ACCT 3001 Final Exam Questions and Answers Already Passed Latest 2025-2026
To calculate earnings per share, net income
-is divided by the weighted average number of common shares outstanding.
-is divided by the ending common shares outstanding.
-minus preferred dividends is divided by the weighted average number of common shares outstanding.
-minus preferred dividends is divided by the ending common shares outstanding. - Answersminus
preferred dividends is divided by the weighted average number of common shares outstanding.
Which of the following is not included in comprehensive income?
-unrealized holding gains
-investments by owners
-losses on disposal of assets
-dividend revenue - Answers-investments by owners
Which of the following can be defined as gains and losses that bypass net income but affect
stockholders' equity?
-prior period income
-unusual gains and losses
-comprehensive income
-other comprehensive income - Answers-other comprehensive income
Cash inflows as a result of a company's central operations are classified as
revenues.
losses.
expenses.
gains. - Answersrevenues
Discontinued operations are reported in the income statement because of a concept called the
-current operating performance concept.
-prior period adjustment concept.
,-phase-out period concept.
-modified all-inclusive concept. - Answers-modified all-inclusive concept.
_______________ retained earnings can only be used for specific purposes, whereas _________
retained earnings can be used as needed by the company. - Answersappropriated, free
Why do companies sometimes use earnings management?
-To offer new stock options at higher or lower prices than market value.
-To temporarily decrease expenses in order to save money for expansion.
-To temporarily increase revenues in order to pay back debt.
-To beat Wall Street's expectations so that the value of the company's stock increases. - Answers-To
beat Wall Street's expectations so that the value of the company's stock increases.
What is another name for the one statement approach?
-the term income statement
-the net income statement
-the statement of converging income
-the statement of comprehensive income - Answers-the statement of comprehensive income
Which of the following is an example of a significant accounting policy that should be disclosed on the
financial statements?
-Yates International has calculated a fair market value of $2.6 million for the bonds and stocks they have
purchased from other entities.
-Marsh Enterprises signed a lease agreement for an office building at a cost of $1,500 per month for five
years.
-Owen Industries has a tax operating-loss carryforward of $98,524.
-Trujillo Chemicals uses the double-declining-balance method of depreciation for major assets. -
Answers-Trujillo Chemicals uses the double-declining-balance method of depreciation for major assets.
format where the left side shows the assets whereas the right side shows the liabilities and stockholders'
equity sections. This requires two facing pages to be used - AnswersAccount format
form where the sections are list assets listed first, and underneath the assets, the liabilities and
stockholders' equity sections follow. - Answersreport format
Which disclosure technique is used to disclose the most lengthy and detailed information?
, -note
-parenthetical explanation
-cross-reference
-supporting schedule - Answers-supporting schedule
short statement about the asset or liability located at the end of the balance sheet. - Answersnote
used when there is a relationship between a couple of accounts with "see the respective accounts"
noted directly in the financial statement. - Answerscross-reference
used when the information is short enough to become part of the financial statement. -
AnswersParenthetical explanations
Specific information related to fixed assets should be included in the summary of significant accounting
policies. This information should include
-both the depreciation method used and the composition of the asset.
=the depreciation method used but not the composition of the asset.
-the composition of the asset but not the depreciation method used.
-neither the depreciation method used nor the composition of the asset. - Answers=the depreciation
method used but not the composition of the asset.
Which of the following are supplemental balance sheet disclosures?I. financial forecasts.II.
contingencies.III. accounting policies.IV. contractual situations.
-I, II, and IV.
-I, II, and III.
-I, II, III, and IV.
-II, III, and IV. - Answers-II, III, and IV.
Pauline is calculating the company's total investments that they plan to convert to cash within the next
three months. Peter is calculating the assets that the company plans to convert to cash within the next
year. What is the difference between Pauline and Peter's tasks?
-Pauline is working with current liabilities, while Peter is working with current assets.
-Pauline is working with cash equivalents, while Peter is working with current assets.
