ACC 221 FINAL EXAM PRACTICE PAPER 2026
COMPLETE SOLUTIONS
◉ Claims to stuff of someone who is not an owner of the
organization. Answer: Liabilities
◉ Claims to the staff of owners of the organization. Answer: Owners'
Equity
◉ The Accounting Equation. Answer: Assets = Liabilities + Owners'
Equity
◉ Increase / Decrease Rules for All Assets Accounts. Answer: If the
amount is placed on the Debit side of the account the balance in the
account is increased. If the amount is placed on the Credit side of the
account, the balance in the account is decreased.
◉ Increase/Decrease Rules for All Liability and All Owners' Equity
Accounts. Answer: If the amount is placed on the Credit side of the
account, the balance in the account is increased. If the amount is
placed on the Debit side of the account, the balance in the account is
decreased.
◉ General Journal. Answer: Where we record entries
, ◉ Journal Entries. Answer: Consists of debits and credits (all debits
= amount of all credits)
◉ Accrual basis. Answer: Transaction is recorded when it takes
place, not necessarily when cash is received or paid.
◉ Accounts Receivable. Answer: Promise from a customer to pay
shortly.
◉ Interest payable. Answer: Non owners claim to assets (bank)
◉ Retained earnings. Answer: Owners claim to assets (events
related to business)
◉ Common Stock. Answer: Increases when owners invest.
◉ Adjusting entry. Answer: There is no event; make an entry due to
the passage of time.
◉ Cost of goods sold. Answer: The cost the company paid previously
for the inventory sold.
COMPLETE SOLUTIONS
◉ Claims to stuff of someone who is not an owner of the
organization. Answer: Liabilities
◉ Claims to the staff of owners of the organization. Answer: Owners'
Equity
◉ The Accounting Equation. Answer: Assets = Liabilities + Owners'
Equity
◉ Increase / Decrease Rules for All Assets Accounts. Answer: If the
amount is placed on the Debit side of the account the balance in the
account is increased. If the amount is placed on the Credit side of the
account, the balance in the account is decreased.
◉ Increase/Decrease Rules for All Liability and All Owners' Equity
Accounts. Answer: If the amount is placed on the Credit side of the
account, the balance in the account is increased. If the amount is
placed on the Debit side of the account, the balance in the account is
decreased.
◉ General Journal. Answer: Where we record entries
, ◉ Journal Entries. Answer: Consists of debits and credits (all debits
= amount of all credits)
◉ Accrual basis. Answer: Transaction is recorded when it takes
place, not necessarily when cash is received or paid.
◉ Accounts Receivable. Answer: Promise from a customer to pay
shortly.
◉ Interest payable. Answer: Non owners claim to assets (bank)
◉ Retained earnings. Answer: Owners claim to assets (events
related to business)
◉ Common Stock. Answer: Increases when owners invest.
◉ Adjusting entry. Answer: There is no event; make an entry due to
the passage of time.
◉ Cost of goods sold. Answer: The cost the company paid previously
for the inventory sold.
