ACG 2021 Intro to Financial Accounting
Full Finals Exam Review (Qns & Ans)
2025
1. Multiple Choice
A company purchased equipment for $50,000. It estimated a
residual value of $5,000 and a useful life of 10 years. Using the
straight-line depreciation method, what is the annual depreciation
expense?
A. $4,500
B. $5,000
C. $4,000
D. $3,000
©2025
, ANS: C. $4,500
Rationale: Depreciation Expense = (Cost - Residual Value) /
Useful Life = ($50,000 - $5,000) / 10 = $4,500 annually.
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2. Fill-in-the-Blank
The _ principle in financial accounting requires that expenses be
matched with the revenues they help to generate.
ANS: Matching
Rationale: The matching principle ensures that all expenses are
recorded in the same period as the revenues they relate to,
providing an accurate financial picture.
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3. True/False
A trial balance ensures that all transactions in the accounting
system are free from error.
ANS: False
©2025
, Rationale: A trial balance ensures that debits equal credits, but
it does not guarantee the absence of errors like omissions or
incorrect accounts.
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4. Multiple Response
Which of the following are classified as current liabilities? (Select
all that apply.)
A. Accounts payable
B. Notes payable due in 18 months
C. Unearned revenue
D. Accrued expenses
ANS: A, C, D
Rationale: Current liabilities include obligations expected to be
settled within one year, such as accounts payable, unearned
revenue, and accrued expenses.
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5. Multiple Choice
©2025
Full Finals Exam Review (Qns & Ans)
2025
1. Multiple Choice
A company purchased equipment for $50,000. It estimated a
residual value of $5,000 and a useful life of 10 years. Using the
straight-line depreciation method, what is the annual depreciation
expense?
A. $4,500
B. $5,000
C. $4,000
D. $3,000
©2025
, ANS: C. $4,500
Rationale: Depreciation Expense = (Cost - Residual Value) /
Useful Life = ($50,000 - $5,000) / 10 = $4,500 annually.
---
2. Fill-in-the-Blank
The _ principle in financial accounting requires that expenses be
matched with the revenues they help to generate.
ANS: Matching
Rationale: The matching principle ensures that all expenses are
recorded in the same period as the revenues they relate to,
providing an accurate financial picture.
---
3. True/False
A trial balance ensures that all transactions in the accounting
system are free from error.
ANS: False
©2025
, Rationale: A trial balance ensures that debits equal credits, but
it does not guarantee the absence of errors like omissions or
incorrect accounts.
---
4. Multiple Response
Which of the following are classified as current liabilities? (Select
all that apply.)
A. Accounts payable
B. Notes payable due in 18 months
C. Unearned revenue
D. Accrued expenses
ANS: A, C, D
Rationale: Current liabilities include obligations expected to be
settled within one year, such as accounts payable, unearned
revenue, and accrued expenses.
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5. Multiple Choice
©2025
