ACCT 2000 FINAL EXAM EOC PRACTICE
LOWE-ARDOIN QUESTIONS WITH
CORRECT ANSWERS 2025
What is the basic accounting equation? - CORRECT ANSWER -Assets = Liabilities + Stockholders' Equity
Which is an advantage of corporations relative to partnerships and sole proprietorships? -
CORRECT ANSWER -Reduced legal liability for investors
Which forms of business organization are considered to be separate accounting entities? -
CORRECT ANSWER -Sole Proprietorship, Corporations, and Partnerships.
Which of the following did NOT result from the Sarbanes-Oxley Act? - CORRECT ANSWER -
Tax rates on corporations increased.
The payment of dividends is an example of a(n) - CORRECT ANSWER -financing activity
What kind of classification is cost of goods sold? - CORRECT ANSWER -expense
What section of cash flow statement shows the cash spent on new equipment during the past account
ing period? - CORRECT ANSWER -The investing section
If total liabilities decreased by $15,000 and stockholders' equity increased by $5,000 during a period o
f time, then total assets must change by what amount and direction during that same period? -
CORRECT ANSWER -$10,000 decrease
(Assets = Liabilities + Stockholders' Equity)
Which is NOT one of the three forms of business organizations? - CORRECT ANSWER -Creditorship
Ease of transferring ownership is a characteristic of which form of business organization? -
CORRECT ANSWER -Corporation
,In which forms of business organization are the owners personally liable for all the debts of the busine
ss? - CORRECT ANSWER -Sole proprietorships and Partnerships
The sole proprietorship form of business organization? - CORRECT ANSWER -
Generally, receives favorable tax treatment relative to a corporation
To which of the following questions will internal users want answers? - CORRECT ANSWER -
All of the answer choices are correct.
- what selling price for our product will maximize the company's net income?
- which product line is most profitable?
- is cash sufficient to pay dividend to stockholders?
Which of the following is NOT an external user of accounting data? - CORRECT ANSWER -
Chief Financial Officer
Which statement about users of accounting information is INCORRECT? - CORRECT ANSWER -
Regulatory authorities are considered internal users.
Which of the following is the most appropriate definition of accounting? - CORRECT ANSWER -
The information system that identifies, records, and communicates the economic events of an organiza
tion to interested users.
Paying interest expense and receiving interest revenue are examples of - CORRECT ANSWER -
Operating activates
Which of the following is NOT one of the three primary business activities? - CORRECT ANSWER -
Advertising
Which of the following is an example of a financing activity? - CORRECT ANSWER -
Issuing shares of common stock
, Resources owned by a business are referred to as - CORRECT ANSWER -assets
In terms of the principal types of business activities, paying salaries expense is an example of an -
CORRECT ANSWER -operating activity
On Jan. 10, Novis Company purchased manufacturing equipment for $80,000 cash. What kind of activi
ty is this? - CORRECT ANSWER -Investing activity
In what section of the statement of cash flows would the purchase of office equipment for $10,000 ca
sh appear? - CORRECT ANSWER -Investing activities
Which of the following is NOT one of the primary types of the financing activities in the statement of
cash flows? - CORRECT ANSWER -Buying equipment
Which of the following would NOT appear on the income statement? - CORRECT ANSWER -
Dividends paid
Which of the following would NOT appear on the retained earnings statement? - CORRECT ANSWER -
service revenue
Net income will result during a time period when - CORRECT ANSWER -revenues exceed expenses
The financial statements for Harold Corporation contained the following information:
Accounts receivable: $5,000
Sales Revenue: $75,000
Cash: $15,000
Salaries and wages expense: $20,000
Rent expense: $10,000
How much was Harold's net income? - CORRECT ANSWER -$45,000
LOWE-ARDOIN QUESTIONS WITH
CORRECT ANSWERS 2025
What is the basic accounting equation? - CORRECT ANSWER -Assets = Liabilities + Stockholders' Equity
Which is an advantage of corporations relative to partnerships and sole proprietorships? -
CORRECT ANSWER -Reduced legal liability for investors
Which forms of business organization are considered to be separate accounting entities? -
CORRECT ANSWER -Sole Proprietorship, Corporations, and Partnerships.
Which of the following did NOT result from the Sarbanes-Oxley Act? - CORRECT ANSWER -
Tax rates on corporations increased.
The payment of dividends is an example of a(n) - CORRECT ANSWER -financing activity
What kind of classification is cost of goods sold? - CORRECT ANSWER -expense
What section of cash flow statement shows the cash spent on new equipment during the past account
ing period? - CORRECT ANSWER -The investing section
If total liabilities decreased by $15,000 and stockholders' equity increased by $5,000 during a period o
f time, then total assets must change by what amount and direction during that same period? -
CORRECT ANSWER -$10,000 decrease
(Assets = Liabilities + Stockholders' Equity)
Which is NOT one of the three forms of business organizations? - CORRECT ANSWER -Creditorship
Ease of transferring ownership is a characteristic of which form of business organization? -
CORRECT ANSWER -Corporation
,In which forms of business organization are the owners personally liable for all the debts of the busine
ss? - CORRECT ANSWER -Sole proprietorships and Partnerships
The sole proprietorship form of business organization? - CORRECT ANSWER -
Generally, receives favorable tax treatment relative to a corporation
To which of the following questions will internal users want answers? - CORRECT ANSWER -
All of the answer choices are correct.
- what selling price for our product will maximize the company's net income?
- which product line is most profitable?
- is cash sufficient to pay dividend to stockholders?
Which of the following is NOT an external user of accounting data? - CORRECT ANSWER -
Chief Financial Officer
Which statement about users of accounting information is INCORRECT? - CORRECT ANSWER -
Regulatory authorities are considered internal users.
Which of the following is the most appropriate definition of accounting? - CORRECT ANSWER -
The information system that identifies, records, and communicates the economic events of an organiza
tion to interested users.
Paying interest expense and receiving interest revenue are examples of - CORRECT ANSWER -
Operating activates
Which of the following is NOT one of the three primary business activities? - CORRECT ANSWER -
Advertising
Which of the following is an example of a financing activity? - CORRECT ANSWER -
Issuing shares of common stock
, Resources owned by a business are referred to as - CORRECT ANSWER -assets
In terms of the principal types of business activities, paying salaries expense is an example of an -
CORRECT ANSWER -operating activity
On Jan. 10, Novis Company purchased manufacturing equipment for $80,000 cash. What kind of activi
ty is this? - CORRECT ANSWER -Investing activity
In what section of the statement of cash flows would the purchase of office equipment for $10,000 ca
sh appear? - CORRECT ANSWER -Investing activities
Which of the following is NOT one of the primary types of the financing activities in the statement of
cash flows? - CORRECT ANSWER -Buying equipment
Which of the following would NOT appear on the income statement? - CORRECT ANSWER -
Dividends paid
Which of the following would NOT appear on the retained earnings statement? - CORRECT ANSWER -
service revenue
Net income will result during a time period when - CORRECT ANSWER -revenues exceed expenses
The financial statements for Harold Corporation contained the following information:
Accounts receivable: $5,000
Sales Revenue: $75,000
Cash: $15,000
Salaries and wages expense: $20,000
Rent expense: $10,000
How much was Harold's net income? - CORRECT ANSWER -$45,000
