Accounting 1301 Final Exam Questions with Verified Solutions Latest Update 2025/2026
Financial Accounting Standards Board - Answers The private organization that oversees the
creation and governance of accounting standards in the United States.
GAAP Stand for - Answers Generally Accepted Accounting Principles.
Accounting Equation - Answers Assets = Liabilities + Equity
What is the correct order of the preparation of the financial statements - Answers Income
Statements - Statement of Revenue earned - Balance sheet - Statement of Cash closed.
What are revenues - Answers Earnings that result from delivering goods or services to
customers. Increases equity. Example: Service revenue and Rent revenue.
What is a ledger - Answers It's a collection of all the accounts, the changes in those accounts,
and their balances.
Which account groups have a normal credit balance? - Answers 1) Liabilities 2) Common stock
3) Revenues4) Retained earnings.
Which account groups have normal debit balance? - Answers Assets, Liabilities, and Equity.
Which basis of accounting is required by GAAP - Answers The accrual basis
What is accrued revenue - Answers It's a revenue that has been earned, but for which the cash
has not yet been collected.
What is depreciation - Answers The process by which business spread the allocation of a plant
asset's cost over its useful life.
What is the book value - Answers A depreciable asset's cost minus accumulated depreciation
What is a permanent account - Answers An account that is not closed at the end of the period.
The asset, liability, common stock, and retained earning accounts.
What are closing entries - Answers Are entries made at the end of an accounting period to zero
out all temporary accounts and transfer their balances to permanent accounts. In other words,
the temporary accounts are closed or reset at the end of the year
Which types of accounts are temporary - Answers 1) Revenues 2) Expenses3) Dividends
What is post-closing trial balance - Answers Entering that transfer the revenues, expenses, and
dividends balances to retained earnings.
The two main categories of merchandising systems - Answers Perpetual and Periodic
. How to interpret credit terms - Answers 3|10, n|30 Number amount of discount Max # days for
Financial Accounting Standards Board - Answers The private organization that oversees the
creation and governance of accounting standards in the United States.
GAAP Stand for - Answers Generally Accepted Accounting Principles.
Accounting Equation - Answers Assets = Liabilities + Equity
What is the correct order of the preparation of the financial statements - Answers Income
Statements - Statement of Revenue earned - Balance sheet - Statement of Cash closed.
What are revenues - Answers Earnings that result from delivering goods or services to
customers. Increases equity. Example: Service revenue and Rent revenue.
What is a ledger - Answers It's a collection of all the accounts, the changes in those accounts,
and their balances.
Which account groups have a normal credit balance? - Answers 1) Liabilities 2) Common stock
3) Revenues4) Retained earnings.
Which account groups have normal debit balance? - Answers Assets, Liabilities, and Equity.
Which basis of accounting is required by GAAP - Answers The accrual basis
What is accrued revenue - Answers It's a revenue that has been earned, but for which the cash
has not yet been collected.
What is depreciation - Answers The process by which business spread the allocation of a plant
asset's cost over its useful life.
What is the book value - Answers A depreciable asset's cost minus accumulated depreciation
What is a permanent account - Answers An account that is not closed at the end of the period.
The asset, liability, common stock, and retained earning accounts.
What are closing entries - Answers Are entries made at the end of an accounting period to zero
out all temporary accounts and transfer their balances to permanent accounts. In other words,
the temporary accounts are closed or reset at the end of the year
Which types of accounts are temporary - Answers 1) Revenues 2) Expenses3) Dividends
What is post-closing trial balance - Answers Entering that transfer the revenues, expenses, and
dividends balances to retained earnings.
The two main categories of merchandising systems - Answers Perpetual and Periodic
. How to interpret credit terms - Answers 3|10, n|30 Number amount of discount Max # days for
