(Solution) -ACC 290 Final Exam Guide Latest

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ACC 290 Final Description NEW

Question 1
The best definition of assets is the
 
collections of resources belonging to the company and the claims on these resources.
cash owned by the company.
owners’ investment in the business.
resources belonging to a company that have future benefit to the company.
 
           
Question 2
Which of the following is not a liability?
 
 
Accounts Payable
Accounts Receivable
Interest Payable
Unearned Service Revenue
 
Question 3
Which of the following financial statements is divided into major categories of operating, investing, and financing activities?
 
 
The statement of cash flows.
The income statement.
The balance sheet.
The retained earnings statement.
 
Question 4
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.
 
 
Question 5      
Which of the following is not an advantage of the corporate form of business organization?
 
 
No personal liability
Easy to raise funds
Easy to transfer ownership
Favorable tax treatment
 
 
 
Question 6
An advantage of the corporate form of business is that
 
 
it is simple to establish.
it has limited life.
 its owner’s personal resources are at stake.
its ownership is easily transferable via the sale of shares of stock
 
 
Question 7
A small neighborhood barber shop that is operated by its owner would likely be organized as a
 
 
proprietorship.
partnership.
 joint venture.
corporation.
 
 
 
Question 8
 
If services are rendered for cash, then
 
stockholders’ equity will decrease.
liabilities will increase.
liabilities will decrease.
assets will increase.
 
Question 9
           
A revenue generally
 
 
increases assets and stockholders’ equity.
increases assets and liabilities.
increases assets and decreases stockholders’ equity.
leaves total assets unchanged.
 
Question 10
A revenue account
 
has a normal balance of a debit.
is decreased by credits.
is increased by credits.
is increased by debits.
 
Question 11
 
Which accounts normally have debit balances?
 
 
Assets, expenses, and dividends
Assets, expenses, and revenues
Assets, expense, and retained earnings
Assets, liabilities, and dividends
 
Question 12
In recording an accounting transaction in a double-entry system
 
 
the number of debit accounts must equal the number of credit accounts.
there must only be two accounts affected by any transaction.
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.
 
 
Question 13
 
           
The usual sequence of steps in the transaction recording process is
 
 
journalize, analyze, post to the ledger.
post to the ledger, journalize, analyze.
analyze, journalize, post to the ledger.
journalize, post to the ledger, analyze.
 
Question 14
 
 
Under the expense recognition principle expenses are recognized when
 
 
they contribute to the production of revenue.
they are billed by the supplier.
they are paid.
the invoice is received.
 
Question 15
           
The revenue recognition principle dictates that revenue should be recognized in the accounting records:
 
 
in the period that income taxes are paid.
when cash is received.
when the performance obligation is satisfied.
at the end of the month.
 
 
Question 16
 
Merchandising companies that sell to retailers are known as
 
 
brokers.
corporations.
wholesalers.
service firms.
 
Question 17
 
           
Gross profit equals the difference between
 
 
sales revenue and cost of goods sold.
sales revenue and operating expenses.
net income and operating expenses.
sales revenue and cost of goods sold plus operating expenses
 
Question 18
 
Net income will result if gross profit exceeds
 
 
purchases.
 cost of goods sold.
operating expenses.
cost of goods sold plus operating expenses.
 
Question 19
Under the perpetual system, cash freight costs incurred by the buyer for the transporting of goods is recorded in which account?
 
 
Freight-In
Inventory
Freight Expense
Freight-Out
 
Question 20
           
Financial information is presented below:
Operating expenses                 $ 25000
Sales revenue              175000
Cost of goods sold                  125000
 
The profit margin ratio would be
 
 
Question 21
 
           
Financial information is presented below:
Operating expenses     $ 31000
Sales returns and allowances  6000
Sales discounts            5000
Sales revenue  180000
Cost of goods sold      87000
 
The gross profit rate would be
 
 
Question 22
           
Financial information is presented below:
Operating expenses     $ 54000
Sales returns and allowances  5000
Sales discounts            5000
Sales revenue  206000
Cost of goods sold      109000
 
Gross Profit would be
 
 
 
$102000.
$92000.
$97000.
$87000
 
Question 23
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.
 
Question 24
 
Which of the following statements is correct with respect to inventories?
 
 
FIFO seldom coincides with the actual physical flow of inventory.
 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.
Under FIFO, the ending inventory is based on the latest units purchased.
 
 
           
 
 
Question 25
           
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.
 
 
Question 26
Each of the following is a feature of internal control except
 
 
recording of all transactions.
bonding of employees.
an extensive marketing plan.
separation of duties.
 
 
Question 27    
For which of the following errors should the appropriate amount be subtracted from the balance per books on a bank reconciliation?
 
 
Check written for $95, but recorded by the company as $59
 
Deposit of $500 recorded by the bank as $50.
Check written for $53, but recorded by the company as $35.
A returned $200 check recorded by the bank as $20.
 
 
Question 28
A check written by the company for $126 is incorrectly recorded by a company as $162. On the bank reconciliation, the $36 error should be
 
 
deducted from the balance per books.
added to the balance per bank.
added to the balance per books.
deducted from the balance per bank.
 
 
Question 29
The following information was available for Blossom Company at December 31, 2017: beginning inventory $93000; ending inventory $146000; cost of goods sold $676000; and sales $824000. Blossom inventory turnover ratio (rounded) in 2017 was
 
7.3 times.
4.6 times.
6.9 times.
5.7 times.
 
 
Question 30
           
The following information was available for Sheridan Company at December 31, 2017: beginning inventory $80000; ending inventory $132000; cost of goods sold $644000; and sales $816000. Sheridan days in inventory (rounded) in 2017 was
 
47.4 days.
45.1 days.
59.8 days.
74.5 days.