ACC 290 FINAL EXAM FEB
2017 VERSION
ACC 290 FINAL EXAM
FEB 2017 VERSION
The best definition of assets
is the
cash owned
by the company.
owners’
investment in the business.
resources
belonging to a company that have future benefit to the company.
collections
of resources belonging to the company and the claims on these resources.
Multiple Choice Question 98
Which of the following is not a
liability?
Entry field
with correct answer
Unearned
Service Revenue
Interest
Payable
Accounts
Receivable
Accounts
Payable
Multiple Choice Question 99
Which of the following
financial statements is divided into major categories of operating, investing,
and financing activities?
Entry field
with correct answer
The balance
sheet.
The
retained earnings statement.
The
statement of cash flows.
The income
statement
Multiple Choice Question 101
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.
Multiple Choice Question 47
Which of the following is not
an advantage of the corporate form of business organization?
Entry field
with correct answer
Easy to
raise funds
Favorable
tax treatment
No personal
liability
Easy to
transfer ownership
Multiple Choice Question 48
An advantage of the corporate
form of business is that
it has
limited life.
it is
simple to establish.
its
ownership is easily transferable via the sale of shares of stock.
its owner’s
personal resources are at stake.
Multiple Choice Question 51
A small neighborhood barber
shop that is operated by its owner would likely be organized as a:
joint
venture.
proprietorship.
corporation.
partnership.
Multiple Choice Question 59
If services are rendered for
cash, then
liabilities
will increase.
stockholders’
equity will decrease.
liabilities
will decrease.
assets will
increase.
Multiple Choice Question 67
A revenue
generally
increases
assets and stockholders’ equity.
increases
assets and decreases stockholders’ equity.
leaves
total assets unchanged.
increases
assets and liabilities.
Multiple Choice Question 103
A revenue
account
is
decreased by credits.
is
increased by credits.
is
increased by debits.
has a
normal balance of a debit.
Multiple Choice Question 106
Which accounts normally have
debit balances?
Assets,
expense, and retained earnings
Assets,
expenses, and dividends
Assets,
liabilities, and dividends
Assets,
expenses, and revenues
Multiple Choice Question 109
In recording an accounting
transaction in a double-entry
system
there must
only be two accounts affected by any transaction.
the number
of debit accounts must equal the number of credit accounts.
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.
Multiple Choice Question 157
The usual sequence of steps in
the transaction recording process is
journalize,
post to the ledger, analyze.
post to the
ledger, journalize, analyze.
journalize,
analyze, post to the ledger.
analyze,
journalize, post to the ledger.
Multiple Choice Question 59
Under the expense recognition
principle expenses are recognized
when
the invoice
is received.
they
contribute to the production of revenue.
they are
paid.
they are
billed by the supplier.
Multiple Choice Question 61
The revenue recognition
principle dictates that revenue should be recognized in the accounting
records:
when the
performance obligation is satisfied.
in the
period that income taxes are paid.
at the end
of the month.
when cash
is received.
Multiple Choice Question 53
Merchandising companies that
sell to retailers are known as
service
firms.
wholesalers.
brokers.
corporations.
Multiple Choice Question 57
Gross profit equals the
difference between
sales
revenue and cost of goods sold plus operating expenses.
net income
and operating expenses.
sales
revenue and cost of goods sold.
sales
revenue and operating expenses.
Multiple Choice Question 59
Net income will result if gross
profit exceeds
operating
expenses.
cost of
goods sold plus operating expenses.
purchases.
cost of
goods sold.
Multiple Choice Question 105
Under the perpetual system,
cash freight costs incurred by the buyer for the transporting of goods is
recorded in which account?
Freight
Expense
Freight-In
Inventory
Freight-Out
Multiple Choice Question 162
Financial information is
presented below:
Operating
expenses
$ 29000
Sales
revenue
244000
Cost of
goods sold
141000
The profit
margin ratio would be
0.70.
0.30.
0.42.
0.58.
Multiple Choice Question 164
Financial information is
presented below:
Operating
expenses $ 28000
Sales returns
and allowances 6000
Sales
discounts 5000
Sales
revenue 160000
Cost of
goods sold 107000
The gross
profit rate would be
0.26.
0.32.
0.28.
0.71.
Multiple Choice Question 167
Financial information is
presented below:
Operating expenses
$ 63000
Sales
returns and allowances 2000
Sales
discounts 9000
Sales
revenue 194000
Cost of
goods sold 94000
Gross
Profit would be
Entry field
with correct answer
$89000.
$98000.
$100000.
$102000.
Multiple Choice Question 65
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.
Multiple Choice Question 99
Which of the following
statements is correct with respect to inventories?
Under FIFO,
the ending inventory is based on the latest units purchased.
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.
FIFO seldom
coincides with the actual physical flow of inventory.
Multiple Choice Question 44
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.
Multiple Choice Question 45
Each of the following is a feature
of internal control except
an
extensive marketing plan.
recording
of all transactions.
bonding of
employees.
separation
of duties.
Multiple Choice Question 123
For which of the following
errors should the appropriate amount be subtracted from the balance per books
on a bank reconciliation?
A returned
$900 check recorded by the bank as $90.
Check
written for $95, but recorded by the company as $59.
Deposit of
$400 recorded by the bank as $40.
Check
written for $93, but recorded by the company as $39.
Multiple Choice Question 119
A check written by the company
for $149 is incorrectly recorded by a company as $194. On the bank
reconciliation, the $45 error should be
deducted
from the balance per books.
deducted
from the balance per bank.
added to the
balance per bank.
added to
the balance per books.
Multiple Choice Question 162
The following information was
available for Sunland Company at December 31, 2017: beginning inventory $86000;
ending inventory $146000; cost of goods sold $644000; and sales $976000.
Sunland inventory turnover ratio (rounded) in 2017 was
7.5 times.
8.4 times.
5.6 times.
4.4 times.
Multiple
Choice Question 163
The
following information was available for Metlock, Inc. at December 31, 2017:
beginning inventory $79000; ending inventory $134000; cost of goods sold
$608000; and sales $888000. Metlock days in inventory (rounded) in 2017 was
47.4 days.
44.0 days.
64.0 days.
81.1 days.
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