
b) Statement of Assets.
c) Statement of Changes in Financial Position.
d) Statement of Equity. - CORRECT ANSWER - a) Statement of Financial Position.
The going concern concept refers to a presumption that:
a) the entity will be profitable in the coming year.
b) the entity will not be involved in a merger within a year.
c) top management of the entity will not change in the coming year.
,d) the entity will continue to operate in the foreseeable future. - CORRECT ANSWER - d) the
entity will continue to operate in the foreseeable future.
Transactions are summarized in:
a) the notes for the financial statements.
b) the independent auditor's report.
c) the entity's accounts.
d) the Accounting Standards Updates (ASUs). - CORRECT ANSWER - c) the entity's
accounts.
An expanded version of the accounting equation could be:
a) Assets + Revenues = Liabilities + Stockholders' Equity − Expenses
b) Assets − Liabilities = Paid-in Capital − Revenues − Expenses
c) Assets = Liabilities + Paid-in Capital + Beginning Retained Earnings + Revenues − Expenses
− Dividends
d) Assets = Liabilities + Paid-in Capital − Revenues + Expenses - CORRECT ANSWER - c)
Assets = Liabilities + Paid-in Capital + Beginning Retained Earnings + Revenues − Expenses −
Dividends
A credit entry will:
a) increase an expense account
b) increase a liability account
c) decrease paid-in capital
d) increase an asset account - CORRECT ANSWER - b) increase a liability account
The effect of an adjustment is:
a) to record cash receipts and payments not previously recorded.
b) to close the books.
c) to correct an entry that was not in balance.
, d) to increase the accuracy of the financial statements. - CORRECT ANSWER - d) to increase
the accuracy of the financial statements.
The effect of an adjustment on the financial statements is usually to:
a) increase net income.
b) increase the accuracy of both the balance sheet and income statement.
c) match revenues and assets.
d) make the balance sheet balance. - CORRECT ANSWER - b) increase the accuracy of both
the balance sheet and income statement.
A debit entry will:
a) increase the balance of an expense account.
b) always increase the account balance.
c) increase the balance of a revenue account.
d) always decrease the account balance. - CORRECT ANSWER - a) increase the balance of
an expense account.
The balance sheet equation can be represented by:
a) Assets = Liabilities + Stockholders' Equity
b) Assets - Liabilities = Stockholders' Equity
c) Net Assets = Stockholders' Equity
d) All of the answers are correct. - CORRECT ANSWER - d) All of the answers are correct.
Retained Earnings represents:
a) par value of common stock outstanding.
b) cash that is available for dividends.
c) cumulative net income that has not been distributed to stockholders as dividends.
d) the amount invested in the entity by the stockholders. - CORRECT ANSWER - c)
cumulative net income that has not been distributed to stockholders as dividends.
