CSUF ACCT 201A (Hoffman) Final Exam – Questions
With Correct Solutions
Generally accepted accounting principles are: Right Ans - a set of standards
and rules that are recognized as a general guide for financial reporting.
Which is an advantage of corporations relative to partnerships and sole
proprietorships? Right Ans - Reduced legal liability for investors.
Kam Company has the following units and costs.
Inventory, Jan. 1 8,000 $11
Purchase, Jun. 19 13,000 $12
Purchase, Nov. 8 5,000 $13
If 9,000 units are on hand at December 31, what is the cost of the ending
inventory under FIFO? Right Ans - $113,000
(total 309,000 - ((8,000*11)+(remaining 9,000*12))
To record the sale of goods for cash in a perpetual inventory system: Right
Ans - two journal entries are necessary: one to record the receipt of cash and
sales revenue, and one to record the cost of goods sold and reduction of
inventory.
Which is not one of the three primary business activities? Right Ans -
Advertising.
A trial balance: Right Ans - will not balance if a correct journal entry is
posted twice.
Which accounts normally have debit balances? Right Ans - Assets,
dividends, and expenses.
Which account will have a zero balance after a company has journalized and
posted closing entries? Right Ans - Service Revenue.
Adjustments for prepaid expenses: Right Ans - decrease assets and
increase expenses.
, Queenan Company computes depreciation on delivery equipment at $1,000
for the month of June. The adjusting entry to record this depreciation is as
follows: Right Ans - Depreciation Expense dr 1,000. Accumulated
Depreciation-Equipment cr 1,000
A ledger: Right Ans - is a record of all accounts maintained by a company
and their amounts.
Net income will result during a time period when: Right Ans - revenues
exceed expenses.
Davidson Electronics has the following:
Inventory, Jan. 1 5,000 $8
Purchase, April 2 15,000 $10
Purchase, Aug. 28 20,000 $12
If Davidson has 7,000 units on hand at December 31, the cost of ending
inventory under the average-cost method is: Right Ans - $75,250
40,000+ 150,000+ 240,000 = 430,000
40,000 units
430,000/40,000 = 10.75
10.75 * 7,000
The element of a corporation's annual report that describes the corporation's
accounting methods is: Right Ans - notes to the financial statements.
Gross profit will result if: Right Ans - net sales are greater than cost of
goods sold.
As a result of a thorough physical inventory, Railway Company determined
that it had inventory worth $180,000 at December 31, 2022. This count did
not take into consideration the following facts. Rogers Consignment Store
currently has goods worth $35,000 on its sales floor that belong to Railway
but are being sold on consignment by Rogers. The selling price of these goods
is $50,000. Railway purchased $13,000 of goods that were shipped on
December 27, FOB destination, that will be received by Railway on January 3.
Determine the correct amount of inventory that Railway should report.
Right Ans - $215,000
(180,000+ 35,000)
With Correct Solutions
Generally accepted accounting principles are: Right Ans - a set of standards
and rules that are recognized as a general guide for financial reporting.
Which is an advantage of corporations relative to partnerships and sole
proprietorships? Right Ans - Reduced legal liability for investors.
Kam Company has the following units and costs.
Inventory, Jan. 1 8,000 $11
Purchase, Jun. 19 13,000 $12
Purchase, Nov. 8 5,000 $13
If 9,000 units are on hand at December 31, what is the cost of the ending
inventory under FIFO? Right Ans - $113,000
(total 309,000 - ((8,000*11)+(remaining 9,000*12))
To record the sale of goods for cash in a perpetual inventory system: Right
Ans - two journal entries are necessary: one to record the receipt of cash and
sales revenue, and one to record the cost of goods sold and reduction of
inventory.
Which is not one of the three primary business activities? Right Ans -
Advertising.
A trial balance: Right Ans - will not balance if a correct journal entry is
posted twice.
Which accounts normally have debit balances? Right Ans - Assets,
dividends, and expenses.
Which account will have a zero balance after a company has journalized and
posted closing entries? Right Ans - Service Revenue.
Adjustments for prepaid expenses: Right Ans - decrease assets and
increase expenses.
, Queenan Company computes depreciation on delivery equipment at $1,000
for the month of June. The adjusting entry to record this depreciation is as
follows: Right Ans - Depreciation Expense dr 1,000. Accumulated
Depreciation-Equipment cr 1,000
A ledger: Right Ans - is a record of all accounts maintained by a company
and their amounts.
Net income will result during a time period when: Right Ans - revenues
exceed expenses.
Davidson Electronics has the following:
Inventory, Jan. 1 5,000 $8
Purchase, April 2 15,000 $10
Purchase, Aug. 28 20,000 $12
If Davidson has 7,000 units on hand at December 31, the cost of ending
inventory under the average-cost method is: Right Ans - $75,250
40,000+ 150,000+ 240,000 = 430,000
40,000 units
430,000/40,000 = 10.75
10.75 * 7,000
The element of a corporation's annual report that describes the corporation's
accounting methods is: Right Ans - notes to the financial statements.
Gross profit will result if: Right Ans - net sales are greater than cost of
goods sold.
As a result of a thorough physical inventory, Railway Company determined
that it had inventory worth $180,000 at December 31, 2022. This count did
not take into consideration the following facts. Rogers Consignment Store
currently has goods worth $35,000 on its sales floor that belong to Railway
but are being sold on consignment by Rogers. The selling price of these goods
is $50,000. Railway purchased $13,000 of goods that were shipped on
December 27, FOB destination, that will be received by Railway on January 3.
Determine the correct amount of inventory that Railway should report.
Right Ans - $215,000
(180,000+ 35,000)
