ACC 280 Final Exam (7th Set) 30 Questions.doc
ACC 280 Final Exam (7th Set) 30 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 The SEC and FASB are two organizations that are primarily responsible for establishing generally accepted accounting principles It is true that the SEC is a private organization of accountants the SEC often mwtes guidelines when no accounting principles exisi the SEC and FASB rarely cooperate in developing accounting standards they are both governmental agencies PCP 2 Auditing is A a part of accounting that involves only recording of economic events B an area of accounting that involves such activities as cost accounting budgeting and accounting information systems C conducted by the Securities and Exchange Commission to ensure that registered financial statements are presented fairly D the examination of financial statements bv a CPA in order to express an opinion on their fairness 3 All of the financial statements are for a period of time except the retained earnings balance sheet statement of cash ows PCP income statement 4 Which of the following statements is not true A Expenses have normal debit balances B Expenses decrease stockholders39 equity C Expenses are a negative factor in the computation of net income D Expenses increase stockholders39 eauitv 5 An account will have a credit balance if the A first transaction entered was a credit B debits exceed the credits C last transaction entered was a credit D credits exceed the debits 6 The first step in the recording process is to A prepare a trial balance B post to a journal C analyze each transaction for its effect on the accounts D prepare financial statements 7 If a company has overdrawn its bank balance then A the cash account debits will exceed the cash account credits B its cash account will show a credit balance Cit cannot be detected by observing the balance of the cash account D its cash account will show a debit balance 8 Posting A involves transferring all debits and credits on a journal page to the trial balance Mccumulgtes the effects of iournalized transactions in the individualaccounts Cis accomplished by examining ledger accounts and seeing which ones need updating D should be performed in account number order 9 The dividends account Ais increased with debits and decreased with credits B must show transactions every accounting period Cis not a proper subdivision of stockholders39 equity D appears on the income statement along with the expenses of the business 10 After journal entries are posted the reference column A of the general journal will show quotDrquot or quotCrquot B of the general ledger will show iournal page numbers C of the general ledger will show account numbers D of the general journal will be blank 11 The procedure of transferring journal entries to the ledger accounts is called A reporting B analyzing C posting D journalizing Posting of journal entries should be done in A chronological order B alphabetical order C dollar amount order D account number order 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 63009 70000 Prepaid insurance 12month policy 6000 Rent expense 17000 Salaries expense 32000 Service revenue 133000 Supplies 4000 Supplies expense 6000 Equipment 210000 12 What is the company s net income for the year ending December 31 2008 a 133000 b 42000 c 28000 1 12000 13 What is the total that would be reported for stockholders39 equity at December 31 2008 a 102000 b 130000 c 144000 1 158000 14 The formula for horizontal analysis of changes since the base period is the current year amount a divided by the base year amount b minus the base year amount divided bv the base vear amount c minus the base year amount divided by the current year amount 1 plus the base year amount divided by the base year amount 15 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 16 Demaet Cruise Lines purchased a veyear insurance policy for its ships on April 1 2008 for 100000 Assuming that April 1 is the effective date of the policy the adjusting entry on December 31 2008 is a Prepaid Insurance 15000 Insurance Expense 15 000 b Insurance Expense 15000 Prepaid Insurance 15000 0 Insurance Expense 20000 Prepaid Insurance 20000 1 Insurance Expense 5000 Prepaid Insurance 5 000 17 If a check correctly written and paid by the bank for 428 is incorrectly recorded on the company39s books for 482 the appropriate treatment on the bank reconciliation would be to a add 54 to the bank39s balance b add 54 to the book39s bz lnce c deduct 54 from the bank39s balance 1 deduct 428 from the book39s balance 18 Luthor Corporation had net income of 160000 and paid dividends to common stockholders of 40000 in 2008 The weighted average number of shares outstanding in 2008 was 50000 shares Luthor Corporation39s common stock is selling for 50 per share on the New York Stock Exchange Luthor Corporation39s priceearnings ratio is a 32 times b 156 times 