Acctng 2291 Final Exam Study Guide
ACCOUNTING 1 FINAL EXAM
Chapter 1
1. Which of the following best describes accounting?
a. is an information system that provides reports to users regarding economic activities and condition of a business.
b. is of no use by individuals outside of the business.
c. records economic data but does not communicate the data to users according to any specific rules.
d. is used only for filling out tax returns and for financial statements for various type of governmental reporting requirements.
2, Which of the following is not a role of accounting in business?
a. To assess the various informational needs of users and design its accounting system to meet those needs.
b. To provide information to other users to determine the economic performance and condition of the business.
c. To provide reports to users about the economic activities and conditions of a business.
d. To personally guarantee loans of the business.
3. Equipment with an estimated market value of $55,000 is offered for sale at $75,000. The equipment is acquired for $20,000 in cash and a note payable of $40,000 due in 30 days. The amount used in the buyer's accounting records to record this acquisition is
a. $55,000
b. $60,000
c. $75,000
d. $20,000
4. A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to
a. increase an asset, increase owner's equity
b. increase an asset, increase a liability c. decrease an asset, decrease a liability (Debit 'Accounts Payable' $7,000 (decreases a liability)
Credit 'Cash' $7,000 (decreases an asset) d. increase one asset, decrease another asset
CHAPTER 2
5. Revenue should be recognized when a. the customer charges an order b. the customer places an order c. the service is performed
d. cash is received
6. A debit signifies a decrease in
a. revenues
b. drawing
c. expenses
d. assets
7. A debit
Chapter 1
1. Which of the following best describes accounting?
a. is an information system that provides reports to users regarding economic activities and condition of a business.
b. is of no use by individuals outside of the business.
c. records economic data but does not communicate the data to users according to any specific rules.
d. is used only for filling out tax returns and for financial statements for various type of governmental reporting requirements.
2, Which of the following is not a role of accounting in business?
a. To assess the various informational needs of users and design its accounting system to meet those needs.
b. To provide information to other users to determine the economic performance and condition of the business.
c. To provide reports to users about the economic activities and conditions of a business.
d. To personally guarantee loans of the business.
3. Equipment with an estimated market value of $55,000 is offered for sale at $75,000. The equipment is acquired for $20,000 in cash and a note payable of $40,000 due in 30 days. The amount used in the buyer's accounting records to record this acquisition is
a. $55,000
b. $60,000
c. $75,000
d. $20,000
4. A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to
a. increase an asset, increase owner's equity
b. increase an asset, increase a liability c. decrease an asset, decrease a liability (Debit 'Accounts Payable' $7,000 (decreases a liability)
Credit 'Cash' $7,000 (decreases an asset) d. increase one asset, decrease another asset
CHAPTER 2
5. Revenue should be recognized when a. the customer charges an order b. the customer places an order c. the service is performed
d. cash is received
6. A debit signifies a decrease in
a. revenues
b. drawing
c. expenses
d. assets
7. A debit