ACC 210 Final Exam

Shows the relationships among assets, liabilities, and owner's equity

A balance sheet

Adjusting entries usually affect

A balance sheet and an income statement account.

Which of the following is an example of a real or permanent account? A. Accounts Payable B. Dividends C. Loss on Sale of Land D. Interest Revenue E. Rent Expense

A. Accounts Payable

If a bond is sold at a discount, the carrying value of the bond:

A. Increases with every interest payment

. West Inc. loaned $10,000 on December 1, 20X0 to an employee at 7%. The loan plus interest will be repaid in one year. The December 31, 20X0 adjusting journal entry for West is an example of a(an): A. Accrued expense. B. Accrued revenue. C. Deferred expense. D. Deferred revenue

Accrued revenue; will be getting repayed loan + interest later

When preparing a bank reconciliation, interest paid by the bank on the checking account is: A. Added to the balance per the books. B. Added to the balance per the bank. C. Subtracted from the balance per the books. D. Subtracted from the balance per the bank.

Added to the balance per the books. ; Interest paid by the bank to the checking account is added because it becomes part of the company's assets.

Adjusted vs unadjusted trial balance

An unadjusted trial balance is prepared before the adjusting journal entries are made, while an adjusted trial balance is prepared after adjusting journal entries have been recorded.

the economic resources of a company, resulting from past transactions or events

Assets

When are adjusting journal entries generally made? A. After taking a post-closing trial balance. B. At year-end before the financial statements are prepared. C. At year-end after the financial statements are prepared. D. After closing journal entries are made

At year-end before the financial statements are prepared.

. Accumulated depreciation: A. is a contra liability account. B. is a contra asset account. C. is an expense account. D. is a contra equity account

B. is a contra asset account. ; Accumulated depreciation reduces assets on a company's books

Which of the following accounts has a normal credit balance: A. Interest Receivable B. Treasury Stock C. Sales Returns and Allowances D. Additional Paid-in Capital E. Payroll Tax Expense

D. Additional Paid-in Capital

On April 1, 20X0, Red and White, Inc. paid an insurance premium of $1,800 for a one-year policy. At the end of 20X0, the financial statements for 20X0 should report: A. Prepaid insurance $0; Insurance expense $1,800 B. Prepaid insurance $900; Insurance expense $900 C. Prepaid insurance $1,350; Insurance expense $450 D. Prepaid insurance $450; Insurance expense $1,350 E. Prepaid insurance $1,800; Insurance expense $0

D. Prepaid insurance $450; Insurance expense $1,350

Which of the following is a contra-revenue account? A. Sales Revenue B. Accumulated Depreciation C. Allowance for Uncollectible Accounts D. Sales Discounts E. Cost of Goods Sold

D. Sales Discounts

Which of the following is a contra-revenue account? A. Sales Revenue B. Accumulated Depreciation C. Allowance for Uncollectible Accounts D. Sales Returns & Allowances E. Cost of Goods Sold

D. Sales Returns & Allowances

The employees of Kinston and Elisabeth Inc. get paid every Friday for a 5-day workweek (M-F). The employees earn $5,000 per day. If the accounting period ends on Monday, and the proper adjusting journal entry is made on Monday, what will be the affect on the company's financial statements?

D. The balance sheet will report wages payable of $5,000. ; Since the adjusting entry is made on Monday, the $5,000 amount that would be paid out for Monday's work will not be paid until Friday and thus will become a payable.

The adjusting journal entry to record the depreciation expense on equipment includes a:

Debit to appreciation expense and credit to accumulated depreciation

Distributions of assets (for example, cash) to owners' would be classified as a(an)

Dividend.

Which of the following accounts will not appear on a post-closing trial balance? A. Dividends B. Retained Earnings C. Dividends Payable D. Accounts Payable

Dividends; it is a temporary account and is closed to 0

Which of the following is an example of a nominal or temporary account? A. Accumulated Depreciation B. Prepaid Insurance C. Supplies Inventory D. Unearned Rent Revenue E. Gain on Sale of Machinery

E. Gain on Sale of Machinery

Smith Inc. has a May 1, 20X0 balance of supplies of $600. During May, the company purchased $1,000 of supplies. On May 31, the supplies were counted, and it was determined that $400 of supplies are on hand. After the necessary adjustments, what will the May 31, 20X0, balance sheet report? A. Supplies Expense $1,000 B. Supplies $1,000 C. Supplies Expense $1,200 D. Supplies $1,200 E. Supplies $400

E. Supplies $400 ; The balance sheet should reflect the inventory on hand on that certain date

The accounting assumption that requires a company to keep its accounting records separate from the records of its owners is called the

Economic entity assumption

The primary organization that establishes financial accounting reporting standards for U.S. based companies is the:

Financial Accounting Standards Board

The sale of stock to investors for $50,000 cash would: A. Increase cash by a debit. B. Increase cash by a credit. C. Increase retained earnings by a credit. D. Increase contributed capital by a debit.

In exchange for the sale of stock, the company would receive cash and thus would debit their cash account for $50,000.

Which principle governs the necessity to estimate warranty expenses? A. Historical cost B. Revenue recognition C. Consistency D. Matching principle

Matching; we must estimate warranty expense in the year of the sale

The purchase of two years worth of fire insurance on a factory building in exchange for cash would initially be reflected on the financial statements as a(an):

Prepaid expense

The Securities and Exchange Commission (SEC) has been granted the authority to require audited annual financial reports for:

Publicly-held corporations.

Which of the following types of accounts are closed to Retained Earnings at the end of an accounting period?

Revenue and expense accounts (net income)

Which of the following is not a step in the accounting cycle? A. Analyzing transactions and business documents. B. Journalizing and posting closing entries. C. Preparing financial statements. D. Selling goods or providing services.

Selling goods or providing services.

When a bond sells above the face value:

The coupon rate is greater than the market rate. PREMIUM

When using the perpetual inventory method

The current inventory balance is always known.

An impairment of a long-term asset (e.g., equipment) is indicated if book value exceeds:

c. Future cash flows.