ACCT 101 FINAL EXAM QUESTIONS
AND ANSWERS
The financial statements are usually prepared in which of the following sequences? -
Answer- Income statement, retained earnings statement, balance sheet, and statement
of cash flows
When the auditor is satisfied that the financial statements are presented in accordance
with generally accepted accounting principles, a(n): - Answer- unqualified opinion is
expressed.
The ending retained earnings balance appears on: - Answer- Both the retained earnings
statement and the balance sheet.
The issuance of common stock is reported on the statement of cash flows as a(n):
OFI activities - Answer- Financing activity.
Lankston Company began the year by issuing $60,000 of common stock for cash. The
company recorded revenues of $550,000, expenses of $480,000, and paid dividends of
$30,000. What was Lankston's net income for the year? - Answer- $70,000
Elston Company compiled the following partial financial information as of December 31,
2012:
Revenues $420,000
Common stock 90,000
Equipment 120,000
Expenses 375,000
Cash 105,000
Dividends 30,000
Supplies 15,000
Accounts payable 60,000
Accounts receivable 45,000
Retained earnings, 1/1/12 225,000
Elston's retained earnings on December 31, 2012 are: - Answer- $240,000
RE= previous RE +net income(Revenues - Expenses) - dividends
, Which of the following statements is not true regarding the Sarbanes-Oxley Act (SOX)
of 2002?
The Act calls for decreased independence of outside auditors reviewing corporate
financial statements.
The Act calls for increased oversight responsibilities for boards of directors.
The Act has resulted in increased penalties for financial fraud by top management.
The Act is meant to decrease the likelihood of unethical corporate behavior. - Answer-
The Act calls for decreased independence of outside auditors reviewing corporate
financial statements.
Which of the following would not be considered an external user of accounting data for
the Julian Company?
Internal Revenue Service Agent,
Management
Creditors
Customers - Answer- Management
The partnership form of business organization
enjoys an unlimited life.
is a common form of organization for service-type businesses.
is a separate legal entity.
has limited liability. - Answer- is a common form of organization for service-type
businesses.
Which of the following groups uses accounting information to determine whether the
company can pay its obligations?
Investors in common stock
Marketing managers
AND ANSWERS
The financial statements are usually prepared in which of the following sequences? -
Answer- Income statement, retained earnings statement, balance sheet, and statement
of cash flows
When the auditor is satisfied that the financial statements are presented in accordance
with generally accepted accounting principles, a(n): - Answer- unqualified opinion is
expressed.
The ending retained earnings balance appears on: - Answer- Both the retained earnings
statement and the balance sheet.
The issuance of common stock is reported on the statement of cash flows as a(n):
OFI activities - Answer- Financing activity.
Lankston Company began the year by issuing $60,000 of common stock for cash. The
company recorded revenues of $550,000, expenses of $480,000, and paid dividends of
$30,000. What was Lankston's net income for the year? - Answer- $70,000
Elston Company compiled the following partial financial information as of December 31,
2012:
Revenues $420,000
Common stock 90,000
Equipment 120,000
Expenses 375,000
Cash 105,000
Dividends 30,000
Supplies 15,000
Accounts payable 60,000
Accounts receivable 45,000
Retained earnings, 1/1/12 225,000
Elston's retained earnings on December 31, 2012 are: - Answer- $240,000
RE= previous RE +net income(Revenues - Expenses) - dividends
, Which of the following statements is not true regarding the Sarbanes-Oxley Act (SOX)
of 2002?
The Act calls for decreased independence of outside auditors reviewing corporate
financial statements.
The Act calls for increased oversight responsibilities for boards of directors.
The Act has resulted in increased penalties for financial fraud by top management.
The Act is meant to decrease the likelihood of unethical corporate behavior. - Answer-
The Act calls for decreased independence of outside auditors reviewing corporate
financial statements.
Which of the following would not be considered an external user of accounting data for
the Julian Company?
Internal Revenue Service Agent,
Management
Creditors
Customers - Answer- Management
The partnership form of business organization
enjoys an unlimited life.
is a common form of organization for service-type businesses.
is a separate legal entity.
has limited liability. - Answer- is a common form of organization for service-type
businesses.
Which of the following groups uses accounting information to determine whether the
company can pay its obligations?
Investors in common stock
Marketing managers
