ACCOUNTING 201 FINAL EXAM ACTUAL QUESTIONS AND
ANSWERS GRADED A+
✔✔trading - ✔✔reported at Market Value after adjustment of unrealized gain or loss
✔✔help to maturity - ✔✔reported at cost
✔✔available for sale - ✔✔reported at Market Value after adjustment of unrealized gain
or loss
✔✔investments - ✔✔trading
held to maturity
available for sale
✔✔maturity date - ✔✔date principal is due back
✔✔bond discount - ✔✔cash received is less than principal
market rate is more than contract
✔✔bond premium - ✔✔cash received is more than principal
market rate is less than contract
✔✔effective rate of interest - ✔✔effective interest amortization
✔✔debenture - ✔✔bonds backs by good faith of issuer/borrower
✔✔present value - ✔✔the value of future dollars in terms of today's dollar
✔✔par value - ✔✔book value of stock
✔✔preferred vs. common stock - ✔✔preferred are paid first
✔✔earnings per share - ✔✔(net income-preferred dividends)/weighted avg stock
outstanding
✔✔treasury stock - ✔✔stock repurchased by company
✔✔stock dividends - ✔✔no effect on stockholder's equity
✔✔assets - ✔✔current/long term
cash
accounts receivable
contra asset-allowance for doubtful accounts
inventory
, plant assets/equipment
contra asset-accumulated depreciation
investments
✔✔asset: accounts receivable - ✔✔amounts due from customers for credit sales;
backed by the customers general credit standing
✔✔allowance for doubtful accounts - ✔✔contra asset account with a balance
approximating uncollectible accounts receivable
✔✔inventory - ✔✔goods a company owns and expects to sell in its normal operations
✔✔plant assets - ✔✔tangible long-lived assets used to produce or sell products and
services; also called property, plant, and equipment
✔✔accumulated depreciation - ✔✔cumulative sum of all depreciation expense recorded
from an asset
✔✔liabilities - ✔✔current/long term
short term
long term note payable
bond payable
contra liability-discount/premium on bonds payable
unearned revenue
✔✔note payable - ✔✔liability expressed by a written promise to pay a definite sum of
money on demand or on a specific future date
✔✔unearned revenue - ✔✔liability created when customers pay in advance for products
or services; earned when the products or services are later delivered
✔✔equity - ✔✔retained earning
capital stock-preferred/common
✔✔income statement: revenue - ✔✔sales
contra revenue accounts
sales
return and allowances
sales discounts
✔✔sales - ✔✔gross increase in equity from a company's business activities that earn
income (also known as revenue)
✔✔contra account - ✔✔account linked with another account and having an opposite
normal balance; reported as a subtraction from the other account's balance
ANSWERS GRADED A+
✔✔trading - ✔✔reported at Market Value after adjustment of unrealized gain or loss
✔✔help to maturity - ✔✔reported at cost
✔✔available for sale - ✔✔reported at Market Value after adjustment of unrealized gain
or loss
✔✔investments - ✔✔trading
held to maturity
available for sale
✔✔maturity date - ✔✔date principal is due back
✔✔bond discount - ✔✔cash received is less than principal
market rate is more than contract
✔✔bond premium - ✔✔cash received is more than principal
market rate is less than contract
✔✔effective rate of interest - ✔✔effective interest amortization
✔✔debenture - ✔✔bonds backs by good faith of issuer/borrower
✔✔present value - ✔✔the value of future dollars in terms of today's dollar
✔✔par value - ✔✔book value of stock
✔✔preferred vs. common stock - ✔✔preferred are paid first
✔✔earnings per share - ✔✔(net income-preferred dividends)/weighted avg stock
outstanding
✔✔treasury stock - ✔✔stock repurchased by company
✔✔stock dividends - ✔✔no effect on stockholder's equity
✔✔assets - ✔✔current/long term
cash
accounts receivable
contra asset-allowance for doubtful accounts
inventory
, plant assets/equipment
contra asset-accumulated depreciation
investments
✔✔asset: accounts receivable - ✔✔amounts due from customers for credit sales;
backed by the customers general credit standing
✔✔allowance for doubtful accounts - ✔✔contra asset account with a balance
approximating uncollectible accounts receivable
✔✔inventory - ✔✔goods a company owns and expects to sell in its normal operations
✔✔plant assets - ✔✔tangible long-lived assets used to produce or sell products and
services; also called property, plant, and equipment
✔✔accumulated depreciation - ✔✔cumulative sum of all depreciation expense recorded
from an asset
✔✔liabilities - ✔✔current/long term
short term
long term note payable
bond payable
contra liability-discount/premium on bonds payable
unearned revenue
✔✔note payable - ✔✔liability expressed by a written promise to pay a definite sum of
money on demand or on a specific future date
✔✔unearned revenue - ✔✔liability created when customers pay in advance for products
or services; earned when the products or services are later delivered
✔✔equity - ✔✔retained earning
capital stock-preferred/common
✔✔income statement: revenue - ✔✔sales
contra revenue accounts
sales
return and allowances
sales discounts
✔✔sales - ✔✔gross increase in equity from a company's business activities that earn
income (also known as revenue)
✔✔contra account - ✔✔account linked with another account and having an opposite
normal balance; reported as a subtraction from the other account's balance
