ACC290 FINAL EXAM

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.

Note: This assignment contains the word document and the excel sheet. The assignment is based in a company and they are both related with accurate numbers.