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ACCT |\ 2000 |\Final |\Exam |\EOC |\Practice |\Lowe-
Ardoin |\questions |\with |\answers
_Chapter|\1-2|_ What |\is |\the |\basic |\accounting |\equation? |- |\CORRECT |\ANSWERS |
✔✔Assets |= |\Liabilities |+ |\Stockholders' |\Equity Which |\is |\an |\advantage |\of |\corporations |\relative |\to |\partnerships |\and |
sole |\proprietorships? |- |\CORRECT |\ANSWERS |\✔✔Reduced |\legal |\liability |\for |\investors Which |\forms |\of |\business |\organization |\are |\considered |\to |\be |\separate |\accounting |\entities? |- |\CORRECT |\ANSWERS |\✔✔Sole |\Proprietorship, |
Corporations, |\and |\Partnerships. Which |\of |\the |\following |\did |\NOT |\result |\from |\the |\Sarbanes-Oxley |\Act? |- |\CORRECT |\ANSWERS |\✔✔Tax |\rates |\on |\corporations |\increased. The |\payment |\of |\dividends |\is |\an |\example |\of |\a(n) |- |\CORRECT |
ANSWERS |\✔✔financing |\activity
What |\kind |\of |\classification |\is |\cost |\of |\goods |\sold? |- |\CORRECT |
ANSWERS |\✔✔expense What |\section |\of |\cash |\flow |\statement |\shows |\the |\cash |\spent |\on |\new |
equipment |\during |\the |\past |\accounting |\period? |- |\CORRECT |\ANSWERS |\✔✔The |\investing |\section If |\total |\liabilities |\decreased |\by |$15,000 |\and |\stockholders' |\equity |
increased |\by |$5,000 |\during |\a |\period |\of |\time, |\then |\total |\assets |\must |\change |\by |\what |\amount |\and |\direction |\during |\that |\same |\period? |- |
CORRECT |\ANSWERS |\✔✔$10,000 |\decrease (Assets |= |\Liabilities |+ |\Stockholders' |\Equity) Which |\is |\NOT |\one |\of |\the |\three |\forms |\of |\business |\organizations? |- |
CORRECT |\ANSWERS |\✔✔Creditorship Ease |\of |\transferring |\ownership |\is |\a |\characteristic |\of |\which |\form |\of |
business |\organization? |- |\CORRECT |\ANSWERS |\✔✔Corporation In |\which |\forms |\of |\business |\organization |\are |\the |\owners |\personally |
liable |\for |\all |\the |\debts |\of |\the |\business? |- |\CORRECT |\ANSWERS |
✔✔Sole |\proprietorships |\and |\Partnerships
Paying |\interest |\expense |\and |\receiving |\interest |\revenue |\are |
examples |\of |- |\CORRECT |\ANSWERS |\✔✔Operating |\activates Which |\of |\the |\following |\is |\NOT |\one |\of |\the |\three |\primary |\business |
activities? |- |\CORRECT |\ANSWERS |\✔✔Advertising Which |\of |\the |\following |\is |\an |\example |\of |\a |\financing |\activity? |- |
CORRECT |\ANSWERS |\✔✔Issuing |\shares |\of |\common |\stock Resources |\owned |\by |\a |\business |\are |\referred |\to |\as |- |\CORRECT |
ANSWERS |\✔✔assets In |\terms |\of |\the |\principal |\types |\of |\business |\activities, |\paying |\salaries |\expense |\is |\an |\example |\of |\an |- |\CORRECT |\ANSWERS |\✔✔operating |
activity On |\Jan. |\10, |\Novis |\Company |\purchased |\manufacturing |\equipment |\for |$80,000 |\cash. |\What |\kind |\of |\activity |\is |\this? |- |\CORRECT |\ANSWERS |
✔✔Investing |\activity In |\what |\section |\of |\the |\statement |\of |\cash |\flows |\would |\the |\purchase |
of |\office |\equipment |\for |$10,000 |\cash |\appear? |- |\CORRECT |\ANSWERS |
✔✔Investing |\activities
Which |\of |\the |\following |\is |\NOT |\one |\of |\the |\primary |\types |\of |\the |
financing |\activities |\in |\the |\statement |\of |\cash |\flows? |- |\CORRECT |
