ACC 290 FINAL EXAM FEB 2017 VERSION
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ACC 290 FINAL EXAM FEB 2017 VERSION
ACC 290 FINAL EXAM FEB 2017 VERSION
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 resources 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
Multiple Choice Question 101
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.
Multiple Choice Question 59
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
Multiple Choice Question 109
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.
Multiple Choice Question 53
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
Multiple Choice Question 162
Financial information is presented below:
Operating expenses $ 29000
Sales revenue 244000
Cost of goods sold 141000
The profit margin ratio would be
0.70.
0.30.
0.42.
0.58.
Multiple Choice Question 164
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.
Multiple Choice Question 167
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.
Multiple Choice Question 65
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.
Multiple Choice Question 123
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
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
7.5 times.
8.4 times.
5.6 times.
4.4 times.
Multiple Choice Question 163
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.
ACC 290 FINAL EXAM FEB 2017 VERSION