ACCT 3110 ENTRANCE EXAM QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026
The primary objective of financial reporting is to provide financial information about the reporting
company that is useful - Answers To existing and potential investors, lenders, and other creditors in
making decision about providing resources to the company.
Generally Accepted Accounting Principles(GAAP) are established by: - Answers The financial
Accounting Standards board
Changes in Stockholders' equity that result from the company's primary and usual business
operations are: - Answers Revenues and Expenses
Which of the following terms describe probably future economic benefits obtained or controlled by a
particular company as a result of past transactions or events? - Answers Asset
ABC corporation issues 1,000 shares of $10 par value common stock at $12 per share. In recording the
transaction, credits are made to: - Answers Common Stock $10,000 and Paid-in Capital in Excess of
Par Value $2,000
The financial effect of a business transaction is initially recorded with: - Answers A journal Entry
Which of the following descriptions about accrue basis accounting is INCORRECT? - Answers Under
accrual basis accounting, revenue is recognized when cash is received
After transactions are recorded in the general journal, the usual next step in the accounting cycle is
to: - Answers Post transactions to the general ledger where an unadjusted trial balance can be
prepared
The usual final step in the accounting cycle is to: - Answers Prepare a post-closing trial balance for the
next accounting period
Arnold Company provided services to its customers on credit for $25,000. For Arnold Company, this
transaction: - Answers Increased assets
Douglas Company paid its landlord $6,000 for this month's rental on its warehouse. This transaction: -
Answers Increased expenses
Atlas Corporation sold a used machine for less than its carrying value. This transaction: - Answers
Generated loss on sale of fixed assets
Which of the following is not an adjusting entry? - Answers Cash, Unearned Rent Revenue
When a prepaid expense was initially recorded as a debit to an asset account, the subsequent
required adjusting entry includes: - Answers A debit to an expense
Which of the following accounts is NOT considered a permanent account? - Answers Rent Expense
Which of the following income statement elements is an economic inflow that occurs from sale of
goods or services? - Answers Revenue
Which of the following is a current asset? - Answers United States treasury bill maturing in 2 months
Which of the following is classified as an operating activity on a statement of cash flows - Answers
Purchase of Inventory
In a bank reconciliation, deposits in transit are: - Answers Added to the bank balance
Gross Profit= - Answers Sales Revenue-COGS
Which statement is INCORRECT concerning the adjusted trial balance? - Answers The adjusted trial
balance lists the account balances segregated by assets and liabilities
A trail balance may prove that debits and credits are equal, but - Answers -An amount could be
entered in the wrong account
-A transaction could have been entered twice
-A transaction could have been omitted
Posting is the process of: - Answers Transferring the debit and credit information from the journal to
individual accounts in the general ledger
A trail balance can best be explained as a list of: - Answers All accounts and their balances at a
particular date
Adjustment - Answers Ending Balance-Beginning Balance
The entry to record a write-off of accounts receivable will include: - Answers A debit to allowance for
uncollectible accounts
Interest= - Answers Profit*Revenue rate*Time
Goods in transit which are shipped f.o.b. shipping point should be - Answers Included in the inventory
of the buyer
For creditors who provide loans to a company, their information needs are primarily concerned with: -
Answers The amount, timing and risks of future cash flows
The primary objective of financial reporting is to provide financial information about the reporting
company that is useful - Answers To existing and potential investors, lenders, and other creditors in
making decision about providing resources to the company.
Generally Accepted Accounting Principles(GAAP) are established by: - Answers The financial
Accounting Standards board
Changes in Stockholders' equity that result from the company's primary and usual business
operations are: - Answers Revenues and Expenses
Which of the following terms describe probably future economic benefits obtained or controlled by a
particular company as a result of past transactions or events? - Answers Asset
ABC corporation issues 1,000 shares of $10 par value common stock at $12 per share. In recording the
transaction, credits are made to: - Answers Common Stock $10,000 and Paid-in Capital in Excess of
Par Value $2,000
The financial effect of a business transaction is initially recorded with: - Answers A journal Entry
Which of the following descriptions about accrue basis accounting is INCORRECT? - Answers Under
accrual basis accounting, revenue is recognized when cash is received
After transactions are recorded in the general journal, the usual next step in the accounting cycle is
to: - Answers Post transactions to the general ledger where an unadjusted trial balance can be
prepared
The usual final step in the accounting cycle is to: - Answers Prepare a post-closing trial balance for the
next accounting period
Arnold Company provided services to its customers on credit for $25,000. For Arnold Company, this
transaction: - Answers Increased assets
Douglas Company paid its landlord $6,000 for this month's rental on its warehouse. This transaction: -
Answers Increased expenses
Atlas Corporation sold a used machine for less than its carrying value. This transaction: - Answers
Generated loss on sale of fixed assets
Which of the following is not an adjusting entry? - Answers Cash, Unearned Rent Revenue
When a prepaid expense was initially recorded as a debit to an asset account, the subsequent
required adjusting entry includes: - Answers A debit to an expense
Which of the following accounts is NOT considered a permanent account? - Answers Rent Expense
Which of the following income statement elements is an economic inflow that occurs from sale of
goods or services? - Answers Revenue
Which of the following is a current asset? - Answers United States treasury bill maturing in 2 months
Which of the following is classified as an operating activity on a statement of cash flows - Answers
Purchase of Inventory
In a bank reconciliation, deposits in transit are: - Answers Added to the bank balance
Gross Profit= - Answers Sales Revenue-COGS
Which statement is INCORRECT concerning the adjusted trial balance? - Answers The adjusted trial
balance lists the account balances segregated by assets and liabilities
A trail balance may prove that debits and credits are equal, but - Answers -An amount could be
entered in the wrong account
-A transaction could have been entered twice
-A transaction could have been omitted
Posting is the process of: - Answers Transferring the debit and credit information from the journal to
individual accounts in the general ledger
A trail balance can best be explained as a list of: - Answers All accounts and their balances at a
particular date
Adjustment - Answers Ending Balance-Beginning Balance
The entry to record a write-off of accounts receivable will include: - Answers A debit to allowance for
uncollectible accounts
Interest= - Answers Profit*Revenue rate*Time
Goods in transit which are shipped f.o.b. shipping point should be - Answers Included in the inventory
of the buyer
For creditors who provide loans to a company, their information needs are primarily concerned with: -
Answers The amount, timing and risks of future cash flows