ANSWERS |\✔✔Buying |\equipment Which |\of |\the |\following |\would |\NOT |\appear |\on |\the |\income |
statement? |- |\CORRECT |\ANSWERS |\✔✔Dividends |\paid Which |\of |\the |\following |\would |\NOT |\appear |\on |\the |\retained |\earnings |\statement? |- |\CORRECT |\ANSWERS |\✔✔service |\revenue Net |\income |\will |\result |\during |\a |\time |\period |\when |- |\CORRECT |
ANSWERS |\✔✔revenues |\exceed |\expenses The |\financial |\statements |\for |\Harold |\Corporation |\contained |\the |
following |\information: Accounts |\receivable: |$5, Sales |\Revenue: |$75, Cash: |$15, Salaries |\and |\wages |\expense: |$20, Rent |\expense: |$10, How |\much |\was |\Harold's |\net |\income? |- |\CORRECT |\ANSWERS |
✔✔$45,
Saira's |\Maid |\Service |\began |\the |\year |\with |\total |\assets |\of |$120,000 |
and |\stockholders' |\equity |\of |$40,000. |\During |\the |\year |\the |\company |
earned |$90,000 |\in |\net |\income |\and |\paid |$20,000 |\in |\dividends. |\Total |
assets |\at |\the |\end |\of |\the |\year |\were |$215,000. |\How |\much |\are |\total |
liabilities |\at |\the |\end |\of |\the |\year? |- |\CORRECT |\ANSWERS |\✔✔$105, (Assets= |\Liabilities |+ |\Stockholders' |\Equity) The |\balance |\sheet |- |\CORRECT |\ANSWERS |\✔✔reports |\the |\assets, |
liabilities, |\and |\stockholders' |\equity |\at |\a |\specific |\point |\in |\time Stockholders' |\equity |\represents |- |\CORRECT |\ANSWERS |\✔✔claims |\of |
owners As |\of |\December |\31, |\2022, |\Stoneland |\Corporation |\has |\assets |\of |
$3,500 |\and |\stockholders' |\equity |\of |$2,000. |\How |\much |\are |\the |
liabilities |\for |\Stoneland |\Corporation |\as |\of |\December |\31, |\2022? |- |
CORRECT |\ANSWERS |\✔✔$1, The |\segment |\of |\a |\corporation's |\annual |\report |\that |\describes |\the |
corporation's |\accounting |\methods |\is |\the |- |\CORRECT |\ANSWERS |
✔✔notes |\to |\the |\financial |\statements The |\segment |\of |\the |\annual |\report |\that |\presents |\an |\opinion |
regarding |\the |\fairness |\of |\the |\presentation |\of |\the |\financial |\position |\
and |\results |\of |\operations |\is/are |\the |- |\CORRECT |\ANSWERS |
✔✔auditor's |\opinion When |\the |\auditor |\is |\satisfied |\that |\the |\financial |\statements |\provide |\a |\fair |\representation |\of |\the |\company's |\financial |\position |\and |\results |
of |\operation |\in |\accordance |\with |\generally |\accepted |\accounting |
principles, |\the |\auditor |\will |\express |- |\CORRECT |\ANSWERS |\✔✔an |
unqualified |\opinion An |\annual |\report |\includes |\all |\of |\the |\following |\EXCEPT |- |\CORRECT |
ANSWERS |\✔✔A |\listing |\of |\all |\of |\the |\stockholders Which |\section |\of |\the |\annual |\report |\presents |\highlights |\of |\favorable |
or |\unfavorable |\trends |\and |\identifies |\significant |\events |\and |
uncertainties |\affecting |\a |\company's |\ability |\to |\pay |\near-term |
obligations, |\and |\a |\company's |\ability |\to |\fund |\operations |\and |
expansion? |- |\CORRECT |\ANSWERS |\✔✔Management |\discussion |\and |
analysis Which |\of |\the |\following |\is |\required |\as |\a |\result |\of |\SOX? |- |\CORRECT |
ANSWERS |\✔✔Top |\management |\must |\certify |\the |\financial |\statements |\for |\their |\company. In |\what |\order |\are |\current |\assets |\listed? |- |\CORRECT |\ANSWERS |\✔✔By |\liquidity
