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Accounting Final Exam questions with actual answers 100%.
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Accounting Final Exam questions withactual answers 100%.
1. When a payable or an accrued expense increases, what happens on the cash flow statement and
where? ANS - Cash flow increases because liabilities increased as well. It is an operating expense
2. Where is the accounting equation presented in the financial statements? ANS - Balance Sheet
3. Is a purchase of treasury stock an investing or a financing activity? ANS - Financing
4. On an indirect cash flow statement when unearned fees go down, what happens on the statement
and where? ANS - It's a liability that went down so cash flow went down. Operating
5. A building with $400,000 as it cost and having accumulated depreciation of $200,000 is sold for
$250,000, what happens on the cash flow statement and where? ANS - 250(the proceeds)-(400-
200=net income)=50,000 Gain. The proceeds 250 go in as an increasing cash flow in investing. Operating
cash flow went down 50.
6. Joe made an investment that yielded $5,000 at 5% for one year. How much did he invest? ANS -
X*5%=5000 . 100,000
open excel
What is the current ratio? ANS - current assets/current liabilities
Cash + AR+Inventory / AP+WP+TP
100+200+600/215+90+75
open excel
What is the return on sales ratio? ANS - net income/sales
, 1050000/6000000
open excel
What is the debt to equity ratio? ANS - All liabilities/ equity
10. Beginning retained earnings was $1,000,000 and was increased by net income of $300,000. If the
ending balance was $700,000 how much in dividends were paid during the year? ANS - 1,000,000 +
300,000 - x = 700,000. Solve for x
11. Net income was $200,000. Depreciation was $40,000, A/R went down by $10,000 and wages payable
went up by $50,000. How much was cash flow for the year. ANS - 200+40+10+50=300
12. Tom and Jerry are partners. Someone eslse is here(Richard doesn't get salariy) Net income for the
partnership for the year was $100,000 and salaries were $20,000 and $15,000 for the cat and the
mouse, respectively. What was Jerry's share? ANS - 100,000-20,000-15,000=65,000 divide by two=32.5
then add salaries. Jerry had 15,000 salaries. 32,500+15,000= 47,500
13. Debt is $200,000 and equity is $100,000. The cost of capital for the debt is 6% and is 20% for the
equity. What is the weighted average cost of capital? ANS - 200,000*.06=12,000 . 100,000*.02=20,000.
12,000+20,000=32,000/300,000=10.7%
14. Cash flow from operations is (500,000) and cash flow from financing and investing are 520,000 and
(450,000). Ending cash balance is $420,000. What was the beginning cash balance? ANS - X+520-500-
450=420. X=850
15. Prior year adjustment is $60,000 and the tax rate is 30%..What was the beginning balance
adjustment to Retained Earnings for this year? ANS - 60,000*.7=42,000
16. Does classification of debt as short term and long term affect the cash flow statement ANS - no, its
all financing
17. Equipment was bought FOB shipping point for $250,000. Freight cost was $3,000, installation was
$10,000. Somebody caused damage to the machine while making parts three weeks after installation
and repairs cost $50,000. What is the total cost assigned to the equipment? ANS - 250+3+10=263
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