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Financial Accounting Final Exam (Ivy Tech)
questions with answers
Revenues - CORRECT ANSWERS ✔✔Gross increase in equity from a company's business activities that earn income; also called sales. Expenses - CORRECT ANSWERS ✔✔Outflows or using up of assets as part of operations of a business to generate sales. Accounts Receivable - CORRECT ANSWERS ✔✔Amounts to be received in the future due to the sale of goods or services Accounting Equation - CORRECT ANSWERS ✔✔Assets = Liabilities + Equity Income Statement - CORRECT ANSWERS ✔✔describes a company's revenues and expenses along with the resulting net income or loss over a period of time due to earnings activities Accounts on Income Statement - CORRECT ANSWERS ✔✔Revenues - Expenses Balance Sheet - CORRECT ANSWERS ✔✔Financial statement that lists types and dollar amounts of assets, liabilities, and equity at a specific date. Accounts on balance sheet - CORRECT ANSWERS ✔✔assets, liabilities, equity
Primary Objective of Financial Reporting - CORRECT ANSWERS ✔✔to provide information that is useful to investors and creditors for decision making Expanded Accounting Equation - CORRECT ANSWERS ✔✔Assets = Liabilities
- Common Stock + Revenues - Expenses - Dividends FASB (Financial Accounting Standards Board) - CORRECT ANSWERS ✔✔sets accounting standards (GAAP) in the U.S. T account - CORRECT ANSWERS ✔✔debit left, credit right Normal Balance of Expenses - CORRECT ANSWERS ✔✔Debit (decrease equity) Normal balance of Revenues - CORRECT ANSWERS ✔✔credit Normal Balance of dividends - CORRECT ANSWERS ✔✔Dr. (it decreases owner's equity) normal balance of assets - CORRECT ANSWERS ✔✔Debit Increases. Credit decreases. NB: Debit. normal balance of liabilities - CORRECT ANSWERS ✔✔credit increases, debit decreases NB:Credit
Dividends are closed to what account? - CORRECT ANSWERS ✔✔retained earnings closing entries - CORRECT ANSWERS ✔✔Entries at the end of an accounting period to transfer the balances of temporary accounts to a permanent stockholders' equity account, Retained Earnings. Merchandise Inventory - CORRECT ANSWERS ✔✔an asset, but when sold cost of goods sold Cost of Goods Sold - CORRECT ANSWERS ✔✔beginning inventory + purchases - ending inventory Current liabilities include - CORRECT ANSWERS ✔✔notes payable, accounts payable, unearned revenues, and accrued liabilities such as taxes, salaries and wages, and interest. gross profit - CORRECT ANSWERS ✔✔net sales - cost of goods sold Calculate Net Income - CORRECT ANSWERS ✔✔Revenue - Expenses FOB shipping point - CORRECT ANSWERS ✔✔included in inventory of buyer while in transit FOB destination - CORRECT ANSWERS ✔✔ownership of the goods remains with the seller until the goods reach the buyer
when prices rise, net income calculated under LIFO would be ___________ than under FIFO - CORRECT ANSWERS ✔✔lower specific identification method is used for what types of goods - CORRECT ANSWERS ✔✔things with serial numbers, like bikes, cars, jewelers On a bank reconciliation statement, which of the following items are (a) added to the bank balance; (b) deducted from the bank balance; (c) added to the company's Cash balance; (d) deducted from the company's Cash balance? o Outstanding checks o NSF (non-sufficient funds) checks o Deposits in transit - CORRECT ANSWERS ✔✔a) deposits in transit b)outstanding checks c)none? d)NSF net realizable value= - CORRECT ANSWERS ✔✔Accounts Receivable - Allowance for Doubtful Accounts bad debts expense for the period must be estimated and a _____________ is used to reduce Accounts Receivable - CORRECT ANSWERS ✔✔contra-asset account (allowance for uncollectible accounts) What amounts go in to land account on balance sheet? - CORRECT ANSWERS ✔✔cash price of land, net cost of garbage removal, closing costs book value of an asset= - CORRECT ANSWERS ✔✔cost - accumulated depreciation
Is a journal entry made for a stock split? - CORRECT ANSWERS ✔✔No the purpose of a statement of cash flows is - CORRECT ANSWERS ✔✔to give information about cash activity (receipts and payments) examples of financing activities - CORRECT ANSWERS ✔✔noncurrent liability account and equity accounts examples of investing activities - CORRECT ANSWERS ✔✔identify changes in noncurrent assets and current accounts for notes receivable and investments in securities examples of operating activities - CORRECT ANSWERS ✔✔cash flows Calculate Current Ratio - CORRECT ANSWERS ✔✔Current Ratio = Current Assets / Current Liabilities an inventory cycle begins with purchase of inventory and ends with its sale - CORRECT ANSWERS ✔✔higher volume of sales, the more inventory cycles completed
