Rutgers Intro to Financial Accounting Final Exam Questions with Correct Answers
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Course
Financial Accounting
Institution
Financial Accounting
What is the Accounting Equation? Also what are the respective normal balances? - Answer-Assets = Liabilities + Owner's Equity
debit credit
Under assets what 3 types are there? - Answer-Current Assets, Investments, Property Plant and Equipment
Under liabilities what 2 types are there? - Answe...
Rutgers Intro to Financial Accounting
Final Exam Questions with Correct
Answers
What is the Accounting Equation? Also what are the respective normal balances? -
Answer-Assets = Liabilities + Owner's Equity
debit credit
Under assets what 3 types are there? - Answer-Current Assets, Investments, Property
Plant and Equipment
Under liabilities what 2 types are there? - Answer-Current and Long-Term liabilities
Under Owner's equity what 3 sections are there? - Answer-Common Stock, Preferred
Stock, Retained Earnings
What is included in the Income Statement? Also what is the normal balance? What is
the product of those two items? And where does that amount go? - Answer-Revenues
and expenses
credit debit
revenues- expenses = Net income/loss which is added to retained earnings
What is a worksheet and is it required? What are the steps in preparation? - Answer-
Optional multiple column tool to help in making financial Statements
1) Prepare a trial balance on the worksheet
2) Enter adjusting entries (keying)
3) Adjust balances and extend correct amount to place in income statement column or
balance sheet column
4) Total columns and calculate net income/loss
5) Close the books, close temporary accounts and keep permanent accounts.
6) Post closing trial balance shows about after
What are the closing entries to close the books? - Answer-a)Debit revenue accounts
and credit income summary
b)credit expense accounts and debit income summary
c)debit/credit (whichever is more) income summary and do the opposite to retained
earnings
d)credit dividends and debit retained earnings
What are correcting entries? - Answer-Not adjusting entries, but fixing entries whenever
an issue is found
, What is the formula for COGS? - Answer-Beginning Inventory + Purchases - ending
inventory
extra: Sales revenue - COGS = Gross profit - Operating Expenses = Net Income
beginning inventory + COGS = Goods available for sale
True or false, Service Companies have longer operating cycles. - Answer-False
What are the 2 types of inventory systems? - Answer-Periodic and Perpetual
Characteristics of a periodic system: - Answer-Per period inventory count
Uses purchases account and discount account
Characteristics of a perpetual system - Answer-every change in inventory is recorded
Uses inventory and cash and COGS
Stuff is often purchased and sold on account
What is the journalizing for the following:
XYZ company purchases 1000 dollars worth of goods
XYZ sells half the goods at 50 percent marked up price - Answer-Purchases 1000
cash 1000
Cash 750
sales revenue 750
What is the journalizing for the following:
XYZ company increases inventory 1000 dollars
XYZ company sells half the merchandise at 50 percent mark up price - Answer-
Inventory 1000
cash 1000
Cash 750
sales revenue 750
COGS 500
Inventory 500
What is FOB destination and FOB shipping point and how does it affect shipping .freight
costs - Answer-Freight on board destination - at the destination title(ownership) of the
goods changes hands. Meaning the seller pays the freight cost
FOB shipping point - as soon as it gets on the vehicle it changes hands, meaning the
buyer pays the freight cost
Under periodic systems what are the ways to calculate the amount of goods? what are
their advantages - Answer-FIFO - the general natural way stuff goes out, also generally
reduces the impact of inflation
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