0 10 times 1 5 times 19 A trial balance will not balance if a a journal entry is posted twice b a wrong amount is used in iournalizing c incorrect account titles are used in journalizing d a journal entry is only partially posted 20 The going concern assumption assumes that the business a will be liquidated in the near future b will be purchased by another business c is in a growth industry 1 will continue in operation long enough to carry out its existing obiectives and commitments 21 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 137 000 d 142000 22 The accounting equation for Goodboys Enterprises is as follows Assets Liabilities Stockholders39 Equity 120000 60000 60000 If Goodboys purchases office equipment on account for 12000 the accounting equation will change to Assets Liabilities Stockholders39 Equity a 120000 60000 60000 b 132000 60000 72000 0 132000 66000 66000 1 132000 72000 60000 23 Having one person post entries to accounts receivable subsidiary ledger and a different person post to the Accounts Receivable Control account in the general ledger is an example of a inadequate internal control b duplication of effort 0 external verification d segregation of duties Use the following information for questions 24 Moon Beam Inc has the following income statement in millions MOON BEAM INC Income Statement For the Year Ended December 31 2008 Net Sales 180 Cost of Goods Sold 120 Gross Pro t 60 Operating Expenses 33 Net Income 27 24 Using vertical analysis what percentage is assigned to Cost of Goods Sold a 67 b 33 c 100 1 None of the above 25 Each of the following is an example of an unexpired cost except a merchandise inventory b plant assets 0 prepaid expenses d repairs 26 The net income or loss for the period a is found by computing the difference between the income statement credit column and the balance sheet credit column on the worksheet b cannot be found on the worksheet c is found bv computinglhe difference between the income statement columns of the worksheet d is found by computing the difference between the trial balance totals and the adjusted trial balance totals 27 The accounting process is correctly sequenced as a identification communication recording b recording communication identification c identification recording communication 1 communication recording identification 28 Sue Smiley has performed 500 of CPA services for a client but has not billed the client as of the end of the accounting period What adjusting entry must Sue make a Debit Cash and credit Unearned Revenue b Debit Accounts Receivable and credit Unearned Revenue c Debit Accounts Receivable and credit Service Revenue 1 Debit Unearned Revenue and credit Service Revenue 29 Generally accepted accounting principles are a income tax regulations of the Internal Revenue Service b standards Mt indicate how to report economic events c theories that are based on physical laws of the universe 1 principles that have been proven correct by academic researchers 30 James Company purchases 600 of equipment from Mundelein Inc for cash The effect on the components of the basic accounting equation of James Company is a an increase in assets and liabilities b a decrease in assets and liabilities c no change in total assets d an increase in assets and a decrease in liabilities Problem 1 The adjusted trial balance of Pool Financial Planners appears below Using the information from the adjusted trial balance you are to prepare for the month ending December 31 1 an income statement 2 a retained earnings statement 3 a balance sheet POOL FINANCIAL PLANNERS Adjusted Trial Balance December 31 2008 Debit Credit Cash 5400 Accounts Receivable 2200 Office Supplies 1800 Office Equipment 15000 Accumulated Depreciation Office Equipment Accounts Payable 3300 Unearned Revenue 6000 Common Stock 10000 Retained Earnings Jan 1 4400 4000 Dividends 2500 Service Revenue 4200 Office Supplies Expense 600 Depreciation Expense 2500 Rent Expense 1900 31900 31900 POOL FINANCIAL PLANNERS Income Statement For the Month Ending December 31 2008 Revenues Service revenue 4200 Expenses Office supplies expense 600 250 Depreciation expense 0 190 Rent expense 0 500 Total expenses 0 Net income 800 POOL FINANCIAL PLANNERS Retained Earnings Statement For the Month Ending December 31 2008 440 Retained earnings 0 Add Net income 800 Less Dividends Retained earnings August 3 1 3600 2500 110 POOL FINANCIAL PLANNERS Balance Sheet December 31 2008 Assets Accounts receivable Office Supplies Office equipment Less Accum Depreciation office equip 4000 Total assets Liabilities and Stockholders39 Equity Liabilities Accounts payable Unearned Service Revenue Total liabilities Stockholders39 equity 1000 Common stock 0 Retained earnings 4400 Total stockholders39 equity Total liabilities and stockholders39 equity 5400 2200 1800 15 000 2440 3300 6000 9300 14400 2370
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