Page 1 of 120
A100 Final Exam ACTUAL EXAM ALL 300
QUESTIONS AND CORRECT ANSWERS LATEST
UPDATE THIS YEAR
QUESTION: Which of the following is primarily responsible for the information provided in the
financial statements?
a) Board of Directors
b) Internal Accounting Staff
c) External Auditors
d) Company Top Management - ANSWER-d) Company Top Management
QUESTION: Which of the following statements is true?
a) IFRS is the committee that produces the rules that companies based in most countries other
than the US are required to use.
b) The rules of GAAP and IFRS are exactly the same.
c) The FASB is responsible for producing GAAP.
d) GAAP applies only to cash-basis accounting, and the IFRS applies only to accrual-basis
accounting.
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e) Companies based in the US have their choice of using GAAP or IFRS. - ANSWER-c) The FASB is
responsible for producing GAAP.
QUESTION: Which of the following describes the primary objective of financial accounting?
a) To provide information about a business' future business strategies.
b) To provide useful financial information only to stockholders.
c) To provide useful financial information about a business to help internal parties make
informed decisions.
d) To provide useful financial information about a business to help external parties make
informed decisions. - ANSWER-d) To provide useful financial information about a business to
help external parties make informed decisions.
QUESTION: Financial accounting standards are known collectively as GAAP. What does that
acronym stand for and what do they do? - ANSWER-Generally Accepted Accounting Principles
Make rules so that outside readers of financial statements can trust that statements from diff
companies are available
QUESTION: For accounting information to be useful, it must be which of the following?
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a) It must be relevant and consistent.
b) It must be consistent and comparable.
c) It must be comparable and reliable.
d) It must be a faithful representation and relevant. - ANSWER-d) It must be a faithful
representation and relevant.
QUESTION: Which of the following best describes the purpose of an audit?
a) To lend credibility to an entity's financial statements.
b) To audit every transaction that an entity entered into.
c) To prove the accuracy of an entity's financial statements.
d) To establish that a corporation's stock is a sound investment. - ANSWER-a) To lend credibility
to an entity's financial statements.
QUESTION: Which of the following is a liability account?
a) Retained earnings
b) Equipment
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c) Utilities payable
d) Common stock - ANSWER-c) Utilities payable
QUESTION: Retained earnings is
a) net income plus or minus accruals.
b) the cash available to pay dividends.
c) an asset account on the balance sheet.
d) the cash that management has withheld to reinvest in the business.
e) the part of stockholders' equity that has been earned but not yet distributed as dividends. -
ANSWER-e) the part of stockholders' equity that has been earned but not yet distributed as
dividends.
Q; Which of the following statements is true regarding stockholders?
a) They are creditors of the company.
b) They are owners of the company.
c) They expect to receive interest on their investment.
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A100 Final Exam ACTUAL EXAM ALL 300
QUESTIONS AND CORRECT ANSWERS LATEST
UPDATE THIS YEAR
QUESTION: Which of the following is primarily responsible for the information provided in the
financial statements?
a) Board of Directors
b) Internal Accounting Staff
c) External Auditors
d) Company Top Management - ANSWER-d) Company Top Management
QUESTION: Which of the following statements is true?
a) IFRS is the committee that produces the rules that companies based in most countries other
than the US are required to use.
b) The rules of GAAP and IFRS are exactly the same.
c) The FASB is responsible for producing GAAP.
d) GAAP applies only to cash-basis accounting, and the IFRS applies only to accrual-basis
accounting.
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, Page 2 of 120
e) Companies based in the US have their choice of using GAAP or IFRS. - ANSWER-c) The FASB is
responsible for producing GAAP.
QUESTION: Which of the following describes the primary objective of financial accounting?
a) To provide information about a business' future business strategies.
b) To provide useful financial information only to stockholders.
c) To provide useful financial information about a business to help internal parties make
informed decisions.
d) To provide useful financial information about a business to help external parties make
informed decisions. - ANSWER-d) To provide useful financial information about a business to
help external parties make informed decisions.
QUESTION: Financial accounting standards are known collectively as GAAP. What does that
acronym stand for and what do they do? - ANSWER-Generally Accepted Accounting Principles
Make rules so that outside readers of financial statements can trust that statements from diff
companies are available
QUESTION: For accounting information to be useful, it must be which of the following?
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a) It must be relevant and consistent.
b) It must be consistent and comparable.
c) It must be comparable and reliable.
d) It must be a faithful representation and relevant. - ANSWER-d) It must be a faithful
representation and relevant.
QUESTION: Which of the following best describes the purpose of an audit?
a) To lend credibility to an entity's financial statements.
b) To audit every transaction that an entity entered into.
c) To prove the accuracy of an entity's financial statements.
d) To establish that a corporation's stock is a sound investment. - ANSWER-a) To lend credibility
to an entity's financial statements.
QUESTION: Which of the following is a liability account?
a) Retained earnings
b) Equipment
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c) Utilities payable
d) Common stock - ANSWER-c) Utilities payable
QUESTION: Retained earnings is
a) net income plus or minus accruals.
b) the cash available to pay dividends.
c) an asset account on the balance sheet.
d) the cash that management has withheld to reinvest in the business.
e) the part of stockholders' equity that has been earned but not yet distributed as dividends. -
ANSWER-e) the part of stockholders' equity that has been earned but not yet distributed as
dividends.
Q; Which of the following statements is true regarding stockholders?
a) They are creditors of the company.
b) They are owners of the company.
c) They expect to receive interest on their investment.
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