COB 241 FINAL EXAMINATION SCRIPT
2026 QUESTIONS WITH ANSWERS
GRADED A+
>> Income Statement
Answer: Reports results of operations for a period of time. accounts are called temporary or nominal
accounts - they close to retained earnings at year end.
>> Balance Sheet
Answer: Reports financial position for a single point in time. Accounts are called permanent accounts -
they carry forward to the following year.
>> Operating Activities
Answer: Cash receipts from revenue (incl. interest) and payments for expenses (incl. interest).
>> Investing Activities
Answer: Cash receipts and payments for the purchase and sale of long-term assets.
>> Financing Activities
Answer: Cash receipts from issuing common stock and borrowing, and cash payments for dividends
and repayment of borrowed funds
>> Recognition
Answer: Formally recording an economic item or event in the financial statements.
>> Realization
Answer: Collecting cash, generally from the sale of products or services.
>> Accrual Accounting
Answer: objective is to improve matching of revenues with expenses.
>> Conservatism accounting
Answer: guides accountants to select the alternative that produces the lowest amount of net income.
>> Matching Concept
Answer: to recognize revenues and expenses in which they occur, regardless of when cash is
exchanged.
>> Depreciation
Answer: systematic way of recognizing the expense of using an asset throughout its useful life.
, >> Straight-Line Depreciation
Answer: the same amount of depreciation is taken each accounting period.
>> Interest Expense
Answer: Price x Rate% x Time
>> Trial Balance
Answer: a proof of the equality of debits and credits in a general ledger
>> closing entries
Answer: transfer balances in nominal accounts to retained earnings after financial statements are
prepared.
>> Periodic Inventory
Answer: Uses a purchases control account, and cost of goods sold is calculated at year-end after a
physical count is taken.
>> General Journal
Answer: recorded from a source document (such as a receipt) to general journal.
>> Periodic inventory system
Answer: Uses a purchases control account, and cost of goods sold is calculated at year-end after a
physical count is taken. (supply closet)
>> Perpetual inventory system
Answer: Inventory and cost of goods sold accounts are continuously adjusted for each purchase
and/or sale transaction.Made possible because of advances in point-of-sale technology (bar coding).
>> Product Cost
Answer: Costs that are included in the preparing and getting ready for sale of inventory.
>> Period Costs
Answer: Costs that are not included in inventory. They are sometimes called Selling & Administrative
Costs.
>> Cost of Goods Sold is an...
Answer: expense
>> Gross Margin (gross profit)
Answer: sales revenue - cost of goods sold
>> Cash Discounts
2026 QUESTIONS WITH ANSWERS
GRADED A+
>> Income Statement
Answer: Reports results of operations for a period of time. accounts are called temporary or nominal
accounts - they close to retained earnings at year end.
>> Balance Sheet
Answer: Reports financial position for a single point in time. Accounts are called permanent accounts -
they carry forward to the following year.
>> Operating Activities
Answer: Cash receipts from revenue (incl. interest) and payments for expenses (incl. interest).
>> Investing Activities
Answer: Cash receipts and payments for the purchase and sale of long-term assets.
>> Financing Activities
Answer: Cash receipts from issuing common stock and borrowing, and cash payments for dividends
and repayment of borrowed funds
>> Recognition
Answer: Formally recording an economic item or event in the financial statements.
>> Realization
Answer: Collecting cash, generally from the sale of products or services.
>> Accrual Accounting
Answer: objective is to improve matching of revenues with expenses.
>> Conservatism accounting
Answer: guides accountants to select the alternative that produces the lowest amount of net income.
>> Matching Concept
Answer: to recognize revenues and expenses in which they occur, regardless of when cash is
exchanged.
>> Depreciation
Answer: systematic way of recognizing the expense of using an asset throughout its useful life.
, >> Straight-Line Depreciation
Answer: the same amount of depreciation is taken each accounting period.
>> Interest Expense
Answer: Price x Rate% x Time
>> Trial Balance
Answer: a proof of the equality of debits and credits in a general ledger
>> closing entries
Answer: transfer balances in nominal accounts to retained earnings after financial statements are
prepared.
>> Periodic Inventory
Answer: Uses a purchases control account, and cost of goods sold is calculated at year-end after a
physical count is taken.
>> General Journal
Answer: recorded from a source document (such as a receipt) to general journal.
>> Periodic inventory system
Answer: Uses a purchases control account, and cost of goods sold is calculated at year-end after a
physical count is taken. (supply closet)
>> Perpetual inventory system
Answer: Inventory and cost of goods sold accounts are continuously adjusted for each purchase
and/or sale transaction.Made possible because of advances in point-of-sale technology (bar coding).
>> Product Cost
Answer: Costs that are included in the preparing and getting ready for sale of inventory.
>> Period Costs
Answer: Costs that are not included in inventory. They are sometimes called Selling & Administrative
Costs.
>> Cost of Goods Sold is an...
Answer: expense
>> Gross Margin (gross profit)
Answer: sales revenue - cost of goods sold
>> Cash Discounts
