ACC 101 Exam questions with
answers rated A+
Name the two recognition principles used as guidelines in accrual basis accounting. -
ANS✅✅Revenue and expense recognition principles
Adjusting entries are divided into two main categories. What are those categories? -
ANS✅✅Deferrals and Accruals
How often are adjusting entries prepared? - ANS✅✅Anytime that financial statements are
prepared
How many journal entries are involved in closing the books? - ANS✅✅4: Close revenues, expenses,
income summary and dividends
After the books are closed, what do we prepare? - ANS✅✅Post- closing trial balance
On the post-closing trial balance, the only accounts that should remain are__________? -
ANS✅✅Permanent accounts
The two types of systems used to account for inventory. What are they? - ANS✅✅Perpetual and
periodic
What is the main difference between a perpetual and periodic inventory system? -
ANS✅✅Periodic does not keep detailed inventory records, but perpetual keeps constant detailed
records
What do the credit terms 1/10, n/30 mean? - ANS✅✅If paid within 10 days, a 1% discount is
applied, otherwise net payment due in 30 days
What is the definition of a merchandising company? - ANS✅✅A company that buys and sells
merchandise
What does LIFO stand for? - ANS✅✅Last in, First out
answers rated A+
Name the two recognition principles used as guidelines in accrual basis accounting. -
ANS✅✅Revenue and expense recognition principles
Adjusting entries are divided into two main categories. What are those categories? -
ANS✅✅Deferrals and Accruals
How often are adjusting entries prepared? - ANS✅✅Anytime that financial statements are
prepared
How many journal entries are involved in closing the books? - ANS✅✅4: Close revenues, expenses,
income summary and dividends
After the books are closed, what do we prepare? - ANS✅✅Post- closing trial balance
On the post-closing trial balance, the only accounts that should remain are__________? -
ANS✅✅Permanent accounts
The two types of systems used to account for inventory. What are they? - ANS✅✅Perpetual and
periodic
What is the main difference between a perpetual and periodic inventory system? -
ANS✅✅Periodic does not keep detailed inventory records, but perpetual keeps constant detailed
records
What do the credit terms 1/10, n/30 mean? - ANS✅✅If paid within 10 days, a 1% discount is
applied, otherwise net payment due in 30 days
What is the definition of a merchandising company? - ANS✅✅A company that buys and sells
merchandise
What does LIFO stand for? - ANS✅✅Last in, First out
