Exam (elaborations)
ACG FINAL EXAM QUESTIONS AND ANSWERS
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ACG FINAL EXAM QUESTIONS AND ANSWERS
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Name: Score:52 Multiple choice questions
Definition 1 of 52
update inventory account for every purchase + every sale; at any point, inventory in the
accounting records should match a physical count of the inventory, identifies inventory
shrinkage
Journal Entries
1. purchase inventory
debit inventory, credit cash or A/P
2. sale of inventory
debit cash or A/R, credit sales revenue
debit CGS, credit inventory
perpetual inventory system
formula for interest expense vs formula for cash payment for interest
define revenue and expenses
preferred stock preferences
Definition 2 of 52
1. Establish Responsibility
2. Segregate Duties
3. Restrict Access
4. Document Procedures
5. Independently Verify
Calculate straight line depreciation
define and calculate book value
Principles of Control Activities
Advantages of corporations
,Definition 3 of 52
A report that accounts for the differences between the bank statement and a checkbook
balance
cash per bank includes
+deposits in transit
- outstanding checks
cash per books includes:
+EFT deposits
+interest earned
-service charges
-EFT payments
-NSF checks
define revenue and expenses
bank reconciliation
Accural Accounting
rights of stockholders
Definition 4 of 52
debit cash and credit bonds payable
journal entry to issue bonds at face value
journal entry to record deferred revenue, and adjusting entry to record revenue earned
journal entry for write-offs of accounts receivable
journal entry to issue bonds at a discount
Definition 5 of 52
Record expenses when incurred in earning revenue
Expense Recognition Principle
Accural Accounting
closing accounts:
define and calculate book value
,Definition 6 of 52
1. shares of stock can be purchased in small amounts
2. ownership interest are transferable
3. stockholder's have limited liability, are not liable for the corporations debt
rights of stockholders
post-closing trial balance
Advantages of corporations
Principles of Control Activities
Definition 7 of 52
debit cash and credit common stock and additional paid-in capital
journal entry to issue bonds at a premium
journal entry for issuing preferred stock
journal entry for issuing stock with par value for cash
journal entry to record deferred revenue, and adjusting entry to record revenue earned
Definition 8 of 52
first in, first out
gives lowest CGS + highest net income + has highest end inventory closest to current
replacement cost
dividends in arrears
par value
closing accounts:
FIFO
, Definition 9 of 52
debit payroll tax expense, credit FICA tax payable, credit unemployment tax payable
journal entry for issuing preferred stock
journal entry to record sales tax payable
journal entry to issue bonds at a discount
journal entry to record payroll tax expense
Definition 10 of 52
the division of a single share of stock into more than one share
normally will reduce the price per share of each share in proportion to the increase in shares
value/share DECREASES
# of shares INCREASES
total value SAME
bank reconciliation
stock split
issued shares
The accounting cycle
Definition 11 of 52
debit allowance for doubtful accounts, credit A/R
journal entry to issue bonds at face value
prepare the adjusting entry to record depreciation
journal entry for write-offs of accounts receivable
Revenue Recognition Principle if paid when work is complete:
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