ACCT 2840 EXAM QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026
Independent verification - Answers somone not involved in work reviews numbers
Bank reconciliation - Answers compares cash balance to bank statement
Adjusting bank statement balance = - Answers + deposits in transit - outstanding checks
Adjusting book balance = - Answers + interests, collections by bank - bank fees, NSF checks, errors
Income statement - Answers reports revenues, expenses, profit/loss
Gross profit = - Answers netsales - COGS
Operating expenses - Answers wages, rent, utilities
Operating income = - Answers gross profit - operating expenses
Net income = - Answers total revenues - total expenses
COGS = - Answers beg inventory + purchases - end inventory
Year-end inventory - Answers goods owned by company, in transit, on cosignment
Shipping point - Answers include as inventory
Goods on consignment - Answers goods sent to another company to sell for you, goods held by
another company, goods partially completed
WAG - Answers weighted-average cost, all units are identical, cost is averaged
Average cost per unit - Answers cost of goods available / units available
Specific identification - Answers each unit is individually tracked
FIFO - Answers higher ending inventory, lower COGS
LIFO - Answers lower taxes, higher COGS, lower net income
Net accounts recievable - Answers amount of receivables the company expects to collect
Aging method - Answers estimates bad dept by grouping AR by how long theyve been outstanding
Bad dept expense = - Answers required allowance - existing allowance
Required allowance = - Answers amount x % estimated uncollectable
Allowance T account credits - Answers + beginning inventory, bad dept expense, recoveries
Allowance T account debits - Answers - write offs
Ending AR = - Answers beginning AR + credit sales - cash collections - write offs
Write offs - Answers decrease AR, decrease uncollectible accounts decrease, net AR is the same, total
assets remain the same
Independent verification - Answers somone not involved in work reviews numbers
Bank reconciliation - Answers compares cash balance to bank statement
Adjusting bank statement balance = - Answers + deposits in transit - outstanding checks
Adjusting book balance = - Answers + interests, collections by bank - bank fees, NSF checks, errors
Income statement - Answers reports revenues, expenses, profit/loss
Gross profit = - Answers netsales - COGS
Operating expenses - Answers wages, rent, utilities
Operating income = - Answers gross profit - operating expenses
Net income = - Answers total revenues - total expenses
COGS = - Answers beg inventory + purchases - end inventory
Year-end inventory - Answers goods owned by company, in transit, on cosignment
Shipping point - Answers include as inventory
Goods on consignment - Answers goods sent to another company to sell for you, goods held by
another company, goods partially completed
WAG - Answers weighted-average cost, all units are identical, cost is averaged
Average cost per unit - Answers cost of goods available / units available
Specific identification - Answers each unit is individually tracked
FIFO - Answers higher ending inventory, lower COGS
LIFO - Answers lower taxes, higher COGS, lower net income
Net accounts recievable - Answers amount of receivables the company expects to collect
Aging method - Answers estimates bad dept by grouping AR by how long theyve been outstanding
Bad dept expense = - Answers required allowance - existing allowance
Required allowance = - Answers amount x % estimated uncollectable
Allowance T account credits - Answers + beginning inventory, bad dept expense, recoveries
Allowance T account debits - Answers - write offs
Ending AR = - Answers beginning AR + credit sales - cash collections - write offs
Write offs - Answers decrease AR, decrease uncollectible accounts decrease, net AR is the same, total
assets remain the same
