ACC 231 ASU Wolfe Exam Questions
and Answers Top Rated Latest
version
Question 1
Paid maintenance costs of $31,000 on equipment for a new
manufacturing plant (totaling $6,000,000) during its first year
of use
-Capital expenditure
-Immediate expense
-Neither
Correct Answer
Immediate expense
Question 2
Cash and cash equivalents do NOT include:
-Petty cash
-Time deposits
-High-grade U.S. government securities maturing in 5 years
-Bank checking account
Correct Answer
High-grade U.S. government securities maturing in 5 years
Question 3
Taylor Company purchased a machine for $9,800 on January
1, 2019. The machine has been depreciated using the
straight-line method assuming it has a five-year life with a
$1,400 residual value. Taylor sold the machine on January 1,
Page 1 of 99
,2021, for $7,600. What is the book value of the machine on
December 31, 2020.
Correct Answer
$6,440
[(Purchase Price - Residual Value) / Lifespan = Annual
Depreciation] [(9,800 - 1,400) / 5 = 1,680]
[9,800 - 1,680 (from 2019) - 1,680 (from 2020) = 6,440]
Question 4
Matches the most current cost of goods sold against sales
revenue
-FIFO
-LIFO
-Specific-identification
-Average-cost
-All 4 methods
Correct Answer
LIFO
Question 5
Results in an old measure of the cost of ending inventory
-FIFO
-LIFO
-Specific-identification
-Average-cost
-All 4 methods
Correct Answer
LIFO
Page 2 of 99
,Question 6
Paid $148,000 to tear down old building on new plant site
-Capital expenditure
-Immediate expense
-Neither
Correct Answer
Capital expenditure
Question 7
Generally associated with saving income taxes
-FIFO
-LIFO
-Specific-identification
-Average-cost
-All 4 methods
Correct Answer
LIFO
Question 8
Accounts payable would be an example of a cash equivalent
(T or F)
Correct Answer
False
[is an asset but not a cash equivalent]
Question 9
Companies are required to estimate sales returns and
allowances in the current period in which the related sales
are made (T or F)
Page 3 of 99
, Correct Answer
True
Question 10
A company has $28,000 in cash and cash equivalents,
$88,000 in short-term investments, $122,000 in net current
receivables, $64,000 in inventory,
$14,000 of prepaid insurance and $11,000 of supplies. The
total current liabilities of the firm are $304,000. The quick
ratio of the company is:
Correct Answer
0.78
[28,000 + 88,000 + 122,000 = 238,000] [238,000/304,000]
[0.78]
Question 11
A company incurred the following costs for a new delivery
truck:
Purchase price $110,000 Sales tax $7,000
Delivery charge from seller's location $1,600 Special racks for
storage $3,000
Normal repairs to the truck before it was used for the first
time $1,100 Signs painted on the truck $2,000
Insurance on truck before it was used for the first time
$3,000
What is the cost of the delivery truck
Correct Answer
$127,700
[Sum of all costs]
Page 4 of 99
and Answers Top Rated Latest
version
Question 1
Paid maintenance costs of $31,000 on equipment for a new
manufacturing plant (totaling $6,000,000) during its first year
of use
-Capital expenditure
-Immediate expense
-Neither
Correct Answer
Immediate expense
Question 2
Cash and cash equivalents do NOT include:
-Petty cash
-Time deposits
-High-grade U.S. government securities maturing in 5 years
-Bank checking account
Correct Answer
High-grade U.S. government securities maturing in 5 years
Question 3
Taylor Company purchased a machine for $9,800 on January
1, 2019. The machine has been depreciated using the
straight-line method assuming it has a five-year life with a
$1,400 residual value. Taylor sold the machine on January 1,
Page 1 of 99
,2021, for $7,600. What is the book value of the machine on
December 31, 2020.
Correct Answer
$6,440
[(Purchase Price - Residual Value) / Lifespan = Annual
Depreciation] [(9,800 - 1,400) / 5 = 1,680]
[9,800 - 1,680 (from 2019) - 1,680 (from 2020) = 6,440]
Question 4
Matches the most current cost of goods sold against sales
revenue
-FIFO
-LIFO
-Specific-identification
-Average-cost
-All 4 methods
Correct Answer
LIFO
Question 5
Results in an old measure of the cost of ending inventory
-FIFO
-LIFO
-Specific-identification
-Average-cost
-All 4 methods
Correct Answer
LIFO
Page 2 of 99
,Question 6
Paid $148,000 to tear down old building on new plant site
-Capital expenditure
-Immediate expense
-Neither
Correct Answer
Capital expenditure
Question 7
Generally associated with saving income taxes
-FIFO
-LIFO
-Specific-identification
-Average-cost
-All 4 methods
Correct Answer
LIFO
Question 8
Accounts payable would be an example of a cash equivalent
(T or F)
Correct Answer
False
[is an asset but not a cash equivalent]
Question 9
Companies are required to estimate sales returns and
allowances in the current period in which the related sales
are made (T or F)
Page 3 of 99
, Correct Answer
True
Question 10
A company has $28,000 in cash and cash equivalents,
$88,000 in short-term investments, $122,000 in net current
receivables, $64,000 in inventory,
$14,000 of prepaid insurance and $11,000 of supplies. The
total current liabilities of the firm are $304,000. The quick
ratio of the company is:
Correct Answer
0.78
[28,000 + 88,000 + 122,000 = 238,000] [238,000/304,000]
[0.78]
Question 11
A company incurred the following costs for a new delivery
truck:
Purchase price $110,000 Sales tax $7,000
Delivery charge from seller's location $1,600 Special racks for
storage $3,000
Normal repairs to the truck before it was used for the first
time $1,100 Signs painted on the truck $2,000
Insurance on truck before it was used for the first time
$3,000
What is the cost of the delivery truck
Correct Answer
$127,700
[Sum of all costs]
Page 4 of 99
