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Accounting Final Exam With Complete Solutions And Correct Answers Latest Version
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Accounting Final Exam With Complete Solutions And Correct Answers Latest Version
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Accounting Final Exam With CompleteSolutions And Correct Answers Latest
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1. When a payable or an accrued expense increases, what happens on the cash flow statement and
where? Answer: Cash flow increases because liabilities increased as well. It is an operating expense
2. Where is the accounting equation presented in the financial statements? Answer: Balance Sheet
3. Is a purchase of treasury stock an investing or a financing activity? Answer: Financing
4. On an indirect cash flow statement when unearned fees go down, what happens on the statement
and where? Answer: 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? Answer: 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? Answer:
X*5%=5000 . 100,000
open excel
What is the current ratio? Answer: current assets/current liabilities
Cash + AR+Inventory / AP+WP+TP
2024
, 100+200+600/215+90+75
open excel
What is the return on sales ratio? Answer: net income/sales
1050000/6000000
open excel
What is the debt to equity ratio? Answer: 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? Answer: 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. Answer: 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? Answer: 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? Answer: 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? Answer: X+520-
500-450=420. X=850
2024
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