ACCOUNTING 201 FINAL EXAM QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2026
balance sheet - Answers assets
liabilities
equity
income statement - Answers revenue
expense
gains/losses
gross profit
net income/loss
statement of retained earning - Answers beginning capital
contributed capital
ending capital
statement of cash flow - Answers listing of cash inflows/outflows
operating
investing
financing
steps in accounting cycle - Answers identity
journalize
communicate
cost principle - Answers record at cost
revenue recognition - Answers revenue recognized when earned
matching principle - Answers expenses and related revenue recorded in the same period
adjusting entries - Answers depreciation
accruals interest/revenue
prepaid
LIFO - Answers last in first out
FIFO - Answers first in first out
cost of goods sold - Answers beginning inventory plus net purchases minus ending inventory
gross profit - Answers sales minus cost of goods sold
perpetual - Answers ongoing
bank reconciliation - Answers adjusted bank balance
adjusted book balance
straight line depreciation - Answers cost - salvage value / estimated life
accounts receivable - Answers bad debt expense
allowance method
write off method
trading - Answers reported at Market Value after adjustment of unrealized gain or loss
help to maturity - Answers reported at cost
available for sale - Answers reported at Market Value after adjustment of unrealized gain or loss
investments - Answers trading
held to maturity
available for sale
maturity date - Answers date principal is due back
bond discount - Answers cash received is less than principal
market rate is more than contract
bond premium - Answers cash received is more than principal
market rate is less than contract
effective rate of interest - Answers effective interest amortization
debenture - Answers bonds backs by good faith of issuer/borrower
present value - Answers the value of future dollars in terms of today's dollar
par value - Answers book value of stock
preferred vs. common stock - Answers preferred are paid first
earnings per share - Answers (net income-preferred dividends)/weighted avg stock outstanding
treasury stock - Answers stock repurchased by company
stock dividends - Answers no effect on stockholder's equity
assets - Answers current/long term
balance sheet - Answers assets
liabilities
equity
income statement - Answers revenue
expense
gains/losses
gross profit
net income/loss
statement of retained earning - Answers beginning capital
contributed capital
ending capital
statement of cash flow - Answers listing of cash inflows/outflows
operating
investing
financing
steps in accounting cycle - Answers identity
journalize
communicate
cost principle - Answers record at cost
revenue recognition - Answers revenue recognized when earned
matching principle - Answers expenses and related revenue recorded in the same period
adjusting entries - Answers depreciation
accruals interest/revenue
prepaid
LIFO - Answers last in first out
FIFO - Answers first in first out
cost of goods sold - Answers beginning inventory plus net purchases minus ending inventory
gross profit - Answers sales minus cost of goods sold
perpetual - Answers ongoing
bank reconciliation - Answers adjusted bank balance
adjusted book balance
straight line depreciation - Answers cost - salvage value / estimated life
accounts receivable - Answers bad debt expense
allowance method
write off method
trading - Answers reported at Market Value after adjustment of unrealized gain or loss
help to maturity - Answers reported at cost
available for sale - Answers reported at Market Value after adjustment of unrealized gain or loss
investments - Answers trading
held to maturity
available for sale
maturity date - Answers date principal is due back
bond discount - Answers cash received is less than principal
market rate is more than contract
bond premium - Answers cash received is more than principal
market rate is less than contract
effective rate of interest - Answers effective interest amortization
debenture - Answers bonds backs by good faith of issuer/borrower
present value - Answers the value of future dollars in terms of today's dollar
par value - Answers book value of stock
preferred vs. common stock - Answers preferred are paid first
earnings per share - Answers (net income-preferred dividends)/weighted avg stock outstanding
treasury stock - Answers stock repurchased by company
stock dividends - Answers no effect on stockholder's equity
assets - Answers current/long term
