ACC 290 Final Exam (Questions&Answers)

1) Which financial statement is used to determine cash generated from operations? A. Income statement B. Statement of operations C. Statement of cash flows D. Retained earnings statement 2) In terms of sequence, in ...

1) Which financial statement is used to determine cash generated from operations? A. Income statement B. Statement of operations C. Statement of cash flows D. Retained earnings statement 2) In terms of sequence, in what order must the four basic financial statements be prepared? A. Balance sheet, income statement, statement of cash flows, and capital statement B. Income statement, capital statement, statement of cash flows, and balance sheet C. Balance sheet, capital statement, statement of cash flows, and income statement D. Income statement, capital statement, balance sheet, and statement of cash flows 3. In classifying transactions, which of the following is true in regard to assets? A. Normal balances and increases are debits B. Normal balances and decreases are credits C. Normal balances can either be debits or credits for assets D. Normal balances are debits and increases can be debits or credits 4. An increase in an expense account must be A. debited B. credited C. either debited or credited, depending on the circumstances D. capitalized 5. ABC Corporation issues 100 shares of $1 par common stock at $5 per share, which of the following is the correct journal entry? A. Cash $100, Common Stock $ 100 B. Cash $500, Common Stock $500 C. Cash $500, Paid-in-Capital, Excess of Par 400, Common Stock $ 500 D. Cash $100, Paid-in-Capital, Excess of Par 400, Common Stock $ 500 6. In the first month of operations, the total of the debit entries to the cash account amounted to $1,400 and the total of the credit entries to the cash account amounted to $600. The cash account has a A. $600 credit balance B. $1,400 debit balance C. $800 debit balance D. $800 credit balance 7. Which ledger contains control accounts? A. Accounts receivable subsidiary ledger This study source was downloaded by 100000831777157 from CourseHero.com on 08-04-2022 08:01:26 GMT -05:00 https://www.coursehero.com/file/17288995/ACC-290-Final-Exam-QuestionsAnswers/ B. General ledger C. Accounts payable subsidiary ledger D. General revenue and expense ledger 8. Smith is a customer of ABC Corporation. Smith typically purchases merchandise from ABC on account. Which ledger would ABC use to keep track of the details of Smith’s account? A. Accounts receivable subsidiary ledger B. Accounts receivable control ledger C. General ledger D. Accounts payable subsidiary ledger 9. Under the cash basis of accounting A. revenue is recognized when services are performed B. expenses are matched with the revenue that is produced C. cash must be received before revenue is recognized D. a promise to pay is sufficient to recognize revenue 10. Under the accrual basis of accounting A. cash must be received before revenue is recognized B. net income is calculated by matching cash outflows against cash inflows C. events that change a company’s financial statements are recognized in the period they occur rather than in the period in which the cash is paid or received D. the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles 11. The Vintage Laundry Company purchased $6,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $2,000 on hand. The adjusting entry that should be made by the company on June 30 is A. debit Laundry Expense, $2,000; credit Laundry Expense $2,000 B. debit Laundry Expense, $4,500; credit Laundry Supplies Expense, $4,500 C. debit Laundry Supplies, $2,000; credit Laundry Supplies Expense, $2,000 D. debit Laundry Supplies Expense, $4,500; credit Laundry Supplies, $4,500 12. Greese Company purchased office s