Which |\of |\the |\following |\is |\considered |\property, |\plant |\and |\equipment |\on |\a |\classified |\balance |\sheet? |- |\CORRECT |\ANSWERS |\✔✔land current |\liabilities |\are |$10,000, |\long-term |\liabilities |\are |$20,000, |
common |\stock |\is |$50,00-0, |\and |\retained |\earnings |\totals |$70,000. |
How |\much |\is |\total |\stockholders' |\equity? |- |\CORRECT |\ANSWERS |
✔✔$120, Issuing |\new |\shares |\of |\common |\stock |\will |- |\CORRECT |\ANSWERS |
✔✔increase |\common |\stock Chapter |\3-5 |- |\CORRECT |\ANSWERS |\✔✔ What |\are |\the |\fundamental |\qualities? |- |\CORRECT |\ANSWERS |\✔✔1. |
Relevance
- |\Faithful |\Representation what |\are |\the |\enhancing |\qualities? |- |\CORRECT |\ANSWERS |
✔✔Comparability, |\verifiability, |\timeliness, |\and |\understandability in |\a |\Classified |\balance |\sheet, |\how |\are |\assets |\usually |\classified? |- |
CORRECT |\ANSWERS |\✔✔current |\assets; |\long-term |\investments; |
property, |\plant |\and |\equipment; |\and |\intangible |\assets
What |\is |\the |\primary |\accounting |\standard-setting |\body |\in |\the |\United |\States? |- |\CORRECT |\ANSWERS |\✔✔Financial |\Accounting |\Standards |
Board |(FASB) An |\item |\is |________ |\if |\it |\is |\likely |\to |\influence |\the |\decision |\of |\an |
investor |\or |\creditor. |- |\CORRECT |\ANSWERS |\✔✔material |(materiality) The |\effect |\on |\the |\basic |\accounting |\equation |\of |\performing |\services |
for |\cash |\are |\to |- |\CORRECT |\ANSWERS |\✔✔increase |\assets |\and |
increase |\stockholders' |\equity If |\an |\expense |\is |\paid |\with |\cash |- |\CORRECT |\ANSWERS |\✔✔assets |\will |
decrease what |\are |\generally |\accepted |\accounting |\principles |- |\CORRECT |
ANSWERS |\✔✔A |\set |\of |\accounting |\standards |\that |\have |\authoritative |
support What |\organization |\issues |\international |\financial |\reporting |\standards? |- |\CORRECT |\ANSWERS |\✔✔International |\Accounting |\Standards |\Board what |\are |\the |\accounting |\rules |\that |\have |\substantial |\authoritative |
support |\and |\are |\recognized |\as |\a |\general |\guide |\for |\financial |\
Which |\of |\the |\following |\events |\is |\NOT |\recorded |\in |\the |\accounting |
records? |- |\CORRECT |\ANSWERS |\✔✔An |\employee |\is |\terminated During |\2022, |\Gibson |\Company |\assets |\decreased |$50,000 |\and |\its |
liabilities |\decreased |$90,000. |\Its |\stockholders' |\equity |\therefore: |- |
CORRECT |\ANSWERS |\✔✔increased |$40, If |\cash |\is |\received |\in |\an |\advance |\from |\a |\customer |- |\CORRECT |
ANSWERS |\✔✔liabilities |\will |\increase |(unearned |\revenue) Receipt |\of |\an |\unearned |\revenue |- |\CORRECT |\ANSWERS |\✔✔increases |
an |\asset; |\increases |\a |\liability. payment |\of |\a |\dividend |- |\CORRECT |\ANSWERS |\✔✔decreases |\cash; |
decreases |\retained |\earnings. If |\a |\company |\receives |\cash |\from |\a |\customer |\before |\performing |
services |\for |\the |\customer, |\then |- |\CORRECT |\ANSWERS |\✔✔assets |
increase |\and |\liabilities |\increase If |\total |\liabilities |\increase |\by |$5,000 |\then |- |\CORRECT |\ANSWERS |
✔✔assets |\increase |\by |$5,000, |\or |\stockholders' |\equity |\decrease |\by |
$5,000.
