ACC 231 EXAM 2 2026 EXAM PREPARATION
PACK KEY FINANCIAL ACCOUNTING
CONCEPTS WITH SAMPLE QUESTIONS
◉ Quick Ratio Formula. Answer: Quick Assets/Current Liabilities
◉ A company has sales revenue of $133,000, cost of goods sold of
$63,000, operating expenses of $37,000, and other expenses of
$4,000. The company's operating income is:. Answer: $33,000
[133,000 - 63,000 - 37,000}
◉ Operating Income Formula. Answer: Gross Profit (Sales Revenue -
COGS) - Operating Expenses
◉ Syrio's Snowboards uses the perpetual inventory system. At year
end the general ledger indicated that the company had a balance of
$24,000 in the Inventory account. Actual inventory on hand per a
physical count was $19,000. What action does the company now
need to take?
-Debit Purchases and credit Cost of Goods Sold, $5,000
-No action is required because the amount is not material
,-Debit Inventory and credit Cost of Goods Sold, $5,000
-Debit Cost of Goods Sold and credit Inventory, $5,000. Answer:
Debit Cost of Goods Sold and credit Inventory, $5,000
◉ Salieri Company purchased 80 keyboards on account for $15 each
from Amadeus, Inc. When they unpacked the keyboards, Salieri
found that 30 of the keyboards were damaged in shipping. What is
the journal entry that Salieri will make to record the purchase
return?
-Debit Purchase Returns and credit Inventory $1,200
-Debit Accounts Payable - Amadeus and credit Inventory $1,200
-Debit Accounts Payable - Amadeus and credit Inventory $450
-Debit Purchase Returns and credit Inventory, $450. Answer: Debit
Accounts Payable - Amadeus and credit Inventory $450
◉ Carlton Company purchases $8,000 of inventory with shipping
terms, FOB Portland. Carlton is based in Seattle and the supplier is
based in Portland. The shipping costs are $450. What is the cost of
Carlton's Inventory?. Answer: $8,450
◉ ____________ produces the lowest cost of goods sold and the highest
gross profit when prices are decreasing
, -Average Cost
-Specific Identification
-LIFO
-FIFO. Answer: LIFO
◉ New technology, like the latest cell phones and HDTV, would
probably be costed using the:
-LIFO method of inventory costing
-moving average method of inventory costing
-any method as the physical flow and the cost flow are different
-FIFO method of inventory costing. Answer: Any method as the
physical flow and the cost flow are different
◉ Gengler Company acquired three pieces of equipment for
$1,700,000. Equipment #1 is appraised at $470,000, equipment #2
is appraised at $630,000 and equipment #3 is appraised for
$640,000. The cost of equipment #1 is:. Answer: $459,195
[470,000 + 630,000 + 640,000 = 1,740,000]
[470,,740,000 = 27%]
[1,700,000 * 27% = 459,195]
PACK KEY FINANCIAL ACCOUNTING
CONCEPTS WITH SAMPLE QUESTIONS
◉ Quick Ratio Formula. Answer: Quick Assets/Current Liabilities
◉ A company has sales revenue of $133,000, cost of goods sold of
$63,000, operating expenses of $37,000, and other expenses of
$4,000. The company's operating income is:. Answer: $33,000
[133,000 - 63,000 - 37,000}
◉ Operating Income Formula. Answer: Gross Profit (Sales Revenue -
COGS) - Operating Expenses
◉ Syrio's Snowboards uses the perpetual inventory system. At year
end the general ledger indicated that the company had a balance of
$24,000 in the Inventory account. Actual inventory on hand per a
physical count was $19,000. What action does the company now
need to take?
-Debit Purchases and credit Cost of Goods Sold, $5,000
-No action is required because the amount is not material
,-Debit Inventory and credit Cost of Goods Sold, $5,000
-Debit Cost of Goods Sold and credit Inventory, $5,000. Answer:
Debit Cost of Goods Sold and credit Inventory, $5,000
◉ Salieri Company purchased 80 keyboards on account for $15 each
from Amadeus, Inc. When they unpacked the keyboards, Salieri
found that 30 of the keyboards were damaged in shipping. What is
the journal entry that Salieri will make to record the purchase
return?
-Debit Purchase Returns and credit Inventory $1,200
-Debit Accounts Payable - Amadeus and credit Inventory $1,200
-Debit Accounts Payable - Amadeus and credit Inventory $450
-Debit Purchase Returns and credit Inventory, $450. Answer: Debit
Accounts Payable - Amadeus and credit Inventory $450
◉ Carlton Company purchases $8,000 of inventory with shipping
terms, FOB Portland. Carlton is based in Seattle and the supplier is
based in Portland. The shipping costs are $450. What is the cost of
Carlton's Inventory?. Answer: $8,450
◉ ____________ produces the lowest cost of goods sold and the highest
gross profit when prices are decreasing
, -Average Cost
-Specific Identification
-LIFO
-FIFO. Answer: LIFO
◉ New technology, like the latest cell phones and HDTV, would
probably be costed using the:
-LIFO method of inventory costing
-moving average method of inventory costing
-any method as the physical flow and the cost flow are different
-FIFO method of inventory costing. Answer: Any method as the
physical flow and the cost flow are different
◉ Gengler Company acquired three pieces of equipment for
$1,700,000. Equipment #1 is appraised at $470,000, equipment #2
is appraised at $630,000 and equipment #3 is appraised for
$640,000. The cost of equipment #1 is:. Answer: $459,195
[470,000 + 630,000 + 640,000 = 1,740,000]
[470,,740,000 = 27%]
[1,700,000 * 27% = 459,195]
