ACC 101 Final Study Guide (Practice Problems) || A Verified
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What is an information system that provides reports to users regarding economic activities and
condition of a business> correct answers accounting
All of the following are general-purpose financial statements except:
a. balance sheet
b. retained earnings statement
c. cash budget
d. income statement correct answers c. cash budget
The following are examples of external users of financial information except:
a. customers
b. creditors
c. managers
d. government entities correct answers c. managers
Which of the terms below is not a business entity?
a. corporation
b. proprietorship
c. entrepreneurship
d. partnership correct answers d. partnership
Within the US, the dominant body in the primary development of accounting principles is the:
correct answers Financial Accounting Standards Board (FASB)
What concept relates to separating the reporting of business and personal economic transactions
correct answers business entity concept
Which of the following is not an asset?
a. cash
b. investments
c. stockholders' equity
d. inventory correct answers c. stockholders' equity
A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transacion
on the accounting equation was to correct answers decrease an asset, decrease a liability
The monetary value charged to customers for the performance of services sold is called a(n)
correct answers revenue
How does receiving a bill to be paid next month for services received affect the accounting
equation? correct answers assets increase, liabilities increase
,Gomez Service Company paid its first installment on a note payable in the amount of $2000.
How will this transaction affect the accounting equation? correct answers increase liabilities
(notes payable) and decrease assets (cash)
A financial statement user would determine if a company was profitable or not during a specific
period by reviewing the correct answers income statement
In what order are financial statements prepared in? correct answers Income Stmnt, Retained
Earnings Stmnt, Balance Sheet
Given the following data compute the ratio of liabilites to stockholders' equity for each year
(round 2 decimal places).
Total Liabilities: $128,250 (yr 2); $120,000 (yr 1)
Total SE: $95,000 (yr 2); $80,000 (yr 1) correct answers 1.35 and 1.50, respectively
The ending balance of retained earnings appears in: correct answers both the retained earnings
statement and the balance sheet
The debit side of an account is... correct answers the left side of the account
What is a listing of accounts in financial statement order? correct answers chart of accounts
What are records of increases and decreases in individual financial statement items? correct
answers accounts
A cash payment is recorded in the cash account as a: correct answers credit
Which are the parts of the T accounts correct answers title, debit side, credit side
Which group of accounts is comprised of only assets?
a. accounts receivable, revenue, cash
b. cash, accounts payable, buildings
c. unearned revenues, prepaid expenses, cash
d. prepaid expenses, buildings, patents correct answers d. prepaid expenses, buildings, patents
Which of the following statements is not true about liabilities?
a. liabilities are debts owed to outsiders
b. Liabilities don't include wages owed to employees
c. cash recieved before a service performed is a liability
d. account titles of liabilites include term "payable" correct answers b. liabilities don't include
wages owed to employees
The balance of an account is determined by: correct answers adding all debits, adding all credits,
and the subtracting the smaller sum from the larger
, Which of the following types of accounts have a normal credit balance? (DEAL,GIRLS)
a. liabilities and expenses
b. revenues and common stock
c. common stock and dividends
d. assets and liabilities correct answers b. revenues and common stock
The classification and normal balance of the accounts payable account is correct answers liability
w/ credit balance
The process of initially recording a business transaction is called: correct answers journalizing
Which of the following entries records the collection of cash from cash customers
a. fees earned, debit; cash, credit
b. cash, debit; fees earned, credit
c. accounts receivable, debit; fees earned, credit
d. fees earned, debit; accounts receivable, credit correct answers b. cash, debit; fees earned,
credit
A client has a massage and asks the company bookkeeper to mail her the bill. What entry should
the bookkeeper make to record the invoice? correct answers debit accounts receivable, credit fees
earned
Net income will result when:
a. revenues (credits) = expenses (debits)
b. revenues (debits) > expenses (credits)
c. expenses (credits) = revenues (credits)
d. revenues (credits) > expenses (debits) correct answers d. revenues (credits) > expenses (debits)
The process of transferring the debits and credits from the journal entries to the accounts is
called: correct answers posting
That the total dollar amount of the debits equals the total dollar amount of the credits in the
ledger accounts can be verified through a(n): correct answers trial balance
Which of the following groups of accounts are increased with a debit?
a. assets, dividends, expenses
b. assets liabilities, revenues
c. assets, liabilities, stockholders' equity
d. assets, revenues, expenses correct answers a. assets, dividends, expenses
Which of the following groups of accounts increase with a credit?
a. common stock, revenues, expenses
b. assets, common stock, revenues
c. liabilities, common stock, revenues
d. none of the above correct answers c. liabilities, common stock, revenues