What |\type |\of |\account |\is |\unearned |\revenue? |- |\CORRECT |\ANSWERS |
✔✔liability Ignatenko |\Company |\purchased |\office |\supplies |\costing |$5,000 |\and |
increasing |\supplies |\for |\the |\full |\amount. |\Supplies |\on |\hand |\at |\the |
end |\of |\the |\accounting |\period |\were |$1,300. |\The |\appropriate |
adjustment |\at |\the |\end |\of |\the |\period |\is? |- |\CORRECT |\ANSWERS |
✔✔increase |\Supplies |\Expense |\and |\decrease |\Supplies |\by |$3, Bonita |\Realty |\Management |\Co. |\received |\a |\check |\for |$30,000 |\on |
October |\1, |\which |\represents |\a |\one |\year |\advance |\payment |\of |\rent |
on |\an |\office |\it |\rents |\to |\a |\client. |\Unearned |\Rent |\Revenue |\was |
credited |\for |\the |\full |$30,000. |\Financial |\statements |\are |\prepared |\on |
December |\31. |\The |\appropriate |\adjustment |\to |\make |\on |\December |
31 |\of |\the |\first |\year |\would |\be: |- |\CORRECT |\ANSWERS |\✔✔decrease |
Unearned |\Rent |\Revenue |\and |\increase |\Rent |\Revenue |\by |$7, adjustments |\for |\accrued |\revenues |- |\CORRECT |\ANSWERS |\✔✔increase |\assets |\and |\increase |\revenues. A |\company |\lends |$15,000 |\at |\8% |\interest |\for |\ 3 |\months |\on |\June |\1. |\if |
adjustments |\are |\made |\on |\June |\30, |\how |\much |\will |\interest |\revenue |
increase? |- |\CORRECT |\ANSWERS |\✔✔$ (15000 |\X |\8% |\X |(1/12))
On |\July |\1, |\Mesa |\Verde, |\inc. |\purchased |\a |\6-month |\insurance |\policy |
for |$12,600. |\Prepaid |\insurance |\was |\increased |\for |\the |\entire |\amount. |\If |\the |\company |\prepares |\financial |\statements |\at |\July |\31, |\the |
appropriate |\adjustment |\would |\be |- |\CORRECT |\ANSWERS |\✔✔increase |
Insurance |\Expense |\and |\decrease |\Prepaid |\Insurance |\by |$ At |\December |\31, |\2022, |\before |\any |\year-end |\adjustments, |\Marty |
Company's |\Prepaid |\Insurance |\account |\had |\a |\balance |\of |$2,700. |\it |
was |\determined |\that |$1,500 |\of |\the |\prepaid |\Insurance |\had |\expired. |
The |\adjusted |\balance |\for |\insurance |\expense |\for |\the |\year |\would |\be |- |\CORRECT |\ANSWERS |\✔✔$1, On |\August |\ 1 |\the |\Darius |\Co. |\purchased |\a |\photocopy |\machine |\for |
$8,000. |\The |\estimated |\annual |\depreciation |\on |\the |\machine |\is |
$1,680. |\If |\the |\company |\prepares |\annual |\financial |\statements |\on |
December |\31, |\the |\appropriate |\adjusting |\journal |\entry |\to |\make |\on |
December |\ 31 |\of |\the |\first |\year |\would |\be |- |\CORRECT |\ANSWERS |
✔✔Increase |\depreciation |\expense |\and |\increase |\accumulated |
depreciation- |\equipment |\for |$ (1,680 |\x |(5/12)) if |\the |\adjustment |\at |\the |\end |\of |\the |\accounting |\period |\is |\NOT |\made |\for |\unearned |\revenues, |\then |\the |\result |\will |\be |\to |- |\CORRECT |
ANSWERS |\✔✔overstate |\liabilities |\and |\understate |\revenues
Which |\of |\the |\following |\is |\NOT |\a |\typical |\example |\of |\an |\accrued |- |
CORRECT |\ANSWERS |\✔✔depreciation During |\the |\adjusting |\process |\two |\transactions |\were |\missed. |\The |
first |\is |\for |\unearned |\rent |\revenue |\of |\which |$450 |\was |\earned |\during |\the |\period, |\the |\second |\was |\for |\accrued |\interest |\payable |\of |\which |
