ACCT 3110 FINAL EXAM QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026

ACCT 3110 FINAL EXAM QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026 Who are the primary users of financial systems? - Answers External Users what is the purpose of fianncial reporting - Answers Help make decisions External decision makers would not look primarily to financial accounting information to assist them in making decisions relating to: A) Making loans to the company. B) Compensation of company executives. C) The purchase of stocks and bonds. D) Estimates of the potential for future profits. - Answers B) Compensation of company executives. Enhancing characteristics of accounting information are: A) Relevance and comparability. B) Comparability and consistency. C) Faithful representation and relevance. D) Verifiability and Timeliness. - Answers D) Verifiability and Timeliness. Adjusting entries are not needed for: A) Cash basis accounting. B) Accrual accounting. C) Current value accounting. D) Manual accounting systems. - Answers A) Cash basis accounting. The employees of Green Incorporated work Monday through Friday. Every other Friday the company issues payroll checks totaling $840,000. The current pay period ends on Friday, August 3. Green Incorporated is now preparing financial statements for the fiscal year ended July 30. What is the adjusting entry to record accrued salaries at the end of July? a.) debit salaries payable/credit prepaid salaries b.) debit salaries expense and prepaid salaries/credit salaries payable c.)debit prepaid salaries/credit salaries payable d.)debit saaries expense/credit salaries payable - Answers d.)debit saaries expense/credit salaries payable At the end of the month, a company received a bill for social media advertising services, $400. The bill will be paid in 10 days. How would the transaction be recorded today? A) Debit Advertising expense $400, credit Accounts payable $400 B) Debit Accounts payable $400, credit Advertising expense $400 C) Debit Accounts payable $400, credit Cash $400 D) Debit Advertising expense $400, credit Cash $400 - Answers A) Debit Advertising expense $400, credit Accounts payable $400 Penny purchased equipment for her business by signing a loan payable. Which of the following correctly describes how to record this transaction? A) debit assets, credit liabilities B) debit assets, credit shareholders' equity C) debit liabilities, credit assets D) debit expenses, credit liabilities - Answers A) debit assets, credit liabilities Singlestep vs multi step - Answers Presentation Which of the following is not true about EPS? A) It must be reported by all corporations whose stock is publicly traded. B) It must be reported separately for discontinued operations. C) It must be reported on operating income. D) None of these answer choices are correct. - Answers C) It must be reported on operating income. Notes payable that are due in 11 months are: A) Current liabilities. B) Long-term intangible assets. C) Long-term liabilities. D) Long-term investments. - Answers A) Current liabilities. ABC Company's trial balance included the following account balances on December 31, 2025: Accounts payable $ 26,400 Bonds payable, due 2033 24,900 Salaries payable 17,600 Notes payable, due 2026 22,000 Notes payable, due 2029 40,300 What amount should be included in the current liabilities section of ABC's December 31, 2025, balance sheet? A) $68,900 B) $106,300 C) $66,000 D) $44,000 - Answers 66,000 Cash flows from financing activities include: A) proceeds from issuing bonds. B) payment for the purchase of equipment. C) proceeds from the sale of inventory. D) cash outflows from acquiring land. - Answers A) proceeds from issuing bonds. nvesting cash outflows would include: A) Purchase of investments. B) Proceeds from services C) Payment of cash dividends. D) Purchases of inventory. - Answers A) Purchase of investments. The Formal Wear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. ● The book value of Formal Wear's assets totaled $50 million on December 31, 2024. ● Formal Wear's operating income was a pre-tax loss of $15 million in 2024. ● Tango's income tax rate is 25%. Suppose that the Formal Wear Division's assets had not been sold by December 31, 2024, but were considered held for sale. Assume that the fair value of these assets was $30 million on December 31, 2024. In the income statement for the year ended December 31, 2024, Tango Company would report discontinued operations of: A) $7.5 million loss. B) $30.25 million loss. C) $26.25 million loss. D) $18.0 million loss. - Answers C) $26.25 million loss. Loss from disc ops = 30 - 50 = 20 M + additional