ACC 311 Final Exam Questions With Correct
Answers
Which of the following best describe financing activities as they relate to the
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Statement of Cash Flows? - CORRECT ANSWER✔✔-They result primarily from
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securing money by bank loans or selling stock to investors.
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Which of the following statements does not correctly describe an adjustment to
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net income when determining cash flows from operating activities using the
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indirect method? | |
A. An increase in accounts receivable will be subtracted from net income.
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B. Depreciation expense on a depreciable asset will be added to net income.
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C. An increase in accrued liabilities will be subtracted from net income.
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D. An increase in accounts payable will be added to net income - CORRECT
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ANSWER✔✔-An increase in accrued liabilities will be subtracted from net income
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The primary difference in accounting for available-for-sale securities and
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accounting for trading securities is: - CORRECT ANSWER✔✔-Determining where
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the unrealized holding gain or loss on investments is reported in the financial
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statements; in current net income or in comprehensive income.
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Which of the following will not be found in the bond indenture?
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A. The coupon rate of interest
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B. The face value of the bonds
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, C. The term of the bonds
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D. The market rate of interest
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E. Any covenants that govern the bond issue during its life. - CORRECT
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ANSWER✔✔-The market rate of interest | | | |
Which of the following statements is correct?
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A. Any unrealized holding gain or loss on investments in trading securities is
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reported on the income statement.
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B. Any unrealized holding gain or loss on investments in available-for-sale
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securities is reported on the income statement.
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C. All unrealized gains and losses are reported on the income statement
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regardless of the method used to account for the investment.
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D. All unrealized holding gain and losses are reported on the balance sheet
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regardless of the method used to account for the investment. - CORRECT
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ANSWER✔✔-Any unrealized holding gain or loss on investments in trading
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securities is reported on the income statement.
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Which of the following statements is not correct?
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A. The bond principal is the amount due at the maturity date of the bond.
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B. The stated interest rate is used to determine the cash interest payments.
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C. The bond principal is used to determine the cash interest payments.
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D. The market interest rate is used to determine the cash interest payments. -
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CORRECT ANSWER✔✔-The market interest rate is used to determine the cash
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interest payments.
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Answers
Which of the following best describe financing activities as they relate to the
| | | | | | | | | | | | |
Statement of Cash Flows? - CORRECT ANSWER✔✔-They result primarily from
| | | | | | | | | |
securing money by bank loans or selling stock to investors.
| | | | | | | | |
Which of the following statements does not correctly describe an adjustment to
| | | | | | | | | | | |
net income when determining cash flows from operating activities using the
| | | | | | | | | | |
indirect method? | |
A. An increase in accounts receivable will be subtracted from net income.
| | | | | | | | | | |
B. Depreciation expense on a depreciable asset will be added to net income.
| | | | | | | | | | | |
C. An increase in accrued liabilities will be subtracted from net income.
| | | | | | | | | | |
D. An increase in accounts payable will be added to net income - CORRECT
| | | | | | | | | | | | | |
ANSWER✔✔-An increase in accrued liabilities will be subtracted from net income
| | | | | | | | | |
The primary difference in accounting for available-for-sale securities and
| | | | | | | | |
accounting for trading securities is: - CORRECT ANSWER✔✔-Determining where
| | | | | | | | |
the unrealized holding gain or loss on investments is reported in the financial
| | | | | | | | | | | | |
statements; in current net income or in comprehensive income.
| | | | | | | |
Which of the following will not be found in the bond indenture?
| | | | | | | | | | |
A. The coupon rate of interest
| | | | |
B. The face value of the bonds
| | | | | |
, C. The term of the bonds
| | | | |
D. The market rate of interest
| | | | |
E. Any covenants that govern the bond issue during its life. - CORRECT
| | | | | | | | | | | | |
ANSWER✔✔-The market rate of interest | | | |
Which of the following statements is correct?
| | | | | | |
|
A. Any unrealized holding gain or loss on investments in trading securities is
| | | | | | | | | | | | |
reported on the income statement.
| | | | |
B. Any unrealized holding gain or loss on investments in available-for-sale
| | | | | | | | | | |
securities is reported on the income statement.
| | | | | | |
C. All unrealized gains and losses are reported on the income statement
| | | | | | | | | | | |
regardless of the method used to account for the investment.
| | | | | | | | | |
D. All unrealized holding gain and losses are reported on the balance sheet
| | | | | | | | | | | | |
regardless of the method used to account for the investment. - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-Any unrealized holding gain or loss on investments in trading
| | | | | | | | | |
securities is reported on the income statement.
| | | | | |
Which of the following statements is not correct?
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|
A. The bond principal is the amount due at the maturity date of the bond.
| | | | | | | | | | | | | |
B. The stated interest rate is used to determine the cash interest payments.
| | | | | | | | | | | |
C. The bond principal is used to determine the cash interest payments.
| | | | | | | | | | |
D. The market interest rate is used to determine the cash interest payments. -
| | | | | | | | | | | | | |
CORRECT ANSWER✔✔-The market interest rate is used to determine the cash
| | | | | | | | | | |
interest payments.
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