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1. ACC 290 Final Exam Guide (New, 2019, 100% Score) For more classes visit www.snaptutorial.com Question 1 The best definition of assets is the collections of resources belonging to the company and the claims on these resources. cash owned by the company. owners’ investment in the business. resources belonging to a company that have future benefit to the company.

2. Question 2 Which of the following is not a liability? Accounts Payable Accounts Receivable Interest Payable Unearned Service Revenue Question 3 Which of the following financial statements is divided into major categories of operating, investing, and financing activities? The statement of cash flows. The income statement. The balance sheet.

3. The retained earnings statement. Question 4 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. Question 5 Which of the following is not an advantage of the corporate form of business organization?

4. No personal liability Easy to raise funds Easy to transfer ownership Favorable tax treatment Question 6 An advantage of the corporate form of business is that it is simple to establish. it has limited life. its owner’s personal resources are at stake. its ownership is easily transferable via the sale of shares of stock Question 7

5. A small neighborhood barber shop that is operated by its owner would likely be organized as a proprietorship. partnership. joint venture. corporation. Question 8 If services are rendered for cash, then stockholders’ equity will decrease. liabilities will increase. liabilities will decrease.

6. assets will increase. Question 9 A revenue generally increases assets and stockholders’ equity. increases assets and liabilities. increases assets and decreases stockholders’ equity. leaves total assets unchanged. Question 10 A revenue account has a normal balance of a debit. is decreased by credits.

7. is increased by credits. is increased by debits. Question 11 Which accounts normally have debit balances? Assets, expenses, and dividends Assets, expenses, and revenues Assets, expense, and retained earnings Assets, liabilities, and dividends Question 12 In recording an accounting transaction in a double-entry system

8. the number of debit accounts must equal the number of credit accounts. there must only be two accounts affected by any transaction. 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. Question 13 The usual sequence of steps in the transaction recording process is journalize, analyze, post to the ledger. post to the ledger, journalize, analyze. analyze, journalize, post to the ledger. journalize, post to the ledger, analyze.

9. Question 14 Under the expense recognition principle expenses are recognized when they contribute to the production of revenue. they are billed by the supplier. they are paid. the invoice is received. Question 15 The revenue recognition principle dictates that revenue should be recognized in the accounting records:

10. in the period that income taxes are paid. when cash is received. when the performance obligation is satisfied. at the end of the month. Question 16 Merchandising companies that sell to retailers are known as brokers. corporations. wholesalers. service firms. Question 17

11. Gross profit equals the difference between sales revenue and cost of goods sold. sales revenue and operating expenses. net income and operating expenses. sales revenue and cost of goods sold plus operating expenses Question 18 Net income will result if gross profit exceeds purchases. cost of goods sold. operating expenses.

12. cost of goods sold plus operating expenses. Question 19 Under the perpetual system, cash freight costs incurred by the buyer for the transporting of goods is recorded in which account? Freight-In Inventory Freight Expense Freight-Out Question 20 Financial information is presented below: Operating expenses $ 25000 Sales revenue 175000 Cost of goods sold 125000

13. The profit margin ratio would be Question 21 Financial information is presented below: Operating expenses $ 31000 Sales returns and allowances 6000 Sales discounts 5000 Sales revenue 180000 Cost of goods sold 87000 The gross profit rate would be Question 22

14. Financial information is presented below: Operating expenses $ 54000 Sales returns and allowances 5000 Sales discounts 5000 Sales revenue 206000 Cost of goods sold 109000 Gross Profit would be $102000. $92000. $97000. $87000

15. Question 23 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. Question 24 Which of the following statements is correct with respect to inventories? FIFO seldom coincides with the actual physical flow of inventory. The FIFO method assumes that the costs of the earliest goods acquired are the last to be sold.

16. It is generally good business management to sell the most recently acquired goods first. Under FIFO, the ending inventory is based on the latest units purchased. Question 25 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.