pre-tax loss of 15M = 35M Tax on disc ops = 35M x 0.25 = 8.75 M Idsc ops net of tax = 35M - 8.75M = 26.25M During its 2024 fiscal year, Jacobsen Corporation reported before-tax income of $700,000. This amount does not include the following two items, both of which are considered to be material in amount: Unusual gain = $150,000 Loss on discontinued operations = (600,000) The company's income tax rate is 25%. Jacobsen Corporation prepares its financial statements applying U.S. GAAP. In its 2024 income statement, Jacobsen would report income from continuing operations of: A) $391,500. B) $465,000. C) $637,500. D) $620,000 - Answers C) $637,500. Income from continuing ops = 700,000 + 150,000 = 850,000 Tax on inc from cont ops = 850,000 x .25 = 212,500 Income from cont ops net of tax = 850,000 - 212,500 = 637, 500 Freda's Florist reported the following before-tax income statement items for the year ended December 31, 2024: Operating income = $ 252,000 Income on discontinued operations = 68,000 All income statement items are subject to a 25% income tax rate. In its 2024 income statement, Freda's income tax expense from continuing operations and total income tax expense would be: A) $80,00 and $80,00, respectively. B) $80,000 and $130,000, respectively. C) $80,000 and $63,000, respectively. D) $63,000 and $80,000, respectively. - Answers D) $63,000 and $80,000, respectively. Tax on income from cont ops = 252,000 x 0.25 = 63,000 Tax on disc ops = 68,000 x 0.35 = 17,000 Total tax = 63,000 + 17,000 = 80,000 A company includes in ending inventory any goods that have been shipped to consignees to be sold on consignment. Which of the following is an accurate statement regarding the company's policy? A) The policy is correct if management believes it is probable the inventory will be sold within the next year. B) The policy is not correct because the company has title to consignment goods until those goods are sold to a third-party customer. C) The policy is not correct because the company has title to consignment goods after those goods are sold to a third-party customer. D) The policy is correct because the company has title to consignment goods until those goods are sold to a third-party customer. - Answers D) The policy is correct because the company has title to consignment goods until those goods are sold to a third-party customer. When is revenue recognized? - Answers when the service is provided or the goods are delivered ABC Company sold supplies for $46,000 to DEF Company on April 12 of the current year, with terms 1/15, n/60. ABC uses the GROSS method of accounting for sales discounts. What entry would ABC make on April 23, assuming the customer made the full payment on that date? -Debit ---Credit -Cash 45,540 -Sales 460 ---Accounts receivable 46,000 -Cash 46,000 -Sales discounts 460 ---Accounts receivable 46,000 ---Sales discounts forfeited 460 -Cash 45,540 -Sales discounts 460 ---Accounts receivable 46,000 -Cash 45,540 ---Accounts receivable 45,540 - Answers -Cash 45,540 -Sales 460 ---Accounts receivable 46,000 ABC Company sold supplies for $46,000 to DEF Company on April 12 of the current year, with terms 1/15, n/60. ABC uses the NET method of accounting for sales discounts. What entry would ABC make on April 23, assuming the customer made the full payment on that date? -Debit ---Credit -Cash 45,540 -Sales 460 ---Accounts receivable 46,000 -Cash 46,000 -Sales discounts 460 ---Accounts receivable 46,000 ---Sales discounts forfeited 460 -Cash 45,540 -Sales discounts 460 ---Accounts receivable 46,000 -Cash 45,540 ---Accounts receivable 45,540 - Answers -Cash 45,540 ---Accounts receivable 45,540 XYZ Company estimates bad debt expense at 2% of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $471,000 and $1,650, respectively, at December 31, 2023. During 2024, XYZ's credit sales and collections were $350,000 and $319,000, respectively, and $1,720 in accounts receivable were written off. XYZ's 2024 bad debt expense is: A) $1,720. B) $6,380. C) $9,420. D) $7,000. - Answers D) $7,000. Bad debtr expense=- given * (2%of credit sales) .02*350,000=7,000 NS Company prepares a bank reconciliation at the end of every month. At the end of July, the balance in the general ledger checking account was $2,750 and the bank balance on the bank statement was $2,980. Outstanding checks totaled $680 and deposits in transited were $400. The bank statement revealed that a check written for $120 was incorrectly recorded by Brockton as a $220 disbursement. The bank statement listed service charges and NSF check charges totaling $150. The corrected cash balance is: A) $2,270. B) $2,550. C) $2,470. D) $2,700. - Answers 2,700