ACC/421 Sample Final Examination
This Sample Examination represents the Final Examination that students complete in Week Five. As in the following Sample Examination, the Final Examination includes questions that assess the course objectives. Although the Sample Examination includes one question per objective, the Final Examination includes three questions per course objective.
Refer to the questions in the following Sample Examination to represent the type of questions that students will be asked in the Final Examination. Refer students to the weekly readings and content outlines for each week as study references for the Final Examination.
Week One: The Accounting Environment
Objective: Explain the overall accounting cycle.
1.Which of the following would not be a correct form for an adjusting entry? a. A debit to a revenue and a credit to a liability.
b. A debit to an expense and a credit to a liability.
c. A debit to a liability and a credit to a revenue.
d. A debit to an asset and a credit to a liability.
Objective: Apply accounting concepts to business situations.
2.Decision makers vary widely in the types of decisions they make, the methods of decision making they employ, the information they already possess or can obtain from other sources, and their ability to process information. Consequently, for information to be useful there must be a linkage between these users and the decisions they make. This link is a. relevance.
Objective: Identify the roles and hierarchy of the various accounting governing bodies.
3.The Financial Accounting Standards Board employs a “due process” system which a. is an efficient system for collecting dues from members. b. enables interested parties to express their views on issues under consideration. c. identifies the accounting issues that are the most important. d. requires that all accountants must receive a copy of financial standards.
Week Two: Income Statement and Revenue Recognition
* Objective: Prepare single-and multiple-step income statements.
4. The accountant for the Orion Sales Company is preparing the income statement for 2007 and the balance sheet at December 31, 2007. The January 1, 2007 merchandise inventory balance will appear a. only as an asset on the balance sheet.
b. only in the cost of goods sold section of the income statement. c. as a deduction in the cost of goods sold section of the income statement and as a current asset on the balance sheet. d. as an addition in the cost of goods sold section of the income statement and as a current asset on the balance sheet.
Objective: Apply the guidelines for revenue recognition to various business situations.
5. The percentage-of-completion method must be used when certain conditions exist. Which of the following is not one of those necessary conditions? a. Estimates of progress towards completion, revenues, and costs are reasonably dependable. b. The contractor can be expected to perform the contractual obligation. c. The buyer can be expected to satisfy some of the obligations under the contract. d. The contract clearly specifies the enforceable rights of the parties, the consideration to the exchanged, and the manner and terms of settlement.
Week Three: Balance Sheet and Full Disclosure
Objective: Prepare a balance sheet.
6. The basis for classifying assets as current or noncurrent is the period of time normally required by the accounting entity to convert cash invested in a. inventory back into cash, or 12 months, whichever is shorter. b. receivables back into cash, or 12 months, whichever is longer. c. tangible fixed assets back into cash, or 12 months, whichever is longer. d....