-Pauline is working with current assets, while Peter is working with cash equivalents.
To calculate earnings per share, net income
-is divided by the weighted average number of common shares outstanding.
-is divided by the ending common shares outstanding.
-minus preferred dividends is divided by the weighted average number of common shares outstanding.
-minus preferred dividends is divided by the ending common shares outstanding. - Answersminus
preferred dividends is divided by the weighted average number of common shares outstanding.
Which of the following is not included in comprehensive income?
-unrealized holding gains
-investments by owners
-losses on disposal of assets
-dividend revenue - Answers-investments by owners
Which of the following can be defined as gains and losses that bypass net income but affect
stockholders' equity?
-prior period income
-unusual gains and losses
-comprehensive income
-other comprehensive income - Answers-other comprehensive income
Cash inflows as a result of a company's central operations are classified as
revenues.
losses.
expenses.
gains. - Answersrevenues
Discontinued operations are reported in the income statement because of a concept called the
-current operating performance concept.
-prior period adjustment concept.
,-phase-out period concept.
-modified all-inclusive concept. - Answers-modified all-inclusive concept.
_______________ retained earnings can only be used for specific purposes, whereas _________
retained earnings can be used as needed by the company. - Answersappropriated, free
Why do companies sometimes use earnings management?
-To offer new stock options at higher or lower prices than market value.
-To temporarily decrease expenses in order to save money for expansion.
-To temporarily increase revenues in order to pay back debt.
-To beat Wall Street's expectations so that the value of the company's stock increases. - Answers-To
beat Wall Street's expectations so that the value of the company's stock increases.
What is another name for the one statement approach?
-the term income statement
-the net income statement
-the statement of converging income
-the statement of comprehensive income - Answers-the statement of comprehensive income
Which of the following is an example of a significant accounting policy that should be disclosed on the
financial statements?
-Yates International has calculated a fair market value of $2.6 million for the bonds and stocks they have
purchased from other entities.
-Marsh Enterprises signed a lease agreement for an office building at a cost of $1,500 per month for five
years.
-Owen Industries has a tax operating-loss carryforward of $98,524.
-Trujillo Chemicals uses the double-declining-balance method of depreciation for major assets. -
Answers-Trujillo Chemicals uses the double-declining-balance method of depreciation for major assets.
format where the left side shows the assets whereas the right side shows the liabilities and stockholders'
equity sections. This requires two facing pages to be used - AnswersAccount format
form where the sections are list assets listed first, and underneath the assets, the liabilities and
stockholders' equity sections follow. - Answersreport format
Which disclosure technique is used to disclose the most lengthy and detailed information?
, -note
-parenthetical explanation
-cross-reference
-supporting schedule - Answers-supporting schedule
short statement about the asset or liability located at the end of the balance sheet. - Answersnote
used when there is a relationship between a couple of accounts with "see the respective accounts"
noted directly in the financial statement. - Answerscross-reference
used when the information is short enough to become part of the financial statement. -
AnswersParenthetical explanations
Specific information related to fixed assets should be included in the summary of significant accounting
policies. This information should include
-both the depreciation method used and the composition of the asset.
=the depreciation method used but not the composition of the asset.
-the composition of the asset but not the depreciation method used.
-neither the depreciation method used nor the composition of the asset. - Answers=the depreciation
method used but not the composition of the asset.
Which of the following are supplemental balance sheet disclosures?I. financial forecasts.II.
contingencies.III. accounting policies.IV. contractual situations.
-I, II, and IV.
-I, II, and III.
-I, II, III, and IV.
-II, III, and IV. - Answers-II, III, and IV.
Pauline is calculating the company's total investments that they plan to convert to cash within the next
three months. Peter is calculating the assets that the company plans to convert to cash within the next
year. What is the difference between Pauline and Peter's tasks?
-Pauline is working with current liabilities, while Peter is working with current assets.
-Pauline is working with cash equivalents, while Peter is working with current assets.
-Pauline is working with current assets, while Peter is working with cash equivalents.