$275 |\is |\owed |\for |\the |\period. |\As |\a |\result |\of |\these |\omissions |- |
CORRECT |\ANSWERS |\✔✔net |\income |\is |\understated |\by |$ at |\the |\end |\of |\fiscal |\year, |\the |\usual |\adjustment |\made |\at |\the |\end |\of |
an |\accounting |\period |\for |\accrued |\salaries |\owned |\to |\employees |\was |
omitted. |\Which |\of |\the |\following |\statements |\is |\true? |- |\CORRECT |
ANSWERS |\✔✔Liabilities |\at |\the |\end |\of |\the |\year |\are |\understated On |\August |\1, |\Luang |\Corporation |\signed |\a |$30,000, |\14%, |\2-year |\note |\to |\help |\finance |\renovations |\being |\made |\to |\the |\corporation |
headquarters. |\Assuming |\interest |\is |\accrued |\only |\when |\the |\year |
ends |\on |\December |\31, |\the |\appropriate |\adjustment |\to |\record |
interest |\expense |\for |\the |\first |\year |\would |\be |- |\CORRECT |\ANSWERS |
✔✔an |\increase |\to |\interest |\expense |\and |\an |\increase |\to |\interest |
payable |\for |$1,750. ($30,000 |\x |.14 |\x |\5/12) Saira |\works |\for |\a |\sports |\franchise |\which |\pays |\wages |\and |\salaries |
earned |\on |\a |\monthly |\basis. |\A |\new |\accountant |\was |\hired |\by |\the |
sports |\franchise |\in |\late |\May. |\Due |\to |\inexperience, |\the |\new |\
for |\which |\item |\below |\might |\a |\bank |\issue |\a |\debit |\memorandum |\to |
depositor's |\account? |- |\CORRECT |\ANSWERS |\✔✔monthly |\service |
charges Jones |\Company |\collected |\the |\following |\information |\to |\prepare |\its |
May |\bank |\reconciliation: Cash |\balance |\per |\books, |\May |\ 31 |$5, Deposits |\in |\transit |\ 510 Notes |\receivable |\with |\interest |\collected |\by |\bank |\ 580 Bank |\service |\charges |\ 30 Outstanding |\checks |\ 180 NSF |\check |\ 150 How |\much |\is |\the |\adjusted |\cash |\balance |\per |\books |\on |\May |\31? |- |
CORRECT |\ANSWERS |\✔✔$5, Barker |\Company |\collected |\the |\following |\information |\to |\prepare |\its |
November |\bank |\reconciliation: Cash |\balance |\per |\bank, |\November |\ 30 |$21, Note |\receivable |\plus |\interest |\collected |\9, Outstanding |\checks |\6,
Deposits |\in |\transit |\5, Bank |\service |\charges |\ 85 NSF |\check |\2, How |\much |\is |\the |\cash |\balance |\per |\books |\prior |\to |\preparing |\the |
reconciliation? |- |\CORRECT |\ANSWERS |\✔✔$13,585 |
(20,400 |= |\x |+ |\9,000 |- |\ 85 |- |\2,100) For |\which |\of |\the |\following |\will |\an |\adjustment |\be |\required |\as |\part |\of |\a |\bank |\reconcilliation? |- |\CORRECT |\ANSWERS |\✔✔NSF |\checks Which |\of |\the |\following |\will |\NOT |\require |\and |\adjustment |\as |\part |\of |
a |\bank |\reconciliation |- |\CORRECT |\ANSWERS |\✔✔Deposits |\in |\transit Which |\is |\the |\adjustment |\Max |\Company |\would |\prepare |\when |\the |
bank |\collects |\a |$200 |\note |\receivable |\from |\one |\of |\Max's |\customers? |- |\CORRECT |\ANSWERS |\✔✔Increase |\Cash |\and |\decrease |\Notes |
Receivable The |\correct |\adjustment |\for |\the |\account |\holder |\when |\the |\bank |
submits |\a |\debit |\memorandum |\for |\a |\monthly |\service |\charge |\of |$30 |
includes |\an |\increase |\to |- |\CORRECT |\ANSWERS |\✔✔Bank |\charge |
expense
