ACC290 Final Exam (30 Questions with Answers) 100%Correct
1) Which financial statement is used to determine cashgenerated from operations?
A. Income statement
B. Statement of operations
C. Statement of cash flows
D. Retained earnings statement
2) In terms of sequence, in what order must the four basicfinancial statements be prepared?
A. Balance sheet, income statement, statement of cash flows,and capital statement
B. Income statement, capital statement, statement of cashflows, and balance sheet
C. Balance sheet, capital statement, statement of cash flows,and income statement
D. Income statement, capital statement, balance sheet, andstatement of cash flows
3. In classifying transactions, which of the following istrue in regard to assets?
A. Normal balances and increases are debits
B. Normal balances and decreases are credits
C. Normal balances can either be debits or credits forassets
D. Normal balances are debits and increases can be debits orcredits
4. An increase in an expense account must be
A. debited
B. credited
C. either debited or credited, depending on thecircumstances
D. capitalized
5. ABC Corporation issues 100 shares of $1 par common stockat $5 per share, which of the following is the correct journalentry?
C. Correct ANSWER (Go with this Option)
17. Net income is recorded on the work sheet underthe
A. debit column of the adjusted trial balance and the creditcolumn of retained earnings
B. debit column of the income statement and the credit columnof the balance sheet
C. credit column of the adjusted trial balance and the debitcolumn of retained earnings
D. credit column of the income statement and the debit columnof the balance sheet
18. At the beginning of the year, Uptown Athletic had aninventory of $400,000. During the year, the company purchased goodscosting $1,500,000. If Uptown Athletic reported ending inventory of$600,000 and sales of $2,000,000, their cost of goods sold andgross profit rate would be
A. $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 inventorydecreased by $30,000. If the company’s cost of goods sold for theyear was $450,000, purchases would have been
A. $480,000
B. $420,000
C. $390,000
D. Insufficient data to determine
20. At the beginning of the year, Wildcat Athletic had aninventory of $200,000. During the year, the company purchased goodscosting $700,000. If Wildcat Athletic reported ending inventory of$300,000 and sales of $1,000,000, their cost of goods sold andgross profit rate would be
A. $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 a
A. debit to Sales Discount for $18
B. debit to Sales Revenue for $882
C. credit to Accounts Receivable for $900
D. credit to Sales Revenue for $900
22.Dobler Company uses a periodic inventory system. Detailsfor the inventory account for the month of January 2012 are asfollows:
An end of the month (1/31/2012), inventory showed that 140units were on hand. If the company uses LIFO, what is the value ofthe ending inventory?
A. $737
B. $700
C. $762
D. $1,380
23. The difference between ending inventory using LIFO andending inventory using FIFO is referred to as
A. FIFO reserve
B. inventory reserve
C. LIFO reserve
D. periodic reserve
24. A consistent application of an inventory costing methodenhances
A. conservatism
B. accuracy
C. comparability
D. efficiency
25. The accountant at Patton Company has determined thatincome before income taxes amounted to $11,000 using the FIFOcosting assumption. If the income tax rate is 30% and the amount ofincome taxes paid would be $300 greater if the LIFO assumption wereused, what would be the amount of income before taxes under theLIFO assumption?
A. $11,300
B. $12,000
C. $10,000
D. $10,700
26. A very small company would have the most difficulty inimplementing which of the following internal controlactivities?
A. Separation of duties
B. Limited access to assets
C. Periodic independent verification
D. Sound personnel procedures
27. A system of internal control
A. is infallible
B. can be rendered ineffective by employeecollusion
C. invariably will have costs exceeding benefits
D. is premised on the concept of absoluteassurance
28. The custodian of a company asset should
A. have access to the accounting record for thatasset
B. be someone outside the company
C. not have access to the accounting record for thatasset
D. be an accountant
29. The Sarbanes Oxley Act (2002) applies to
A. U.S. companies but not international companies
B. international companies but not U.S. companies
C. U.S. and Canadian companies but not other internationalcompanies
D. U.S. and international companies
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