ACC 201 UPDATED ACTUAL Exam
Questions and CORRECT Answers
Liabilities of a company are owed to - CORRECT ANSWER -creditors
Which of the following is not a reason one set of international accounting standards are needed?
- CORRECT ANSWER -All of these answer choices are reasons one set of international
accounting standards are needed.
If expenses are paid in cash, then - CORRECT ANSWER -assets will decrease
If an owner makes a withdrawal of cash from a proprietorship, then - CORRECT
ANSWER -owner's equity will decrease
Net income for the period is determined by subtracting total expenses and drawings from total
revenues. - CORRECT ANSWER -False
At October 1, Arcade Fire Enterprises reported owner's equity of $70,000. During October, the
owner made additional investments of $4,000 and the company earned net income of $14,000. If
owner's equity at October 31 totals $80,000, what amount of owner drawings were made during
the month? - CORRECT ANSWER -(70000+4000+14000) - 80000 = $8,000
Which one of the following is not an external user of accounting information? - CORRECT
ANSWER -All of these answers choices are external users
At the time an asset is acquired, cost and fair value should be the same - CORRECT
ANSWER -True
The partnership form of business organization - CORRECT ANSWER -is a common form
of organization for service-type businesses
, Accounting communicates financial information about a business enterprise to both internal and
external users - CORRECT ANSWER -True
Each transaction must be analyzed in terms of its effect on the accounts before it can be recorded
in a journal. - CORRECT ANSWER -True
An account is a part of the financial information system and is described by all except which one
of the following? - CORRECT ANSWER -An account is a source document.
A simple journal entry requires only one debit to an account and one credit to an account. -
CORRECT ANSWER -True
Deerhoof Company purchases equipment for $2,700 and supplies for $400 from Milkman Co.
for $3,100 cash. The entry for this transaction will include a - CORRECT ANSWER -debit
to Equipment $2,700 and a debit to Supplies $400 for Deerhoof.
Camper Van Company purchased equipment for $2,600 cash. As a result of this event, -
CORRECT ANSWER -total assets remained unchanged
An account is an individual accounting record of increases and decreases in specific -
CORRECT ANSWER -assets, liabilities, and owner's equity items.
The usual sequence of steps in the recording process is to analyze each transaction, enter the
transaction in the - CORRECT ANSWER -journal, and transfer the information to the
ledger accounts.
During February 2014, its first month of operations, the owner of Ariel Pink Enterprises invested
cash of $50,000. Ariel had cash revenues of $10,000 and paid expenses of $14,000. Assuming no
other transactions impacted the cash account, what is the balance in Cash at February 28? -
CORRECT ANSWER -50000+10000 - 14000 = $46,000
Questions and CORRECT Answers
Liabilities of a company are owed to - CORRECT ANSWER -creditors
Which of the following is not a reason one set of international accounting standards are needed?
- CORRECT ANSWER -All of these answer choices are reasons one set of international
accounting standards are needed.
If expenses are paid in cash, then - CORRECT ANSWER -assets will decrease
If an owner makes a withdrawal of cash from a proprietorship, then - CORRECT
ANSWER -owner's equity will decrease
Net income for the period is determined by subtracting total expenses and drawings from total
revenues. - CORRECT ANSWER -False
At October 1, Arcade Fire Enterprises reported owner's equity of $70,000. During October, the
owner made additional investments of $4,000 and the company earned net income of $14,000. If
owner's equity at October 31 totals $80,000, what amount of owner drawings were made during
the month? - CORRECT ANSWER -(70000+4000+14000) - 80000 = $8,000
Which one of the following is not an external user of accounting information? - CORRECT
ANSWER -All of these answers choices are external users
At the time an asset is acquired, cost and fair value should be the same - CORRECT
ANSWER -True
The partnership form of business organization - CORRECT ANSWER -is a common form
of organization for service-type businesses
, Accounting communicates financial information about a business enterprise to both internal and
external users - CORRECT ANSWER -True
Each transaction must be analyzed in terms of its effect on the accounts before it can be recorded
in a journal. - CORRECT ANSWER -True
An account is a part of the financial information system and is described by all except which one
of the following? - CORRECT ANSWER -An account is a source document.
A simple journal entry requires only one debit to an account and one credit to an account. -
CORRECT ANSWER -True
Deerhoof Company purchases equipment for $2,700 and supplies for $400 from Milkman Co.
for $3,100 cash. The entry for this transaction will include a - CORRECT ANSWER -debit
to Equipment $2,700 and a debit to Supplies $400 for Deerhoof.
Camper Van Company purchased equipment for $2,600 cash. As a result of this event, -
CORRECT ANSWER -total assets remained unchanged
An account is an individual accounting record of increases and decreases in specific -
CORRECT ANSWER -assets, liabilities, and owner's equity items.
The usual sequence of steps in the recording process is to analyze each transaction, enter the
transaction in the - CORRECT ANSWER -journal, and transfer the information to the
ledger accounts.
During February 2014, its first month of operations, the owner of Ariel Pink Enterprises invested
cash of $50,000. Ariel had cash revenues of $10,000 and paid expenses of $14,000. Assuming no
other transactions impacted the cash account, what is the balance in Cash at February 28? -
CORRECT ANSWER -50000+10000 - 14000 = $46,000
