ACCOUNTING CRASH COURSE EXAM
NEWEST
EXAM WITH COMPLETE QUESTIONS
AND
CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS)
The income statement is designed to measure:
D
A) The liquidity of a firm
O
B) How solvent a company has been
N
C) The income of a firm at a point in time
O
D) Cash inflows/outflows generated over a period of time
T
C
E) The profits of a firm over a period of time - ✔✔✔ Correct Answer > E) The profits of
a firm over a period of time
O
PY
Jones Company has provided the following information:
- Cash sales totaled $255,000
- Credit sales totaled $479,000
- Interest income was $7,700
- Interest expense was $19,900
- Cost of goods sold was $336,000
- Rent expense was $36,000
- Salaries expense was $49,000
,- Other operating expenses totaled $79,000
How much was Jones' operating income? - ✔✔✔ Correct Answer > $234,000
(Operating Income = Operating revenues - Operating expenses)
Which of the following statements is false?
A) Collecting cash after delivery of a good or service does not create revenue
on the income statement on the date of collection
B) Revenue is not recognized at the time of delivery of goods and services if
cash is received after delivery of the goods and services
C) A liability is created when cash is received prior to delivery of the goods or
D
services
O
D) Revenue is recognized at the time of delivery of the goods or services
N
regardless of if cash is received - ✔✔✔ Correct Answer > B) Revenue is not recognized
O
at the time of delivery of goods and services if cash is received after delivery of the
goods and services
T
C
O
Clayton Corp. has provided the following information
PY
- Gross profit was $620,000
- COGS was $380,000
- Net in come was $400,000
What was Clayton's gross profit margin? - ✔✔✔ Correct Answer > 62%
(Gross Profit = Sales - COGS, Gross Profit Percentage = Gross profit / Sales)
Clayton Corp. has provided the following information:
- Operating (excluding COGS) expenses were $345,000;
- Operating income was $215,000;
- Net sales were $1,100,000;
, - Interest expense was $71,000;
- Loss on sale of investments was $87,000;
- Income tax expense was $58,000.
What was Clayton's gross profit? - ✔✔✔ Correct Answer > $560,000
(Gross Profit = Net Sales - COGS)
A company reports $100 million total asset balance on December 31, 2019 and net
income of $10 million for the year ending December 31, 2019. Which of the
following transactions during 2020 would most directly result in a decrease in
D
return on assets (ROA)? Assume end of year balances for calculating ROA and
O
ignore the impact of taxes and evaluate each transaction independently.
N
A) On June 30, 2020 the company pays a vendor $5 million for recent
O
inventory purchases.
T
B) The company purchases a $5 million non-depreciable fixed asset on January
C
1, 2020, financed with a $5 million note at 10% annual interest. The asset produces
$0.5 million in incremental operating income during 2020.
O
PY
C) The company repays a $5 million loan obligation on January 1, 2020, that it
was paying 5% annual interest.
D) The company announces a 5% across-the-board decrease in the price of the
products it sells. - ✔✔✔ Correct Answer > B) The company purchases a $5 million
nondepreciable fixed asset on January 1, 2020, financed with a $5 million note at
10% annual interest. The asset produces $0.5 million in incremental operating
income during 2020.
The regulating body that oversees the development of accounting standards in
the U.S. is: A) SFAS
B) GAAP
NEWEST
EXAM WITH COMPLETE QUESTIONS
AND
CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS)
The income statement is designed to measure:
D
A) The liquidity of a firm
O
B) How solvent a company has been
N
C) The income of a firm at a point in time
O
D) Cash inflows/outflows generated over a period of time
T
C
E) The profits of a firm over a period of time - ✔✔✔ Correct Answer > E) The profits of
a firm over a period of time
O
PY
Jones Company has provided the following information:
- Cash sales totaled $255,000
- Credit sales totaled $479,000
- Interest income was $7,700
- Interest expense was $19,900
- Cost of goods sold was $336,000
- Rent expense was $36,000
- Salaries expense was $49,000
,- Other operating expenses totaled $79,000
How much was Jones' operating income? - ✔✔✔ Correct Answer > $234,000
(Operating Income = Operating revenues - Operating expenses)
Which of the following statements is false?
A) Collecting cash after delivery of a good or service does not create revenue
on the income statement on the date of collection
B) Revenue is not recognized at the time of delivery of goods and services if
cash is received after delivery of the goods and services
C) A liability is created when cash is received prior to delivery of the goods or
D
services
O
D) Revenue is recognized at the time of delivery of the goods or services
N
regardless of if cash is received - ✔✔✔ Correct Answer > B) Revenue is not recognized
O
at the time of delivery of goods and services if cash is received after delivery of the
goods and services
T
C
O
Clayton Corp. has provided the following information
PY
- Gross profit was $620,000
- COGS was $380,000
- Net in come was $400,000
What was Clayton's gross profit margin? - ✔✔✔ Correct Answer > 62%
(Gross Profit = Sales - COGS, Gross Profit Percentage = Gross profit / Sales)
Clayton Corp. has provided the following information:
- Operating (excluding COGS) expenses were $345,000;
- Operating income was $215,000;
- Net sales were $1,100,000;
, - Interest expense was $71,000;
- Loss on sale of investments was $87,000;
- Income tax expense was $58,000.
What was Clayton's gross profit? - ✔✔✔ Correct Answer > $560,000
(Gross Profit = Net Sales - COGS)
A company reports $100 million total asset balance on December 31, 2019 and net
income of $10 million for the year ending December 31, 2019. Which of the
following transactions during 2020 would most directly result in a decrease in
D
return on assets (ROA)? Assume end of year balances for calculating ROA and
O
ignore the impact of taxes and evaluate each transaction independently.
N
A) On June 30, 2020 the company pays a vendor $5 million for recent
O
inventory purchases.
T
B) The company purchases a $5 million non-depreciable fixed asset on January
C
1, 2020, financed with a $5 million note at 10% annual interest. The asset produces
$0.5 million in incremental operating income during 2020.
O
PY
C) The company repays a $5 million loan obligation on January 1, 2020, that it
was paying 5% annual interest.
D) The company announces a 5% across-the-board decrease in the price of the
products it sells. - ✔✔✔ Correct Answer > B) The company purchases a $5 million
nondepreciable fixed asset on January 1, 2020, financed with a $5 million note at
10% annual interest. The asset produces $0.5 million in incremental operating
income during 2020.
The regulating body that oversees the development of accounting standards in
the U.S. is: A) SFAS
B) GAAP
