ACC 290 FINAL EXAM ANSWERS 2019

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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 reso... urces 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 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. 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 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. 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 Answers for this question varies from one student to another because the variables change. See the below screenshot for directions on how to calculate your own answer: Financial information is presented below: Operating expenses $ 29000 Sales revenue 244000 Cost of goods sold 141000 The profit margin ratio would be 0.70. Multiple Choice Question 164 Answers for this question varies from one student to another because the variables change. See the below screenshot for directions on how to calculate your own answer: 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. Answers for this question varies from one student to another because the variables change. See the below screenshot for directions on how to calculate your own answer: 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. 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. 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 Answers for this question varies from one student to another because the variables change. See the below screenshot for directions on how to calculate your own answer: 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 Answers for this question varies from one student to another because the variables change. See the below screenshot for directions on how to calculate your own answer: 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. [Show More]

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