ACC 290 Final Exam

Question 1

The best definition of assets is the

 

collections of resources belonging to the company and the claims on these resources.

cash owned by the company.

owners’ investment in the business.

resources belonging to a company that have future benefit to the company.

 

           

Question 2

Which of the following is not a liability?

 

 

Accounts Payable

Accounts Receivable

Interest Payable

Unearned Service Revenue

 

Question 3

Which of the following financial statements is divided into major categories of operating, investing, and financing activities?

 

 

The statement of cash flows.

The income statement.

The balance sheet.

The retained earnings statement.

 

Question 4

Ending retained earnings for a period is equal to beginning

 

 

Retained earnings + Net income – Dividends.

Retained earnings – Net income + Dividends

 

Retained earnings – Net income – Dividends.

Retained earnings + Net income + Dividends.

 

 

Question 5      

Which of the following is not an advantage of the corporate form of business organization?

 

 

No personal liability

Easy to raise funds

Easy to transfer ownership

Favorable tax treatment

 

 

 

Question 6

An advantage of the corporate form of business is that

 

 

it is simple to establish.

it has limited life.

 its owner’s personal resources are at stake.

its ownership is easily transferable via the sale of shares of stock

 

 

Question 7

A small neighborhood barber shop that is operated by its owner would likely be organized as a

 

 

proprietorship.

partnership.

 joint venture.

corporation.

 

 

 

Question 8

 

If services are rendered for cash, then

 

stockholders’ equity will decrease.

liabilities will increase.

liabilities will decrease.

assets will increase.

 

Question 9

           

A revenue generally

 

 

increases assets and stockholders’ equity.

increases assets and liabilities.

increases assets and decreases stockholders’ equity.

leaves total assets unchanged.

 

Question 10

A revenue account

 

has a normal balance of a debit.

is decreased by credits.

is increased by credits.

is increased by debits.

 

Question 11

 

Which accounts normally have debit balances?

 

 

Assets, expenses, and dividends

Assets, expenses, and revenues

Assets, expense, and retained earnings

Assets, liabilities, and dividends

 

Question 12

In recording an accounting transaction in a double-entry system

 

 

the number of debit accounts must equal the number of credit accounts.

there must only be two accounts affected by any transaction.

there must always be entries made on both sides of the accounting equation.

the amount of the debits must equal the amount of the credits.

 

 

Question 13

 

           

The usual sequence of steps in the transaction recording process is

 

 

journalize, analyze, post to the ledger.

post to the ledger, journalize, analyze.

analyze, journalize, post to the ledger.

journalize, post to the ledger, analyze.

 

Question 14

 

 

Under the expense recognition principle expenses are recognized when

 

 

they contribute to the production of revenue.

they are billed by the supplier.

they are paid.

the invoice is received.

 

Question 15

           

The revenue recognition principle dictates that revenue should be recognized in the accounting records:

 

 

in the period that income taxes are paid.

when cash is received.

when the performance obligation is satisfied.

at the end of the month.

 

 

Question 16

 

Merchandising companies that sell to retailers are known as

 

 

brokers.

corporations.

wholesalers.

service firms.

 

Question 17

 

           

Gross profit equals the difference between

 

 

sales revenue and cost of goods sold.

sales revenue and operating expenses.

net income and operating expenses.

sales revenue and cost of goods sold plus operating expenses

 

Question 18

 

Net income will result if gross profit exceeds

 

 

purchases.

 cost of goods sold.

operating expenses.

cost of goods sold plus operating expenses.

 

Question 19

Under the perpetual system, cash freight costs incurred by the buyer for the transporting of goods is recorded in which account?

 

 

Freight-In

Inventory

Freight Expense

Freight-Out

 

Question 20

           

Financial information is presented below:

Operating expenses                 $ 25000

Sales revenue              175000

Cost of goods sold                  125000

 

The profit margin ratio would be

 

 

Question 21

 

           

Financial information is presented below:

Operating expenses     $ 31000

Sales returns and allowances  6000

Sales discounts            5000

Sales revenue  180000

Cost of goods sold      87000

 

The gross profit rate would be

 

 

Question 22

           

Financial information is presented below:

Operating expenses     $ 54000

Sales returns and allowances  5000

Sales discounts            5000

Sales revenue  206000

Cost of goods sold      109000

 

Gross Profit would be

 

 

 

$102000.

$92000.

$97000.

$87000

 

Question 23

The LIFO inventory method assumes that the cost of the latest units purchased are

 

 

not allocated to cost of goods sold or ending inventory.

the first to be allocated to cost of goods sold.

the last to be allocated to cost of goods sold.

the first to be allocated to ending inventory.

 

Question 24

 

Which of the following statements is correct with respect to inventories?

 

 

FIFO seldom coincides with the actual physical flow of inventory.

 The FIFO method assumes that the costs of the earliest goods acquired are the last to be sold.

It is generally good business management to sell the most recently acquired goods first.

Under FIFO, the ending inventory is based on the latest units purchased.

 

 

           

 

 

Question 25

           

All of the following are examples of internal control procedures except

 

 

reconciling the bank statement.

customer satisfaction surveys.

insistence that employees take vacations.

using prenumbered documents.

 

 

Question 26

Each of the following is a feature of internal control except

 

 

recording of all transactions.

bonding of employees.

an extensive marketing plan.

separation of duties.

 

 

Question 27    

For which of the following errors should the appropriate amount be subtracted from the balance per books on a bank reconciliation?

 

 

Check written for $95, but recorded by the company as $59

 

Deposit of $500 recorded by the bank as $50.

Check written for $53, but recorded by the company as $35.

A returned $200 check recorded by the bank as $20.

 

 

Question 28

A check written by the company for $126 is incorrectly recorded by a company as $162. On the bank reconciliation, the $36 error should be

 

 

deducted from the balance per books.

added to the balance per bank.

added to the balance per books.

deducted from the balance per bank.

 

 

Question 29

The following information was available for Blossom Company at December 31, 2017: beginning inventory $93000; ending inventory $146000; cost of goods sold $676000; and sales $824000. Blossom inventory turnover ratio (rounded) in 2017 was

 

7.3 times.

4.6 times.

6.9 times.

5.7 times.

 

 

Question 30

           

The following information was available for Sheridan Company at December 31, 2017: beginning inventory $80000; ending inventory $132000; cost of goods sold $644000; and sales $816000. Sheridan days in inventory (rounded) in 2017 was

 

47.4 days.

45.1 days.

59.8 days.

74.5 days.

Field of study: 
Date Due: 
Tuesday, October 23, 2018

Answer

ACC 290 Final Exam

ACC 290 Final Exam

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