ACC 200 EXAM REVIEW QUESTIONS WITH
VERIFIED SOLUTIONS
The balance sheet presents the accounting equation at a specific point in time. (True/False)
True
______ is a present obligation of an entity to transfer or provide an economic benefit.
Liability
______ is a present right of an entity to an economic benefit.
Asset
______ is remaining claim against the assets of a business, after liabilities have been
satisfied.
Equity
Assets are the ______ of the company.
resources
Liabilities and equity are the _____ of the capital needed to purchase the assets.
sources
If a company's total assets amount to $100,000 and total liabilities amount to $40,000, then
total equity must amount to _______.
$60,000 (Asset = Liability + Equity)
Which account types are divided into current and non-current portions on the balance
sheet?
current and non-current
All companies use the calendar year for their fiscal year. (True/False)
False
Current assets are generally presented in the balance sheet in what order?
From most liquid (cash) to least liquid (pre-paid expenses)
Which of the following are current assets?
Inventory
Prepaid expenses
Company reputation
Loans
,Intangible assets such as patents
Accounts Receivable
Cash
Revenue
Employees
Equipment
Inventory, prepaid expenses, accounts receivable, and cash.
The cash balance presented on the balance sheet includes cash in all of the company bank
accounts and any cash that is on-site at the company. (True/False)
True
Which of the following assets would be included in the investment account on the balance
sheet?
U.S. government securities
Machines
Cash
Accounts receivable
Time deposits
Bonds
Stocks
Non-U.S. government securities
Prepaid expenses
Time deposits, bonds, stocks, U.S government securities, and non-U.S. government securities.
Investments on the balance sheet are generally measured at their _____ value.
Fair value
Accounts receivable are IOUs from customers that are presented on the balance sheet at:
The amount that the company expects to collect from customers.
(Accounts receivable are reported at the amount owed from customers (called accounts
receivable, "gross") minus an estimate of how much will not be collected. The resulting value is
called accounts receivable, net and is what is reported on the balance sheet.)
A company has Accounts Receivable, Gross of $50,000. It expects that 4% of these accounts
receivable will not be paid by its customers. Which of the following statements is true
regarding the companies accounts receivable? (select all that apply)
A) The company will report Accounts Receivable, Net of $48,000 on its balance sheet.
B) The company will report Accounts Receivable, Gross of $48,000 on its balance sheet.
C) The company will report Accounts Receivable, Net of $2,000 on its balance sheet.
D) The company will report Accounts Receivable, Net of $50,000 on its balance sheet.
, A&C
Which of the following statements describes when accounts receivable are removed from
the balance sheet? (select all that apply)
A) When it is determined that the customer will never pay for the goods.
B) When the customer signs a contract to pay for the goods
C) When the account receivable is sold to a bank at a reduced amount.
D) When the customer promises to pay for the goods.
E) When the customer pays for the goods.
F) When the customer receives the goods purchased.
A&C&E
Inventory is presented on the balance sheet at:
The cost to purchase or manufacture the inventory.
Prepaid expense are assets reported on the balance sheet. (True/False)
True.
On October 1, a company pays $600 for twelve months of insurance. Three months later on
December 31, when this company creates its balance sheet, how much will the company
report as a prepaid assets related to this insurance?
$450
Non-current assets are those that are expected to be used for more than one year.
(True/False)
True.
DEFT Enterprises reports Total Assets of $15 million and Total Equity of $8 million. What
is Total Liabilities of DEFT Enterprises?
7 million
The Investments account reported on the balance sheet includes any Cash the company has
in the bank. (True/False)
False
Cosmo Technologies' balance sheet reports Accounts Receivable, Net of $45,000. In its
notes to the financial statements, Cosmo reports that the balance in the Allowance for
Uncollectible Accounts is $3,000. What is Accounts Receivable, Gross for Cosmo
Technologies?