17. Question 26 Each of the following is a feature of internal control except recording of all transactions. bonding of employees. an extensive marketing plan. separation of duties. Question 27 For which of the following errors should the appropriate amount be subtracted from the balance per books on a bank reconciliation? Check written for $95, but recorded by the company as $59

18. Deposit of $500 recorded by the bank as $50. Check written for $53, but recorded by the company as $35. A returned $200 check recorded by the bank as $20. Question 28 A check written by the company for $126 is incorrectly recorded by a company as $162. On the bank reconciliation, the $36 error should be deducted from the balance per books. added to the balance per bank. added to the balance per books. deducted from the balance per bank. Question 29

19. The following information was available for Blossom Company at December 31, 2017: beginning inventory $93000; ending inventory $146000; cost of goods sold $676000; and sales $824000. Blossom inventory turnover ratio (rounded) in 2017 was 7.3 times. 4.6 times. 6.9 times. 5.7 times. Question 30 The following information was available for Sheridan Company at December 31, 2017: beginning inventory $80000; ending inventory $132000; cost of goods sold $644000; and sales $816000. Sheridan days in inventory (rounded) in 2017 was 47.4 days. 45.1 days. 59.8 days.

20. 74.5 days. ************************************************ ACC 290 Week 1 Apply: Connect® Exercise For more classes visit www.snaptutorial.com ACC 290 Week 1 Apply: Connect® Exercise Review the Knowledge Check in preparation for this assignment. Complete the Week 1 Exercise in Connect®. Note: You have only one attempt available to complete this assignment.

21. Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after your due date. The form of a business organization that is not affected by the withdrawal or death of an owner and can continue indefinitely is the Multiple Choice corporation. sole proprietorship. nonprofit organization. partnership. When the owner invests equipment in a business, Multiple Choice assets increase and owner’s equity decreases.

22. assets and owner’s equity increase. assets and revenue increase. liabilities decrease and owner’s equity increases. The Statement of Owner’s Equity is calculated as follows: Multiple Choice beginning capital + net income + withdrawals + additional investments = ending capital beginning capital + net loss − withdrawals + additional investments = ending capital beginning capital + net income − withdrawals + additional investments = ending capital beginning capital + net loss + withdrawals + additional investments = ending capital

23. The Financial Accounting Standards Board is responsible for Multiple Choice auditing financial statements. developing generally accepted accounting principles. establishing accounting systems for businesses. making recommendations to the Securities and Exchange Commission. The Balance Sheet heading includes each of the following except: Multiple Choice firm’s name. title of the report.

24. date of the report. firm’s address. Tax planning includes Multiple Choice auditing tax returns. correcting tax returns. preparing tax returns. suggesting actions to reduce tax liability. Which of the following equations is the Fundamental Accounting Equation?

25. Multiple Choice Assets – Liabilities = Owner’s Equity Assets – Owner’s Equity = Liabilities Assets + Liabilities = Owner’s Equity Assets = Liabilities + Owner’s Equity Tax accounting involves tax compliance and Multiple Choice tax configuration. tax planning.

26. tax obfuscation. tax evaluation. Amounts that a business must pay in the future are known as: Multiple Choice capital. liabilities. assets. expenses. Identify the form of business that is considered a separate legal entity. Multiple Choice

27. a limited liability partnership a sole proprietorship a partnership a corporation Which of the following is NOT a service of public accounting firms? Multiple Choice management advisory services auditing investment services tax accounting

28. Which financial statement is reported as of a specific date? Multiple Choice Income Statement Statement of Changes in Financial Position Balance Sheet Statement of Owner’s Equity Identify the type of accounts that would appear on a firm’s income statement Multiple Choice revenues and expenses. liabilities and expenses.

