ACCOUNTING PRINCIPLES 1 FINAL EXAM (2025)
QUESTIONS & A+ GRADED ANSWERS
Jack and Jill form a partnership. Jack runs the business in New York, while Jill vacations in Hawaii. During
the time Jill is away from the business, Jack increases the debts of the business by $20,000. What is true
regarding this debt? -
Ans Both Jack and Jill are personally liable for the business debt
What question is most likely asked by an internal human resources director for the company? -
Ans What average pay raise is affordable for employees this year?
Account receivable -
Ans the right to receive money in the future
In a classified balance sheet, assets are usually classified as -
Ans current assets; long-term investments; property, plant, and equipment; and intangible assets
When expenses exceed revenues, what is true? -
Ans A net loss results
A current asset is... -
,Ans expected to be converted to cash or used in the business within a relatively short period of time
Trademarks would appear in which balance sheet section? -
Ans Intangible assets
Ratios that measure the income or operating success of a company for a given period of time are... -
Ans ...profitability ratios
Earnings available to common stockholders is equal to... -
Ans ...net income - preferred dividends
The relationship between current assets and current liabilities is important in evaluating a company's: -
Ans Liquidity
Current assets divided by current liabilities -
Ans The current ratio
The recept of cash in advance from a customer... -
Ans ...increases assets and liabilities
The left side of an account is... -
Ans ...the debit side
, An account consists of... -
Ans ...a title, a debit side, and a credit side
A debit to an asset account indicates a(n): -
Ans increase in the asset
The normal balance of any account is the: -
Ans side which increase that account
A revenue account... -
Ans ...in increases by credits
Which accounts normally have debit balances? -
Ans Assets, expenses, and dividends
Which accounts normally have credit balances? -
Ans Revenues, liabilities, and retained earnings
An accountant has debited an asset account for $1,000 and credited a liability account for $500. What
can be done to complete the recording of the transaction? -
Ans Credit a different asset account for $500
QUESTIONS & A+ GRADED ANSWERS
Jack and Jill form a partnership. Jack runs the business in New York, while Jill vacations in Hawaii. During
the time Jill is away from the business, Jack increases the debts of the business by $20,000. What is true
regarding this debt? -
Ans Both Jack and Jill are personally liable for the business debt
What question is most likely asked by an internal human resources director for the company? -
Ans What average pay raise is affordable for employees this year?
Account receivable -
Ans the right to receive money in the future
In a classified balance sheet, assets are usually classified as -
Ans current assets; long-term investments; property, plant, and equipment; and intangible assets
When expenses exceed revenues, what is true? -
Ans A net loss results
A current asset is... -
,Ans expected to be converted to cash or used in the business within a relatively short period of time
Trademarks would appear in which balance sheet section? -
Ans Intangible assets
Ratios that measure the income or operating success of a company for a given period of time are... -
Ans ...profitability ratios
Earnings available to common stockholders is equal to... -
Ans ...net income - preferred dividends
The relationship between current assets and current liabilities is important in evaluating a company's: -
Ans Liquidity
Current assets divided by current liabilities -
Ans The current ratio
The recept of cash in advance from a customer... -
Ans ...increases assets and liabilities
The left side of an account is... -
Ans ...the debit side
, An account consists of... -
Ans ...a title, a debit side, and a credit side
A debit to an asset account indicates a(n): -
Ans increase in the asset
The normal balance of any account is the: -
Ans side which increase that account
A revenue account... -
Ans ...in increases by credits
Which accounts normally have debit balances? -
Ans Assets, expenses, and dividends
Which accounts normally have credit balances? -
Ans Revenues, liabilities, and retained earnings
An accountant has debited an asset account for $1,000 and credited a liability account for $500. What
can be done to complete the recording of the transaction? -
Ans Credit a different asset account for $500
