ACC 280 Final Exam (4th Set) 43 Questions.doc
ACC 280 Final Exam (4th Set) 43 Questions.doc PRG211
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Date Created: 11/16/15
ACC 280 Final Exam PS Your questions will be chosen randomly from a large set of questions Nobody can guarantee that these questions will cover completely your exam If I helped you please leave A feedback I need it very much Thank you and good luck 1 Communication of economic events is the part of the accounting process that involves A identifying economic events B quantifying transactions into dollars and cents C preparing accounting reports D recording and classifying information 2 The SEC and FASB are two organizations that are primarily responsible for establishing generally accepted accounting principles It is true that A they are both governmental agencies B the SEC is a private organization of accountants C the SEC often mandates guidelines when no accounting principles exist D the SEC and FASB rarely cooperate in developing accounting standards 3 Revenues would not result from A sale of merchandise B issuance of common stock C performance of services D rental of property 4 The accounting equation for Goodboys Enterprises is as follows Assets Liabilities Stockholders39 Equity 120000 60000 60000 If Goodboys purchases of ce equipment on account for 12000 the accounting equation will change to Assets Liabilities Stockholders39 Equity a 120000 60000 60000 b 132000 60000 72000 c 132000 66000 66000 1 132000 7 2000 60000 5 The usual sequence of steps in the transaction recording process is A journal analyze ledger B analyze iournal led2er C journal ledger analyze D ledger journal analyze 6 At September 1 2008 Foli Co reported retained earnings of 136000 During the month Foli generated revenues of 20000 incurred expenses of 12000 purchased equipment for 5000 and paid dividends of 2000 What is the amount of retained earnings at September 30 2008 A 136000 B 8000 C 137000 D 142000 7 Which of the following statements is false A Revenues increase stockholders39 equity B Revenues have normal credit balances C Revenues are a positive factor in the computation of net income D Revenues are increased bv debiti 8 Under accrualbasis accounting A cash must be received before revenue is recognized B net income is calculated by matching cash out ows against cash in ows C events that change a companv39s financial statements are recognized in the Deriod thev occur rgher t m in the period in which cash is paid or received D the ledger accounts must be adjusted to re ect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles 9 The matching principle states that expenses should be matched with revenues Another way of stating the principle is to say that A assets should be matched with liabilities B efforts should be matched with accomplishments C dividends to stockholders should be matched with stockholders39 investments D cash payments should be matched with cash receipts 10 Which statement is correct A As long as a company consistently uses the cash basis of accounting generally accepted accounting principles allow its use B The use of the cash basis of accounting violates boththe revenue recognition and matching principles C The cash basis of accounting is objective because no one can be certain of the amount of revenue until the cash is received D As long as management is ethical there are no problems with using the cash basis of accounting 11 An adjusting entry A affects two balance sheet accounts B affects two income statement accounts C affects a balance sheet account and an income statement account D is always a compound entry 12 Expenses incurred but not yet paid or recorded are called A prepaid expenses B accrued expenses C interim expenses D unearned expenses 13 Unearned revenues are A received and recorded asliabilities before thev are earned B earned and recorded as liabilities before they are received C earned but not yet received or recorded D earned and already received and recorded 14 Younger Corporation purchased a oneyear insurance policy in January 2008 for 48000 The insurance policy is in effect from May 2008 through April 2009 If the company neglects to make the proper yearend adjustment for the expired insurance A Net income and assets will be understated by 32000 B Net income Mssets will be overstated by 32000 C Net income and assets will be understated by 16000 D Net income and assets will be overstated by 16000 Use the following to answer questions 1519 The following items are taken from the nancial statements of Cerner Company for the year ending December 31 2008 Accounts payable 18000 Accounts receivable 11000 Accumulated depreciation equipment 28000 Advertising expense 21000 Cash 15000 Retained Earnings 1108 80000 Common Stock 22000 Dividends 14000 Depreciation expense 12000 Insurance expense 3000 Note payable due 63010 70000 Prepaid insurance 12month policy 6000 Rent expense 17000 Salaries expense 32000 Service revenue 133000 Supplies 4000 Supplies expense 6000 Equipment 210000 15 What is the company39s net income for the year ending December 31 2008 A 133000 B 42000 C 28000 D 12000 16 What is the total that would be reported for stockholders39 equity at December 31 2008 A 102000 B 130000 C 144000 D 158000 17 What are total current assets at December 31 2008 A 26000 B 32000 C 36000 D 218000 18 What are total current liabilities at December 31 2008 A 18000 B 70000 C 88000 D 0 19 What is total liabilities and stockholders39 equity at December 31 2008 A 176000 B 190000 C 218000 D 232000 20 Which of the following steps in the accounting cycle may be performed more frequently than annually A Prepare a postclosing trial balance B J ournalize closing entries C Post closing entries D Prepare a trial balance 21 If the total debit column exceeds the total credit column of the income statement columns on a worksheet then the company has A earned net income for the period B an error because debits do not equal credits C suffered a net loss for the period D to make an adjusting entry 22 Closing entries are necessary for A permanent accounts only B temporary accounts only C both permanent and temporary accounts D permanent or real accounts only 23 The principle that requires circumstances and events that make a difference to nancial statement users be reported is the A cost principle B full disclosure principle C matching principle D revenue recognition principle 24 Constraints in accounting include each of the following except A conservatism B matching C materiality D All of these are constraints 25 Which one of the following is not an objective of financial reporting according to the conceptual framework A To provide information that will increase the value of the company B To provide information in assessing future cash ows C To provide information that is useful for making investment and credit decisions D To provide information that identifies economic resources the claims to those resources and the changes in those resources and claims 26 The time period assumption recognizes that A revenue should be recognized in the accounting period in which it is earned B the economic life of a business can be divided into artificial time periods C expenses should be recognized in the period of their association with earned revenue D economic events can be identified with a particular unit of accountability 27 Profit margin is a measure of A liquidity B profitabilitv C solvency D risk 28 Zendejas Company purchased a ruler for 200 The ruler is expected to last for ten years Tony the accountant expensed the cost of the ruler in the year of the purchase Which constraint has Tony taken into account when making his accounting decision A Conservatism B Faithful Representation C Neutrality D Materiality 29 Allowing only designated personnel to handle cash receipts is an example of A establishment of responsibility B segregation of duties C documentation procedures D independent internal verification 30 Internal control is de ned in part as a plan that safeguards A all balance sheet accounts B assets C liabilities D capital stock 31 An application of good internal control over cash disbursements is A following Davment thimnroved invoice should be stamped PAID B blank checks should be stored in the treasurer39s desk C each check should be compared with the approved invoice after the check is issued D check signers should record the cash disbursements 32 Horizontal analysis evaluates a series of financial statement data over a period of time A that has been arranged from the highest number to the lowest number B that has been arranged from the lowest number to the highest number C to determine which items are in error D to determine the amount andor percentage increase or decrease that has taken place Use the following to answer questions 3339 The following information pertains to Soho Company Assume that all balance sheet amounts represent both average and ending balance figures Assume that all sales were on credit 33 What is the current ratio for this company A 142 B 80 C 116 D 60 34 What is the receivables turnover for this company A 28 times B 2 times C 34 times D 3 times 35 What is the inventory turnover for this company A 2 times B 225 times C 1 time D 44 times 36 What is the return on assets for this company A 68 B 105 C 117 D 267 37 What is the profit margin for this company A 4286 B 1875 C 235 D 150 38 What is the return on common stockholders39 equity for this company A 133 B 5 C 233 D 533 39 What is the priceearnings ratio for this company A 6 times B 25 times C 8 times D 4 times 40 Which one of the following is primarily interested in the liquidity of a company A Federal government B Stockholders C Longterm creditors D Shortterm creditors 41 Stockholders are most interested in evaluating A liquidity and solvency B pro tability and solvencv C liquidity and profitability D marketability and solvency 42 Vertical analysis is also known as A perpendicular analysis B common size analysis C trend analysis D straightline analysis 43 A general rule to use in assessing the average collection period is that A it should not exceed 30 days B it can be any length as long as the customer continues to buy merchandise C it should not greatly exceed the discount period D it should not greatly exceed the credit term period
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