29. assets and liabilities. assets and revenues. A company issues periodic reports called Multiple Choice summaries. financial statements. tax returns. audits. Managerial accounting is Multiple Choice

30. private accounting. government accounting. tax accounting. public accounting. Which of the following is NOT an area in which accountants usually practice? Multiple Choice Public Accounting Governmental Accounting Industrial Accounting

31. Managerial (Private) Accounting All financial statements submitted to the SEC by publicly owned corporations must include an auditor’s report prepared by Multiple Choice an independent certified public accountant. anyone in the accounting department. the firm’s managerial accountant. an internal auditor. The group of accounting educators who offer their opinions about proposed FASB statements, after research has been done to determine the possible effects on financial reporting and the economy, is Multiple Choice

32. the FCC. the AICPA. the SEC. the AAA. If the income statement covered a six-month period ending on November 30, 2019, the third line of the income statement heading would read: Multiple Choice Month Ended November 30, 2019. November 30, 2019. Six-month Period Ended November 30, 2019. Month of November, 2019.

33. Which of the following is an example of an expense: Multiple Choice an owner withdrawal for personal use. the receipt of cash from a credit customer. the payment of a creditor on account. the payment of the monthly utility bill. Which financial statement is a representation of the accounting equation? Multiple Choice Balance Sheet Income Statement

34. Statement of Owner’s Equity Profit and Loss Statement Which of the following is NOT a type of information communicated by the financial statements? Multiple Choice how much the business owes others what types of assets business owns how long the business has been in operation whether or not the business is profitable When the owner writes a company check to pay the company’s electric bill,

35. Multiple Choice expenses increase and owner’s equity increases. assets and owner’s equity decrease. assets and liabilities decrease. assets and owner’s equity increase. The rent paid for future months is a(n): Multiple Choice liability. expense. revenue.

36. asset. When the owner withdraws cash for personal use, Multiple Choice assets decrease and owner’s equity increases. owner’s equity decreases and revenue decreases. assets decrease and owner’s equity decreases. assets decrease and expenses increase. Choose the option below that reflects the correct order in which to prepare the three financial statements Multiple Choice Income Statement; Statement of Owner’s Equity; Balance Sheet.

37. Balance Sheet; Income Statement; Statement of Owner’s Equity. Income Statement; Balance Sheet; Statement of Owner’s Equity. Statement of Owner’s Equity; Balance Sheet; Income Statement. Revenue by definition is: Multiple Choice an amount a business must pay in the future. the payment of amounts owed to creditors. amounts earned from the sale of goods or services. the collection of amounts owed by customers.

38. Owners are not personally responsible for the debts of the business if the form of business organization is a Multiple Choice partnership. sole proprietorship. corporation. nonprofit organization. The financial activities of a business and the financial activities of the owners should be Multiple Choice combined in the firm’s accounting records. combined only if the owner wants them to be.

39. reported in different parts of the firm’s accounting records. kept totally and completely separate. Managerial accountants usually do which of the following? Multiple Choice audit financial statements prepare and audit tax returns investigate companies for possible violations of law prepare internal reports for management The area of accounting that involves the preparation of internal reports for a firm’s executives and the analysis of the data in these reports to aid in decision making is known as

40. Multiple Choice financial accounting. managerial accounting. auditing. cost accounting. Which of the following is a true statement in regards to the International Accounting Standards Board? Multiple Choice The IASB deals with issues caused by the lack of uniform accounting principles existing in different countries The IASB was created by the American Accounting Association

41. The IASB develops all accounting principles to be used in the United States The IASB has the authority to audit financial statements of all US corporations Which of the following equations is the Fundamental Accounting Equation? Multiple Choice Assets + Liabilities = Owner’s Equity Assets – Owner’s Equity = Liabilities Assets = Liabilities + Owner’s Equity Assets – Liabilities = Owner’s Equity

42. Examples of assets are: Multiple Choice cash and accounts receivable. equipment and revenue. accounts receivable and rent expense. investments by the owner and revenue. The statement of financial position is another term for which financial statement? Multiple Choice Income Statement Statement of Owner’s Equity

43. Balance Sheet Trial Balance An Income Statement is all of the following except: Multiple Choice a formal report of business operations. a profit and loss statement. a statement of revenues less withdrawals and expenses. a statement of income and expenses.

