ACC 290 Final Exam (30\30 Correct Answers)
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income statementD. Income statement, capital statement, balance sheet, and statement of cash flows3. In classifying transactions, which of the following is true in regard to assets? A. Normal balances and increases are debitsB. Normal balances and decreases are creditsC. Normal balances can either be debits or credits for assetsD. Normal balances are debits and increases can be debits or credits4. An increase in an expense account must beA. debitedB. creditedC. either debited or credited, depending on the circumstancesD. capitalized5. ABC Corporation issues 100 shares of $1 par common stock at $5 per share, which of the following is the correct journal entry? C. Correct ANSWER (Go with this Option)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 aA. $600 credit balanceB. $1,400 debit balanceC. $800 debit balanceD. $800 credit balance7. Which ledger contains control accounts? A. Accounts receivable subsidiary ledgerB. General ledgerC. Accounts payable subsidiary ledgerD. General revenue and expense ledger8. 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 ledgerB. Accounts receivable control ledgerC. General ledgerD. Accounts payable subsidiary ledger9. Under the cash basis of accountingA. revenue is recognized when services are performedB. expenses are matched with the revenue that is producedC. cash must be received before revenue is recognizedD. a promise to pay is sufficient to recognize revenue10. Under the accrual basis of accountingA. cash must be received before revenue is recognizedB. net income is calculated by matching cash outflows against cash inflowsC. 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 receivedD. the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles11. 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 isA. debit Laundry Expense, $2,000; credit Laundry Expense $2,000B. debit Laundry Expense, $4,500; credit Laundry Supplies Expense, $4,500C. debit Laundry Supplies, $2,000; credit Laundry Supplies Expense, $2,000D. debit Laundry Supplies Expense, $4,500; credit Laundry Supplies, $4,50012. Greese Company purchased office supplies costing $4,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,100 still on hand. The appropriate adjusting journal entry to be made at the end of the period would beA. debit Office Supplies Expense, $1,100; credit Office Supplies, $1,100B. debit Office Supplies, $2,900; credit Office Supplies Expense, $2,900C. debit Office Supplies Expense, $2,900; credit Office Supplies, $2,900D. debit Office Supplies, $1,100; credit Office Supplies Expense, $1,10013. An adjusted trial balanceA. is prepared after the financial statements are completedB. proves the equality of the total debit balances and total credit balances of ledger accounts after all adjustments have been madeC. is a required financial statement under generally accepted accounting principlesD. cannot be used to prepare financial statements14. Given the following adjusted trial balance: Net income for the year isA. $248B. $135C. $162D. $4915. Given the following adjusted trial balance, what will be the totals for the debit and credit columns of the post-closing trial balance? A. $7,396B. $7,118C. $7,334D. $7,17016. 3.2.1 Given the following adjusted trial balance: A. $3,256B. $3,170C. $3,440D. $3,35417. Net income is recorded on the work sheet under theA. debit column of the adjusted trial balance and the credit column of retained earningsB. debit column of the income statement and the credit column of the balance sheetC. credit column of the adjusted trial balance and the debit column of retained earningsD. credit column of the income statement and the debit column of the balance sheet18. At the beginning of the year, Uptown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,500,000. If Uptown Athletic reported ending inventory of $600,000 and sales of $2,000,000, their cost of goods sold and gross profit rate would beA. $900,000 and 65% B. $1,300,000 and 35% C. $900,000 and 35% D. $1,300,000 and 65% 19. During the year, Sarah’s Pet Shop’s merchandise inventory decreased by $30,000. If the company’s cost of goods sold for the year was $450,000, purchases would have beenA. $480,000B. $420,000C. $390,000D. Insufficient data to determine20. At the beginning of the year, Wildcat Athletic had an inventory of $200,000. During the year, the company purchased goods costing $700,000. If Wildcat Athletic reported ending inventory of $300,000 and sales of $1,000,000, their cost of goods sold and gross profit rate would beA. $400,000 and 60% B. $600,000 and 40% C. $400,000 and 40% D. $600,000 and 60% 21. The entry to record of sale of $900 with terms of 2/10, n/30 will include aA. debit to Sales Discount for $18B. debit to Sales Revenue for $882C. credit to Accounts Receivable for $900D. credit to Sales Revenue for $90022.Dobler Company uses a periodic inventory system. Details for the inventory account for the month of January 2012 are as follows: An end of the month (1/31/2012), inventory showed that 140 units were on hand. If the company uses LIFO, what is the value of the ending inventory? A. $737B. $700C. $762D. $1,38023. The difference between ending inventory using LIFO and ending inventory using FIFO is referred to asA. FIFO reserveB. inventory reserveC. LIFO reserveD. periodic reserve24. A consistent application of an inventory costing method enhancesA. conservatismB. accuracyC. comparabilityD. efficiency25. The accountant at Patton Company has determined that income before income taxes amounted to $11,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $300 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption? A. $11,300B. $12,000C. $10,000D. $10,70026. A very small company would have the most difficulty in implementing which of the following internal control activities? A. Separation of duties B. Limited access to assetsC. Periodic independent verificationD. Sound personnel procedures27. A system of internal controlA. is infallibleB. can be rendered ineffective by employee collusionC. invariably will have costs exceeding benefitsD. is premised on the concept of absolute assurance28. The custodian of a company asset shouldA. have access to the accounting record for that assetB. be someone outside the companyC. not have access to the accounting record for that assetD. be an accountant29. The Sarbanes Oxley Act (2002) applies toA. U.S. companies but not international companiesB. international companies but not U.S. companiesC. U.S. and Canadian companies but not other international companiesD. U.S. and international companies