48,000
Sundance Properties purchases a 12-month insurance policy for $2,400 on July 1. Six-
months later, Sundance Properties is preparing their year-end balance sheet. How much
VERIFIED SOLUTIONS
The balance sheet presents the accounting equation at a specific point in time. (True/False)
True
______ is a present obligation of an entity to transfer or provide an economic benefit.
Liability
______ is a present right of an entity to an economic benefit.
Asset
______ is remaining claim against the assets of a business, after liabilities have been
satisfied.
Equity
Assets are the ______ of the company.
resources
Liabilities and equity are the _____ of the capital needed to purchase the assets.
sources
If a company's total assets amount to $100,000 and total liabilities amount to $40,000, then
total equity must amount to _______.
$60,000 (Asset = Liability + Equity)
Which account types are divided into current and non-current portions on the balance
sheet?
current and non-current
All companies use the calendar year for their fiscal year. (True/False)
False
Current assets are generally presented in the balance sheet in what order?
From most liquid (cash) to least liquid (pre-paid expenses)
Which of the following are current assets?
Inventory
Prepaid expenses
Company reputation
Loans
,Intangible assets such as patents
Accounts Receivable
Cash
Revenue
Employees
Equipment
Inventory, prepaid expenses, accounts receivable, and cash.
The cash balance presented on the balance sheet includes cash in all of the company bank
accounts and any cash that is on-site at the company. (True/False)
True
Which of the following assets would be included in the investment account on the balance
sheet?
U.S. government securities
Machines
Cash
Accounts receivable
Time deposits
Bonds
Stocks
Non-U.S. government securities
Prepaid expenses
Time deposits, bonds, stocks, U.S government securities, and non-U.S. government securities.
Investments on the balance sheet are generally measured at their _____ value.
Fair value
Accounts receivable are IOUs from customers that are presented on the balance sheet at:
The amount that the company expects to collect from customers.
(Accounts receivable are reported at the amount owed from customers (called accounts
receivable, "gross") minus an estimate of how much will not be collected. The resulting value is
called accounts receivable, net and is what is reported on the balance sheet.)
A company has Accounts Receivable, Gross of $50,000. It expects that 4% of these accounts
receivable will not be paid by its customers. Which of the following statements is true
regarding the companies accounts receivable? (select all that apply)
A) The company will report Accounts Receivable, Net of $48,000 on its balance sheet.
B) The company will report Accounts Receivable, Gross of $48,000 on its balance sheet.
C) The company will report Accounts Receivable, Net of $2,000 on its balance sheet.
D) The company will report Accounts Receivable, Net of $50,000 on its balance sheet.
, A&C
Which of the following statements describes when accounts receivable are removed from
the balance sheet? (select all that apply)
A) When it is determined that the customer will never pay for the goods.
B) When the customer signs a contract to pay for the goods
C) When the account receivable is sold to a bank at a reduced amount.
D) When the customer promises to pay for the goods.
E) When the customer pays for the goods.
F) When the customer receives the goods purchased.
A&C&E
Inventory is presented on the balance sheet at:
The cost to purchase or manufacture the inventory.
Prepaid expense are assets reported on the balance sheet. (True/False)
True.
On October 1, a company pays $600 for twelve months of insurance. Three months later on
December 31, when this company creates its balance sheet, how much will the company
report as a prepaid assets related to this insurance?
$450
Non-current assets are those that are expected to be used for more than one year.
(True/False)
True.
DEFT Enterprises reports Total Assets of $15 million and Total Equity of $8 million. What
is Total Liabilities of DEFT Enterprises?
7 million
The Investments account reported on the balance sheet includes any Cash the company has
in the bank. (True/False)
False
Cosmo Technologies' balance sheet reports Accounts Receivable, Net of $45,000. In its
notes to the financial statements, Cosmo reports that the balance in the Allowance for
Uncollectible Accounts is $3,000. What is Accounts Receivable, Gross for Cosmo
Technologies?
48,000
Sundance Properties purchases a 12-month insurance policy for $2,400 on July 1. Six-
months later, Sundance Properties is preparing their year-end balance sheet. How much
