ACC290 FINAL EXAM
ACC290 FINAL EXAM: Multiple choice question
The best definition of assets is the
- • 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
- • Owners’ investment in the business
- • Cash owned by the company.
Multiple choice question
Which of the following is not a liability?
- • Unearned service revenue
- • Account payable
- • Accounts receivable
- • Interest payable
Multiple choice question
Which of the following financial statements is divided into major categories of operating, investing, and financing activities?
- • The retained earnings statement.
- • The statement of cash flows
- • The balance sheet.
- • The income statement.
Multiple choice question
- • 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
Which of the following is not an advantage of the corporate form of business organization?
- • Easy to transfer ownership
- • Easy to raise funds.
- • Favorable tax treatment.
- • No personal liability.
Multiple choice question
An advantage of the corporate form of business is that
- • Its owner’s personal resources are at stake.
- • It has limited life.
- • Its ownership is easily transferable via the sale of shares of stock.
- • It is simple to establish
ACC290 FINAL EXAM Multiple choice question
A small neighborhood barber shop that is operated by its owner would likely be organized as a
- • Partnership.
- • Corporation.
- • Joint venture.
- • Proprietorship.
Multiple choice question
If services are rendered for cash, then
- • Liabilities will decrease.
- • Liabilities will increase
- • Assets will increase.
- • Stockholders’ equity will decrease.
Multiple choice question
A revenue generally
- • Increases assets and decreases stockholders’ equity.
- • Increases assets and liabilities
- • Leaves total assets unchanged
- • Increases assets and stockholders’ equity.
Multiple choice question
A revenue account
- • Is increased by debits.
- • Is decreased by credits.
- • Has a normal balance of a debit
- • Is increased by credits.
Multiple choice question
Which accounts normally have debit balances?
- • Assets, expense, and retained earnings
- • Assets, liabilities, and dividends
- • Assets, expenses, and dividends
- • Assets, expenses, and revenues
Multiple choice question
In recording an accounting transaction in a double-entry system
- • The number of debit accounts must equal the number of credit accounts.
- • The amount of the debits must equal the amount of the credits.
- • There must only be two accounts affected by any transaction.
- • There must always be entries made on both sides of the accounting equation.
Multiple choice question
The usual sequence of steps in the transaction recording process is
- • Journalize, analyze, post to the ledger.
- • Analyze, journalize, post to the ledger.
- • Journalize, post to the ledger, analyze
- • Post to the ledger, journalize, analyze
Multiple choice question
Under the expense recognition principle expenses are recognized when
- • They are billed by the supplier.
- • They are paid
- • The invoice is received.
- • They contribute to the production of revenue
Multiple choice question
The revenue recognition principle dictates that revenue should be recognized in the accounting records:
- • When cash is received.
- • When the performance obligation is satisfied.
- • At the end of the month.
- • In the period that income taxes are paid.
Multiple choice question
Merchandising companies that sell to retailers are known as
- • Wholesalers.
- • Service firms.
- • Brokers.
- • Corporations.
Multiple choice question
Gross profit equals the difference between
- • Sales revenue and cost of goods sold.
- • Sales revenue and operating expenses.
- • Sales revenue and cost of goods sold plus operating expenses.
- • Net income and operating expenses.
Multiple choice question
Net income will result if gross profit exceeds
- • Cost of goods sold.
- • Purchases.
- • Cost of goods sold plus operating expenses
- • Operating expenses
ACC290 FINAL EXAM Multiple choice question
Under the perpetual system, cash freight costs incurred by the buyer for the transporting of goods is recorded in which account?
- • Inventory
- • Freight-in
- • Freight-out
- • Freight expense
Multiple choice question
Financial information is presented below:
|
Operating expenses |
$ 44000 |
|
Sales revenue |
229000 |
|
Cost of goods sold |
159000 |
The profit margin ratio would be
- • 0.69.
- • 0.31.
- • 0.11.
- • 0.89
ACC290 FINAL EXAM Multiple choice question
Financial information is presented below:
|
Operating expenses |
$ 20000 |
|
Sales returns and allowances |
9000 |
|
Sales discounts |
4000 |
|
Sales revenue |
190000 |
|
Cost of goods sold |
91000 |
The gross profit rate would be
- • 0.54
- • 0.53.
- • 0.49.
- • 0.45.
Multiple choice question
Financial information is presented below:
|
Operating expenses |
$ 57000 |
|
Sales returns and allowances |
3000 |
|
Sales discounts |
6000 |
|
Sales revenue |
142000 |
|
Cost of goods sold |
110000 |
Gross profit would be
- • $23000.
- • $35000.
- • $29000.
- • $32000.
Multiple choice question
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 ending inventory.
- • The last to be allocated to cost of goods sold.
- • The first to be allocated to cost of goods sold
Multiple choice question
Which of the following statements is correct with respect to inventories?
- • The fifo method assumes that the costs of the earliest goods acquired are the last to be sold.
- • Under fifo, the ending inventory is based on the latest units purchased
- • Fifo seldom coincides with the actual physical flow of inventory
- • It is generally good business management to sell the most recently acquired goods first.
Multiple choice question
All of the following are examples of internal control procedures except
- • Using prenumbered documents.
- • Reconciling the bank statement.
- • Insistence that employees take vacations.
- • Customer satisfaction surveys.
ACC290 FINAL EXAM Multiple choice question
Each of the following is a feature of internal control except
- • Separation of duties.
- • Recording of all transactions
- • An extensive marketing plan
- • Bonding of employees
Multiple choice question
For which of the following errors should the appropriate amount be subtracted from the balance per books on a bank reconciliation?
- • Deposit of $500 recorded by the bank as $50.
- • A returned $200 check recorded by the bank as $20.
- • Check written for $59, but recorded by the company as $95.
- • Check written for $53, but recorded by the company as $35.
ACC290 FINAL EXAM Multiple choice question
A check written by the company for $117 is incorrectly recorded by a company as $171. On the bank reconciliation, the $54 error should be
- • Added to the balance per books.
- • Deducted from the balance per bank.
- • Deducted from the balance per books.
- • Added to the balance per bank.
Multiple choice question
The following information was available for kingbird, inc. At december 31, 2017: beginning inventory $70000; ending inventory $108000; cost of goods sold $644000; and sales $888000. Kingbird inventory turnover ratio (rounded) in 2017 was
- • 6.0 times.
- • 10.0 times.
- • 9.2 times
- • 7.2 times.
Multiple choice question
The following information was available for marigold corp. At december 31, 2017: beginning inventory $87000; ending inventory $122000; cost of goods sold $632000; and sales $872000. Marigold days in inventory (rounded) in 2017 was (round intermediate calculation to 1 decimal place, e.g. 1.2.)
- • 44.0 days.
- • 70.2 days.
- • 50.0 days.
- • 60.8 days.
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