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ACG 2021 Exam 1 Practice Questions and Correct Answers
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  • ACG 2021
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  • ACG 2021

A business organized as a corporation - is considered to be a legal entity that is separate from its owners. The common characteristic possessed by all assets is that they are resources owned. Which of the following involves collecting funds from creditors? Financing Which of the following would...

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  • August 11, 2024
  • 6
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • acg 2021 exam 1 practice questions and correct ans
  • a business organized as a corporation is consid
  • the common characteristic possessed by all assets

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  • ACG 2021
  • ACG 2021

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ACG 2021 Exam 1 Practice Questions
and Correct Answers
A business organized as a corporation - ✅is considered to be a legal entity that is
separate from its owners.

The common characteristic possessed by all assets is that they ✅are resources
owned.

Which of the following involves collecting funds from creditors? ✅Financing

Which of the following would appear on a balance sheet? ✅Unearned revenue

Retained earnings at the end of the period is equal to which of the following?
✅Retained earnings in the beginning of the period plus net income minus dividends

A corporation began the year with retained earnings of $460,000.

During the year, it issued common stock for $840,000, incurred expenses of
$2,000,000, and declared and paid dividends of $50,000.

The ending retained earnings is $760,000. What was the revenue for the year?
✅$2,350,000

At the end of the year, a corporation has liabilities of $6,000 and equity of $2,000. How
much are the company's assets at the end of the year? ✅$8,000

Publicly traded US companies must provide shareholders with an annual report. Which
of the following is not part of the annual report? ✅General ledger

Which of the following is considered property, plant, and equipment on a classified
balance sheet? ✅Land

Determine the amount of current assets to be reported on the balance sheet.

Accounts Payable $160,000
Accounts Receivable $100,000
Accumulated depreciation $40,000
Buildings $210,000
Cash $130,000
Common stock $600,000
Inventory $110,000

, Land $180,000
Prepaid insurance $60,000
Retained earnings $130,000
Trademarks $140,000 ✅$400,000

(100,000 + 130,000 + 110,000 + 60,000)

A corporation had beginning retained earnings of $724,000 and ending retained
earnings of $833,000.

During the year, it issued common stock for $47,000 and declared and paid dividends of
$50,000.

What is its net income for the year? ✅$159,000

(833,000 - 724,000 + 50,000)

Alpha Inc.'s current ratio is 1.8

Omega Inc.'s current ratio is 1.6

Compared to Alpha Inc., Omega Inc. has - ✅Lower liquidity

Which of the following would increase a company's current ratio? ✅Negotiate with a
creditor to reclassify a note payable in three months into a note payable due in two
years.

A company reported $250,000 cash inflow provided by operating activities. Also, it
issued $40,000 of common stock, paid $70,000 for equipment, and paid $20,000 in
dividends. Shortly before year end, it paid a $50,000 note payable.

What is the free cash flow? ✅$160,000

(250,000 - 70,000 - 20,000)

The rules and practices that are recognized as general guides for financial reporting are
called - ✅Generally Accepted Accounting Principles (GAAP)

The primary objective of financial reporting is to provide financial information that is
useful. Which of the following is a characteristic of relevance? ✅Predictive value

The effects of paying rent for the month of the basic accounting equation are to -
✅Decrease assets and decrease stockholder's equitt

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