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Exam (elaborations)
ACCT 2010 Final Exam Review UNT Questions and Correct Answers
The quality of earnings suggests that a. stockholders want the corporation to earn enough income to be able to pay its debts. b. continuing operations and one-time transactions are of equal importance. c. net income is the best measure of the results of operations. d. income from continuing operations is a more relevant predictor of future performance than income from one-time transactions. income from continuing operations is a more relevant predictor of future performance than income from one-...
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ACCT 2010 Exam 2 Review Questions and 100% Correct Answers
The journal entry to record the factoring of receivables would include a debit to cash, debit to financing expense, and credit to accounts receivable When computing the quick ratio, the numerator will include all of the following except for inventory A business offers credit terms of 2/15, n/30. These terms indicate that a discount of 2% can be taken if the bill is paid within 15 days of invoice A fidelity bond is an insurance policy that reimburses a company for any losses due to employee th...
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The purpose of adjusting entries is to (1) update amounts already recorded in the accounting records and (2) include events that occurred but had not yet been recorded
The purpose of adjusting entries is to (1) update amounts already recorded in the accounting records and (2) include events that occurred but had not yet been recorded. When a company pays its rent in advance its recorded as an asset is reported on the balance sheet As a company uses supplies, an adjustment should be made to decrease an asset account and increase an expense account The amount charged for a good or service provided to a customer on account is debited to Accounts Receivable and...
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ACCT 2010 Exam 3 Practice Questions and Solutions
Depreciation -Land is only plant asset on deprecated(unlimited useful life) -allocation of land asset's cost to expense over its life -Supports matching principle Measuring the cost of a Plant Asset Sum of all costs incurred to bring the asset to its intended use Cost of a plant asset: Equipment (6 parts) 1) Purchase price(after discounts) 2)Transportation 3) Insurance 4)Sales and other taxes 5)Purchase commission 6) Installation and testing Cost of a plant asset: Land (5 parts) 1)Purchase p...
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ACCT 2010 Exam 2 Test Questions and Verified Answers
Cash basis accounting accounting method that records revenue only when cash is received and expenses only when cash is paid Accrual basis accounting accounting method that records revenues when earned and expenses when incurred Time period concept assumes that a business's activities can be sliced into small time segments and that financial statements can be prepared for specific periods, such as a month, quarter, or year Fiscal year an accounting year of any twelve consecutive months that m...
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Accounting 2010 Practice Exam Questions and Complete Solutions
Accounting - Language used to communicate financial information about economic entities - The language used to tell a story - This must be done ethically and accurately because many people are interested in this information External Users - Competitors: There are limitations on the information that is given because a company doesn't want to give away all their secrets to competitors. - Creditors: Lendors (could be banks) - Tax authorities - Investors - Regulatory authorities Internal Users - ...
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Accounting 2010 Practice Questions and Correct Answers
If goods in transit are shipped FOB destination A. no one has legal title to the goods until they are delivered. B. the transportation company has legal title to the goods while the goods are in transit. C. the seller has legal title to the goods until they are delivered. D. the buyer has legal title to the goods until they are delivered. C Goods held on consignment are A included as part of no one's ending inventory. B never owned by the consignee. C included in the consignee's ending inve...
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Accounting 2010- Ch. 3 Review Questions and Correct Answers
Accounting can either be based on what 2 types of accounting? 1. Accrual Accounting 2. Cash-Basis Accounting Accrual Accounting -Records what (2)? -Required by what? Accounting that records the impact of a business event as it occurs, regardless or whether the transaction affected cash. -Making the sale (not collecting the cash) increases your wealth Required by Generally Accepted Accounting Principles (GAAP) Records: ► Revenue when earned ► Expenses when incurred (not necessarily when cash...
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ACCT 2010 UNT EXAM 3 CHPT. 7, 8,9 Questions and Correct Answers
Smatter Corporation purchased land for a new building. Which of the following costs would not be included in the cost of the land? Cost of new parking lot constructed on the land Chanit Company purchased a building and land for $540,000 in total. Individually, the land appraised for $228,000 and the building appraised for $342,000. How much of the purchase price should be allocated to the cost of the land? $216,000 Suppose you buy land for $2,800,000 and spend $1,100,000 to develop the propert...
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ACCT 2010 Chapter 5 Questions and Correct Answers
Company held investments in trading securities with a fair value of $70,000 at December. These investments cost $60,000 in January. What is the amount to report on the balance sheet in December? $70,000 Trading securities with a fair value of $55,000 at December. These investments cost $45,000 on January. What should appear on the income statement for the year ended December? $10,000 unrealized gain A/R has a debit balance of $2,400 and the allowance of uncollectible accounts has a credit bala...
