CSUF ACCT 201A (HOFFMAN) FINAL EXAM
COMPLETE QUESTIONS AND CORRECT
ANSWERS | GRADED AND THE LATEST SERIES
Generally accepted accounting principles are:
Ans: a set of standards and rules that are recognized as a general guide for
financial reporting.
Question: Which is an advantage of corporations relative to partnerships and
sole proprietorships?
Ans: Reduced legal liability for investors.
Question: 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?
Ans: $113,000
(total 309,000 - ((8,000*11)+(remaining 9,000*12))
Question: To record the sale of goods for cash in a perpetual inventory
system:
, 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.
Question: Which is not one of the three primary business activities?
Ans: Advertising.
Question: A trial balance:
Ans: will not balance if a correct journal entry is posted twice.
Question: Which accounts normally have debit balances?
Ans: Assets, dividends, and expenses.
Question: Which account will have a zero balance after a company has
journalized and posted closing entries?
Ans: Service Revenue.
Question: Adjustments for prepaid expenses:
Ans: decrease assets and increase expenses.
Question: 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:
, Ans: Depreciation Expense dr 1,000. Accumulated Depreciation-Equipment cr
1,000
Question: A ledger:
Ans: is a record of all accounts maintained by a company and their amounts.
Question: Net income will result during a time period when:
Ans: revenues exceed expenses.
Question: 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:
Ans: $75,250
40,000+ 150,000+ 240,000 = 430,000
40,000 units
430,000/40,000 = 10.75
10.75 * 7,000
Question: The element of a corporation's annual report that describes the
corporation's accounting methods is:
COMPLETE QUESTIONS AND CORRECT
ANSWERS | GRADED AND THE LATEST SERIES
Generally accepted accounting principles are:
Ans: a set of standards and rules that are recognized as a general guide for
financial reporting.
Question: Which is an advantage of corporations relative to partnerships and
sole proprietorships?
Ans: Reduced legal liability for investors.
Question: 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?
Ans: $113,000
(total 309,000 - ((8,000*11)+(remaining 9,000*12))
Question: To record the sale of goods for cash in a perpetual inventory
system:
, 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.
Question: Which is not one of the three primary business activities?
Ans: Advertising.
Question: A trial balance:
Ans: will not balance if a correct journal entry is posted twice.
Question: Which accounts normally have debit balances?
Ans: Assets, dividends, and expenses.
Question: Which account will have a zero balance after a company has
journalized and posted closing entries?
Ans: Service Revenue.
Question: Adjustments for prepaid expenses:
Ans: decrease assets and increase expenses.
Question: 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:
, Ans: Depreciation Expense dr 1,000. Accumulated Depreciation-Equipment cr
1,000
Question: A ledger:
Ans: is a record of all accounts maintained by a company and their amounts.
Question: Net income will result during a time period when:
Ans: revenues exceed expenses.
Question: 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:
Ans: $75,250
40,000+ 150,000+ 240,000 = 430,000
40,000 units
430,000/40,000 = 10.75
10.75 * 7,000
Question: The element of a corporation's annual report that describes the
corporation's accounting methods is:
