ACG EXAM UPDATED QUESTIONS AND
CORRECT ANSWERS.
The financial statement that reports assets, liabilities, and owners' equity is the -
ANS Balance sheet
If liabilities total $150,000 and owners' equity totals $50,000, the assets must total -
ANS $200,000 because assets = liabilities + owners equity
Compute net income: Sales revenue $10,000, Wage expense $4,000, Accounts payable $1,000
and Utilities expense $2,000 - ANS $10,000
-$4,000
-$2,000
= $4,000
Compute total assets: Cash $10,000, Accounts receivable $3,000, Accounts payable $4,000, and
Equipment $20,000 - ANS $10,000 + $3,000 + $20,000 = $33,000
Which is the logical order in which to construct the financial statements? - ANS Income
statement, statement of retained earnings, balance sheet
The income statement shows information for a point in time such as the end of the business
day on December 31, 2015 - ANS false
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,The balance sheet shows information for an entire year such as the year ending December 31,
2015 - ANS false
Sales less what equals Gross Margin or Gross Profit - ANS Cost or goods sold
Given the following account balances, prepare an income statement. Show Gross Margin,
Income Before Taxes and Net Income.
General and Administrative Expenses $20,000
Sales $120,000
Taxes $15,000
Marketing Expense $5,000
Cost of Goods Sold $50,000 - ANS Sales $120,000
COGS ($50,000)
Gross Margin 70,000
Operating Expenses
G&A exp. 20,000
marketing exp. 5,000
total O.E. (25,000)
income before taxes $45,000
tax expense (15,000)
net income 30,000
Assets will always equal liabilities plus owners' equity - ANS true
A company sells furniture to a customer for $10,000 in September. The customer is going to pay
for the furniture in October. In which month should the company record sales? -
ANS September
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, If beginning stockholders' equity = $50,000 and the following transactions occur during the
fiscal year, what is ending stockholders' equity
•Net income was $10,000
•Dividends declared were $1,000
•Accounts receivable collected were $4,000
•Common stock was issued for a total of $12,000
•A delivery truck was purchased for $25,000 cash - ANS Ending stockholders' Equity =
$71,000
( 50,000 + 10,000 - 1,000 + 12,000 )
Suppose:
Assets = $20,000,
Liabilities = $5,000, Stockholders' Equity = $15,000
What will those accounts balances equal after the following transaction:
A customer pays $5,000 to the company to satisfy an accounts receivable invoice -
ANS Assets = $20,000
Liabilities = $5,000
Stockholders' Equity = $15,000
The amount of net income for a company can be calculated by taking the difference between
the beginning and ending cash account for the fiscal year. - ANS false
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CORRECT ANSWERS.
The financial statement that reports assets, liabilities, and owners' equity is the -
ANS Balance sheet
If liabilities total $150,000 and owners' equity totals $50,000, the assets must total -
ANS $200,000 because assets = liabilities + owners equity
Compute net income: Sales revenue $10,000, Wage expense $4,000, Accounts payable $1,000
and Utilities expense $2,000 - ANS $10,000
-$4,000
-$2,000
= $4,000
Compute total assets: Cash $10,000, Accounts receivable $3,000, Accounts payable $4,000, and
Equipment $20,000 - ANS $10,000 + $3,000 + $20,000 = $33,000
Which is the logical order in which to construct the financial statements? - ANS Income
statement, statement of retained earnings, balance sheet
The income statement shows information for a point in time such as the end of the business
day on December 31, 2015 - ANS false
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
,The balance sheet shows information for an entire year such as the year ending December 31,
2015 - ANS false
Sales less what equals Gross Margin or Gross Profit - ANS Cost or goods sold
Given the following account balances, prepare an income statement. Show Gross Margin,
Income Before Taxes and Net Income.
General and Administrative Expenses $20,000
Sales $120,000
Taxes $15,000
Marketing Expense $5,000
Cost of Goods Sold $50,000 - ANS Sales $120,000
COGS ($50,000)
Gross Margin 70,000
Operating Expenses
G&A exp. 20,000
marketing exp. 5,000
total O.E. (25,000)
income before taxes $45,000
tax expense (15,000)
net income 30,000
Assets will always equal liabilities plus owners' equity - ANS true
A company sells furniture to a customer for $10,000 in September. The customer is going to pay
for the furniture in October. In which month should the company record sales? -
ANS September
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, If beginning stockholders' equity = $50,000 and the following transactions occur during the
fiscal year, what is ending stockholders' equity
•Net income was $10,000
•Dividends declared were $1,000
•Accounts receivable collected were $4,000
•Common stock was issued for a total of $12,000
•A delivery truck was purchased for $25,000 cash - ANS Ending stockholders' Equity =
$71,000
( 50,000 + 10,000 - 1,000 + 12,000 )
Suppose:
Assets = $20,000,
Liabilities = $5,000, Stockholders' Equity = $15,000
What will those accounts balances equal after the following transaction:
A customer pays $5,000 to the company to satisfy an accounts receivable invoice -
ANS Assets = $20,000
Liabilities = $5,000
Stockholders' Equity = $15,000
The amount of net income for a company can be calculated by taking the difference between
the beginning and ending cash account for the fiscal year. - ANS false
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