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Accounting 2010 Final Exam Multiple Choice Questions and Correct Answers
Each of the following is one of the four basic financial statements except what? a. income statement b. statement of cash flows c. statement of stockholders' equity d. balance sheet e. bank statement e. bank statement All of the following items are classified on the income statement as a revenue expect what? a. sales revenue b. interest income c. service revenue d. deferred revenue d. deferred revenue Which of the following is an adjusting entry? a. recording depreciation expense b. debit une...
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UNT ACCT 2010 Final Review Questions and Complete Solutions
If you purchase a building for $530,000, under the historical cost principal, you should record the building for: $530,000 Which of the following is a true statement about International Financial Reporting Standards They are converging gradually with U.S. standards What does GAAP mean? Generally Accepted Accounting Principles Who created Financial accounting standards? FASB The accounting equation can be expressed as Assets - Liabilities = Owners' equity The nature of an asset is best desc...
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ACCT 2010 - Chapter 1 Test Questions and Correct Answers
State the 3 types of accounting Financial Accounting - information for external decision makers Managerial Accounting - information for internal decision makers Tax Accounting - information for the tax authorities Accounting matters why? If a company's revenue beats their projected, it will raise the stock price (even if the revenue is lower than other firms) - amazon and Facebook example Why stock prices drop? Stock prices drop due to market reactions (usually within 30 minutes). Investors u...
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ACCT 2010 - Chapter 9 Test Questions and Correct Answers
What are the two ways businesses finance the acquisition of their assets? 1. Funds supplied by creditors (debt - liability) 2. Funds provided by owners (equity) What is the term given to a mixture of debt and equity a business uses? Capital structure Two key factors managers consider when borrowing money 1. Risk 2. Cost Liabilities Debts or obligations that result from past transactions, which will be paid from with assets or services Current liabilities Short-term debts and obligations tha...
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Chapter 4 ACCT 2010 Questions and Correct Answers
Under the accrual basis of accounting events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. Under accrual- adjusting is made when? at the end of the accounting period Under accrual- adjusting is made to... - update the amounts already recorded in the accounting records - include events that had occurred but had not yet been recorded - ensuring that revenues and expenses are occurring in the corr...
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ACCT 2010 Exam 4 Questions and Complete Solutions
Pros and Cons of Extending Credit Advantage: 1. Increases the seller's revenues Disadvantages: 1. increase wage cost 2. bad debt cost 3. delayed receipt of cash Journal entry at time of sale (record sales on account) debit accounts receivables and credit sales revenues Journal entry to record estimate of bad debts debit bad debt expense and credit allowance for doubtful accounts Journal entry for when bad debt is known debit allowance for doubtful accounts and credit accounts receivable Ac...
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Accounting 2010 Exam 1 Quiz Questions and Correct Answers
This type of accounting is mainly concerned with external reporting and reports are prepared using generally accepted accounting principles (GAAP). A)Tax accounting B)Financial accounting C)Managerial accounting D)Both financial accounting and managerial accounting B)Financial accounting Which of the following accounts are assets? A)Cash, Land, and Accounts Receivable B)Cash, Accounts Payable, and Land C)Dividends to Shareholders, Equipment, and Salaries D)Equipment, Notes Payable, and Capital ...
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ACCT 2010 Ch 4 Study Questions and Correct Answers
Fraud An intentional misrepresentation of facts, made for the purpose of persuading another party to act in a way that causes injury or damage to that party. Types of fraud Misappropriation of assets Fraudulent financial reporting Misappropriation of assets Committed by employees of an entity who steal money from the company and cover it up. * Cash * Inventory * False expense reports Fraudulent financial reporting Committed by company managers who make false and misleading entries in the book...
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ACCT 2010 Final Exam Review Questions and Verified Answers
Comprehensive income is: not used to determine net income or earnings per share. Sales revenue less cost of goods sold is called: gross profit. The basic form of capital stock is: a share of common stock. On January 1, 2017, the Bonds Payable account has a balance of $690,000. On December 31, 2017, the Bonds Payable account has a balance of $810,000. During 2017, one bonds of $10,000 was retired. No discounts or premiums were amortized in 2017. What amount of new bonds were issued in 2017? $1...
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ETSU ACCT 2010 FINAL EXAM REVIEW QUESTIONS AND CORRECT ANSWERS
Purpose of Financial Reporting summarize transactions, give them to external/internal users, make decisions based on summaries Primary users of financial statements internal: executives, mid-level management External: investors, lenders, outside users Rules that govern accounting GAAP SEC Securities and Exchange Commission- enforcement of GAAP- oversees finances FASB Financial Accounting Standards Board- created GAAP Economic Entity Assumption shareholders keep their personal records separa...
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