44. ************************************************ ACC 290 Week 1 Assignment Preparing an Income Statement Retained Earnings Statement and Balance Sheet For more classes visit www.snaptutorial.com Purpose of Assignment The purpose of this assignment is to help students become familiar with the presentation of the income statement and the retained earnings statement, including how parts of the financial statement is evaluated to determine the operational success of the business. Assignment Steps Resources: Financial Accounting: Tools for Business Decision Making p. 36

45. Scenario: On June 1, 2017, Elite Service Co. was started with an initial investment in the company of $22,100 cash. Below are the assets, liabilities, and common stock of the company June 30, 2017, and the revenues and expenses for the month of June, its first month of operations: Cash $ 4,600 Notes payable $12,000 Accounts receivable 4,000 Accounts payable 500 Service revenue 7,500 Supplies expense 1,000 Supplies 2,400 Maintenance and repairs expense 600 Advertising expense 400 Utilities expense 300 Equipment 26,000 Salaries and wages expense 1,400 Common stock 22,100 In June, the company issues no additional stock but paid dividends of $1,400. Prepare an income statement retained earnings statement and balance sheet analyzing your findings using the questions below in a total of 1050 words: • Briefly address whether the company’s first month of operations was a success. • Discuss the company’s decision to distribute a dividend. Use the Excel® spreadsheet to show your work and submit it with your analysis. Click the Assignment Files tab to submit your assignment. ************************************************ ACC 290 Week 1 Discussion Question 1

46. For more classes visit www.snaptutorial.com ACC 290 Week One - DQ #1 What are the four basic financial statements? What is the primary purpose of each of the four basic financial statements? In your opinion, which financial statement is the most important? Explain why. How would the financial statements be useful to managers and employees? How would the financial statements be useful to investors and creditors? ************************************************ ACC 290 Week 1 Discussion Question 2 For more classes visit www.snaptutorial.com What are debits and credits? How are debits and credits used to record business transactions? Why do accountants debit asset accounts

47. to increase them but credit liability accounts to increase them? Why do accountants debit expenses to increase them but credit revenues to increase them? ************************************************ ACC 290 Week 1 Individual Assignment Financial Statements Paper For more classes visit www.snaptutorial.com Individual - Financial Statements Paper - Prepare a 700 -1,050 word paper in which you identify the four basic financial statements. Describe the purpose of each of the four financial statements. Discuss how the financial statements would be useful to internal users, such as to managers and employees. Discuss how the financial statements would be useful to external users, such as investors and creditors. Format paper according to APA standards.

48. ************************************************ ACC 290 Week 1 Practice: Connect® Knowledge Check For more classes visit www.snaptutorial.com ACC 290 Week 1 Practice: Connect® Knowledge Check Complete the Week 1 Knowledge Check in Connect®. Note: You have unlimited attempts available to complete this practice assignment. The highest scored attempt will be recorded. These assignments have earlier due dates, so plan accordingly. Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after your due date. The form of a business organization that is not affected by the withdrawal or death of an owner and can continue indefinitely is the

49. Multiple Choice corporation. sole proprietorship. nonprofit organization. partnership. When the owner invests equipment in a business, Multiple Choice assets increase and owner’s equity decreases. assets and owner’s equity increase. assets and revenue increase. liabilities decrease and owner’s equity increases. The Statement of Owner’s Equity is calculated as follows: Multiple Choice beginning capital + net income + withdrawals + additional investments = ending capital beginning capital + net loss − withdrawals + additional investments = ending capital beginning capital + net income − withdrawals + additional investments = ending capital

50. beginning capital + net loss + withdrawals + additional investments = ending capital The Financial Accounting Standards Board is responsible for Multiple Choice auditing financial statements. developing generally accepted accounting principles. establishing accounting systems for businesses. making recommendations to the Securities and Exchange Commission. The Balance Sheet heading includes each of the following except: Multiple Choice firm’s name. title of the report. date of the report. firm’s address. Tax planning includes Multiple Choice auditing tax returns. correcting tax returns.