CSUF ACCT 201A (HOFFMAN) FINAL
EXAM - QUESTIONS WITH ANSWERS
VERIFIED 100% CORRECT
The lower-of-cost-or-net realizable value rule for inventory is an example of the application of:
- ✔✔the conservatism convention.
All of the following are required steps in the accounting cycle except: - ✔✔prepare
financial statements from the unadjusted trial balance.
Which statement presents information as of a specific point in time? - ✔✔Balance sheet.
The following ratios are available for Reilly Inc. and O'Hare Inc.
Reily: Current Ratio 2:1 | Debt to Assets Ratio 75% | EPS $3.50
O'Hare: Curent Ratio 1.5:1 | Debt to Assets Ratio 40% | EPS $2.75
Compared to O'Hare Inc., Reilly Inc. has: - ✔✔higher liquidity and lower solvency,
but profitability cannot be compared based on information provided.
In a perpetual inventory system: - ✔✔FIFO cost of goods sold will be the same as in
a periodic inventory system.
What is the periodicity assumption? - ✔✔The economic life of a business can be divided
into artificial time periods.
, As of December 31, 2022, Rockford Corporation has assets of $3,500 and stockholders'
equity of $1,500. What are the liabilities for Rockford as of December 31, 2022? -
✔✔$2,000
(3,500-1,500)
In a classified balance sheet, assets are usually classified as: - ✔✔current assets; long-
term assets; property, plant, and equipment; and intangible assets.
Norton Company purchased 1,000 widgets and has 200 widgets in its ending inventory at a
cost of $91 each and a net realizable value of $80 each. The ending inventory under lower-of-
cost-or-net realizable value is: - ✔✔$16,000
(200*80)
Which of the following did not result from the Sarbanes-Oxley Act? - ✔✔Tax rates
on corporations increased.
Which of these would cause inventory turnover to increase the most? - ✔✔Decreasing
the amount of inventory on hand and increasing sales.
Current assets are listed: - ✔✔by order of expected conversion to cash.
The multiple-step income statement for a merchandising company shows each of
these features except: - ✔✔an investing activities section.
The financial statements for Macias Corporation contained the following information: Accounts
receivable $5,000, Sales Revenue $75,000, Cash $15,000, Sales and Wages Expense $20,000,
Rent expense $10,000. What was the company net income? - ✔✔$45,000
Net income = Sales revenue($75,000) - Salaries and wages expense ($20,000) - Rent
expense($10,000) = $45,000
EXAM - QUESTIONS WITH ANSWERS
VERIFIED 100% CORRECT
The lower-of-cost-or-net realizable value rule for inventory is an example of the application of:
- ✔✔the conservatism convention.
All of the following are required steps in the accounting cycle except: - ✔✔prepare
financial statements from the unadjusted trial balance.
Which statement presents information as of a specific point in time? - ✔✔Balance sheet.
The following ratios are available for Reilly Inc. and O'Hare Inc.
Reily: Current Ratio 2:1 | Debt to Assets Ratio 75% | EPS $3.50
O'Hare: Curent Ratio 1.5:1 | Debt to Assets Ratio 40% | EPS $2.75
Compared to O'Hare Inc., Reilly Inc. has: - ✔✔higher liquidity and lower solvency,
but profitability cannot be compared based on information provided.
In a perpetual inventory system: - ✔✔FIFO cost of goods sold will be the same as in
a periodic inventory system.
What is the periodicity assumption? - ✔✔The economic life of a business can be divided
into artificial time periods.
, As of December 31, 2022, Rockford Corporation has assets of $3,500 and stockholders'
equity of $1,500. What are the liabilities for Rockford as of December 31, 2022? -
✔✔$2,000
(3,500-1,500)
In a classified balance sheet, assets are usually classified as: - ✔✔current assets; long-
term assets; property, plant, and equipment; and intangible assets.
Norton Company purchased 1,000 widgets and has 200 widgets in its ending inventory at a
cost of $91 each and a net realizable value of $80 each. The ending inventory under lower-of-
cost-or-net realizable value is: - ✔✔$16,000
(200*80)
Which of the following did not result from the Sarbanes-Oxley Act? - ✔✔Tax rates
on corporations increased.
Which of these would cause inventory turnover to increase the most? - ✔✔Decreasing
the amount of inventory on hand and increasing sales.
Current assets are listed: - ✔✔by order of expected conversion to cash.
The multiple-step income statement for a merchandising company shows each of
these features except: - ✔✔an investing activities section.
The financial statements for Macias Corporation contained the following information: Accounts
receivable $5,000, Sales Revenue $75,000, Cash $15,000, Sales and Wages Expense $20,000,
Rent expense $10,000. What was the company net income? - ✔✔$45,000
Net income = Sales revenue($75,000) - Salaries and wages expense ($20,000) - Rent
expense($10,000) = $45,000
