Accounting 101 – Final Exam Study Guide Questions with
Verified Solutions (GAAP, Inventory, Depreciation)
Description:
This Accounting 101 study guide from Ivy Tech includes final exam practice
questions with verified solutions. It covers GAAP principles, financial reporting,
journalizing, trial balance, accrual accounting, and adjusting entries. The document
also includes inventory valuation (FIFO, LIFO, Specific Identification), bad debt
accounting, bank reconciliations, and depreciation methods. A complete and
reliable guide for first-year accounting students.
What is the primary responsibility of FASB? - answer✔✔Developing GAAP What is
the accounting equation? - answer✔✔Assets=Liability+Equity What is the
definition of revenue? - answer✔✔Money earned from providing a product or
service Is CoGS an expense? - answer✔✔Yes What is the primary objective of
financial reporting? - answer✔✔To provide info for decision making What
accounts are on the balance sheet? - answer✔✔Assets, liabilities, equity What
1
accounts are on the income statement? - answer✔✔Revenues, expenses How
Page
, does purchasing equipment on credit affect the Accounting Equation? -
answer✔✔Assets increase, liabilities increase What is the normal balance for
assets, liabilities, revenues, and expenses? - answer✔✔Debit, credit, credit, credit
What is the definition of journalizing? - answer✔✔Recording transactions What is
a trial balance? - answer✔✔A statement that lists company's accounts with
ending balances What is the order of accounts on a trial balance? -
answer✔✔Assets, liabilities, common stock, dividends, revenue, expenses When
are revenue and expenses recognized in accrual accounting? - answer✔✔When
earned and when incurred What is the adjusting entry for accrued wages? -
answer✔✔salaries expense/salaries payable Closing entries - answer✔✔Set to
0 at the end of each year and balances are transferred to retained earnings What is
the equation for gross profit? - answer✔✔Gross profit=Net Sales-CoGS What is
the equation for net sales? - answer✔✔Net sales=Sales-sales returns and
allowances What is the equation for net income? - answer✔✔Net income=Sales-
All expenses What does "2/10, n/30" mean? - answer✔✔2 percent discount if
paid in full within 10 days Ending Inventory=? - answer✔✔Beginning
inventory+purchases-CoGS What type of account is inventory? - answer✔✔Asset
What happens to inventory when it is sold? - answer✔✔It becomes an expense
What does FOB shipping point mean? - answer✔✔Ownership transfers at shipping
point What does FOB destination mean? - answer✔✔Ownership transfers upon
2
Page
Verified Solutions (GAAP, Inventory, Depreciation)
Description:
This Accounting 101 study guide from Ivy Tech includes final exam practice
questions with verified solutions. It covers GAAP principles, financial reporting,
journalizing, trial balance, accrual accounting, and adjusting entries. The document
also includes inventory valuation (FIFO, LIFO, Specific Identification), bad debt
accounting, bank reconciliations, and depreciation methods. A complete and
reliable guide for first-year accounting students.
What is the primary responsibility of FASB? - answer✔✔Developing GAAP What is
the accounting equation? - answer✔✔Assets=Liability+Equity What is the
definition of revenue? - answer✔✔Money earned from providing a product or
service Is CoGS an expense? - answer✔✔Yes What is the primary objective of
financial reporting? - answer✔✔To provide info for decision making What
accounts are on the balance sheet? - answer✔✔Assets, liabilities, equity What
1
accounts are on the income statement? - answer✔✔Revenues, expenses How
Page
, does purchasing equipment on credit affect the Accounting Equation? -
answer✔✔Assets increase, liabilities increase What is the normal balance for
assets, liabilities, revenues, and expenses? - answer✔✔Debit, credit, credit, credit
What is the definition of journalizing? - answer✔✔Recording transactions What is
a trial balance? - answer✔✔A statement that lists company's accounts with
ending balances What is the order of accounts on a trial balance? -
answer✔✔Assets, liabilities, common stock, dividends, revenue, expenses When
are revenue and expenses recognized in accrual accounting? - answer✔✔When
earned and when incurred What is the adjusting entry for accrued wages? -
answer✔✔salaries expense/salaries payable Closing entries - answer✔✔Set to
0 at the end of each year and balances are transferred to retained earnings What is
the equation for gross profit? - answer✔✔Gross profit=Net Sales-CoGS What is
the equation for net sales? - answer✔✔Net sales=Sales-sales returns and
allowances What is the equation for net income? - answer✔✔Net income=Sales-
All expenses What does "2/10, n/30" mean? - answer✔✔2 percent discount if
paid in full within 10 days Ending Inventory=? - answer✔✔Beginning
inventory+purchases-CoGS What type of account is inventory? - answer✔✔Asset
What happens to inventory when it is sold? - answer✔✔It becomes an expense
What does FOB shipping point mean? - answer✔✔Ownership transfers at shipping
point What does FOB destination mean? - answer✔✔Ownership transfers upon
2
Page
