Accounting Final Examination Study Guide

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ACC/561 Final Examination Study GuideThis study guide will prepare you for the Final Examination you will complete in the final week. It contains practice questions, which are related to each week’s objectives. In addition, refer to each week’s readings and your student guide as study references for the Final Examination.

Week One: Financial Reporting and Analysis

Objective: Differentiate between financial statements.

1. The _____ is also called the statement of financial position. a. income statement
b. balance sheet
c. statement of retained earnings
d. statement of cash flows

Objective: Differentiate between financial statements.

2. _____ is the field of accounting that develops information for external decision makers, such as stockholders, suppliers, banks, and government regulatory agencies. a. Auditing
b. Tax accounting
c. Management accounting
d. Financial accounting

Objective: Differentiate between financial statements.

3. The primary users of management accounting information are _____. a. bankers
b. governmental regulatory authorities
c. internal decision makers
d. suppliers

Objective: Evaluate financial statements of nongovernment organizations.

4. The Rebecca Company acquired merchandise inventory costing $10,000 on September 1. The company will not pay for the inventory until October 1. This transaction will affect the Rebecca Company by increasing the merchandise inventory account by $10,000 and by _____. a. increasing the accounts payable account by $10,000

b. decreasing the accounts payable account by $10,000
c. increasing the capital account by $10,000
d. decreasing the capital account by $10,000

Objective: Evaluate financial statements of nongovernment organizations.

5. Etiwanda Company’s accountant recorded a debit to the accounts payable account and a credit to the cash account. This transaction will _____. a. increase cash and decrease accounts payable
b. decrease cash and increase accounts payable
c. increase cash and increase accounts payable
d. decrease cash and decrease accounts payable

Objective: Evaluate financial statements of nongovernment organizations.

6. The accrual basis of accounting recognizes transactions’ effects on financial statements in the period when _____. a. revenues are earned and expenses are incurred
b. cash is received or disbursed
c. the transaction occurs
d. the accounting equation is decreased

Objective: Recognize the major aspects of the regulatory environment.

7. Limited liability means that _____.
a. the corporation’s creditors have claims on only the assets of the corporation and not on the assets of the owners of the corporation b. the creditors of a corporation can receive only up to, and no more than, the amount due to them c. the company is required to pay only current liabilities in the current year and has no obligation to pay long-term liabilities in the current year d. corporations can have liabilities up to only a certain amount due to limits on the company's borrowing capability

Week Two: Apply Financial Information

Objective: Evaluate the financial condition of a company.

8. The accounting convention of _____ guides the significance of an item of financial data in relation to other financial data. a. objectivity
b. cost-benefit
c. conservatism
d. materiality

Objective: Evaluate the financial condition of a company.

9. The accounting convention of _____ permits a company to immediately expense assets, such as a garbage can, with small values and long, useful lives. a. objectivity
b. continuity
c. materiality
d. conservatism

Objective: Evaluate the financial condition of a company.

10. The accounting convention of _____ means selecting the method of measurement that yields the gloomiest immediate results. a. cost-benefit
b. objectivity
c. materiality
d. conservatism

Objective: Evaluate...
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