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ACG 2024- Final Exam Review Solved 100%
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ACG 2024- Final Exam Review Solved 100%
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ACG 2024- Final Exam Review Solved 100%A certain company debited prepaid insurance when it paid for a one-year insurance
policy. If the company does not record any year-end adjusting entries then - ANS-
stockholders' equity would be overstated.
A company can change to a new method of accounting if management can justify that
the new method results in - ANS-more meaningful financial information
A company using the same accounting principles and the same accounting methods
from one year to the next year is an application or example of - ANS-consistency
A company's gross profit rate is lower this year compared to the prior year. Which of the
following would not be a possible cause for this decline in the gross profit rate? - ANS-
the company began selling products with a higher markup
A promissory note will likely be used in all of the following settings except - ANS-when
the party making the note is a high risk creditor.
Accounts with normal credit balances include - ANS-liabilities and stockholders' equity
Adjusting entries are made to ensure that - ANS--revenues are recorded in the period in
which the performance obligation is satisfied.
-balance sheet and income statement accounts have correct balances at the end of an
accounting period.
Although steps are missing, which of the following lists steps of the accounting cycle in
their correct order? - ANS-Journalize the transactions, journalize the adjusting entries,
journalize the closing entries.
An account is a part of a company's financial information system and is described by all
except which one of the following? - ANS-an account is a source document
An office supply store has a cashier who is also the accounts receivable clerk for the
company. Which internal control principles is violated - ANS-segregation of duties
At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to
employees was omitted. Which of the following statements is true? - ANS-Liabilities at
the end of the year are understated.
At what amount is a short-term note receivable recorded on the issue date? - ANS-face
value
At what value are accounts receivable reported on the balance sheet? - ANS-net/cash
realizable value
, Companies prepare various types of trial balances. Which trial balance lists all of a
company's permanent and temporary accounts? - ANS-the adjusted trial balance
Cost of goods sold - ANS-beginning inventory+purchases- ending inventory=cost of
goods sold
Debits increase - ANS-assets and decrease liabilities.
Dividing net income minus preferred stock dividends by the average of common shares
outstanding produces the following: - ANS-earnings per share
During a given year, several parties examine the financial records of ABC Company.
These parties include internal auditors, independent auditors, and Internal Revenue
Service agents. Which of these parties are considered employees of ABC Company? -
ANS-internal auditors
earnings per share - ANS-earnings per share=net income-preferred dividends divided
by average common share outstanding
ending retained earnings - ANS-beginning retained earnings+net income-expenses-
dividends=ending retained earnings
factoring is a process of - ANS-selling accounts receivable at a discount to another
party
Factoring is the process of - ANS-selling accounts receivable at a discount to another
party.
Financial statements can be prepared directly from the - ANS-adjusted trial balance
For which item below might a bank issue a credit memorandum to a depositor's
account? - ANS-interest earned
For which of the following might a bank issue a debit memorandum to a depositor's
account? - ANS--NSF checks
-monthly service charge
gross profit - ANS-gross profit=net sales-cost of goods sold
OR
gross profit=net income+operating expenses
gross profit ratio - ANS-gross profit ratio=gross profit/net sales
Handy Inc. permits only designated personnel such as cashiers to handle cash receipts.
What principle is being applied? - ANS-establishment of responsibility
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