1. ACCT 211 FINAL EXAM
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ACCT 211 FINAL EXAM
50 Questions with Answers
1) Off-the-shelf accounting software is not adequate to meet the needs of small
businesses.
2) An advantage of online processing is up-to-date databases.
3) A company issued a check for $7,900 in payment of the salaries expense for
the last half of the month. Identify the journal the transaction would be recorded
in.
4) 4 Equipment, inventory, and investments are other accounts that can include
detailed information in a subsidiary ledger.
5) The difference in the sales journal between the perpetual and periodic
inventory systems is that a column is used to record cost of goods sold and
inventory amounts for each sale under the perpetual system but not the periodic
system.
6) To be sure that total debits and credits in a columnar journal are equal, before
posting we should:
7) A procedure called direct posting of sales invoices can substitute for the sales
journal. Answer
8) An accounts receivable ledger is:
9) On a bank statement, deposits are listed as debits because the bank
increases its cash account when the deposit is made.
10) On a bank reconciliation, the amount of an unrecorded bank service charge
should be:
11) The internal document that is prepared to notify the appropriate persons that
ordered goods have been received and describes the quantities and condition of
the goods is the
12) Cash equivalents are short-term highly liquid investment assets that are
readily converted to a known cash amount, and have maturities of one year.

2. 13) Technologically advanced accounting systems do not need monitoring for
errors because computers always process transactions correctly.
14) The journal entry for petty cash reimbursement involves a debit to the
appropriate expenses and a credit to Petty Cash.
15) Factors that cause the bank statement balance for a checking account to be
different from the company's checking account balance include: outstanding
checks, deposits in transit, deductions for bank fees, additions for interest, and
errors.
16) An invoice is an itemized statement of goods prepared by the vendor listing
the customer's name, items sold, sales prices, and terms of sale.
17) After adjustment, the balance in the Allowance for Doubtful Accounts has the
effect of reducing accounts receivable to its estimated realizable value.
18) The aging of accounts receivable involves classifying each account
receivable by how long it is past its due date and estimating the percent of each
uncollectible class.
19) The person that borrows money and signs a promissory note is called the
payee.
20) The process of using accounts receivable as security for a loan is known as
factoring accounts receivable.
21) Since pledged accounts receivables only serve as collateral for a loan and
are not sold, it is not necessary to disclose the pledging.
22) Failure by a promissory note's maker to pay the amount due at maturity is
known as:
23) A dishonored note receivable is usually reclassified as an account
receivable.
24) When using the allowance method of accounting for uncollectible accounts,
the entry to record the bad debts expense is a debit to Bad Debts Expense and a
credit to Accounts Receivable.
25) A method that charges the same amount of expense to each period of the
asset's useful life is called:
26) Extraordinary repairs are expenditures extending the asset's useful life
beyond its original estimate, and are capital expenditures because they benefit
future periods.
27) Total asset turnover is calculated by dividing:

3. 28) The units-of-production method of depreciation charges a varying amount of
expense for each period of an asset's useful life depending on its usage.
29) Amortization:
30) Total asset cost plus depreciation expense equals book value.
31) Capital expenditures are also called balance sheet expenditures.
32) Plant assets are used in operations and have useful lives that extend over
more than one accounting period.
33) Promissory notes are nonnegotiable meaning that they cannot be transferred
from party to party.
34) Contingent liabilities must be recorded if:
35) The full disclosure principle requires the reporting of contingent liabilities that
are reasonably possible.
36) Companies with many employees often use a special payroll bank account to
pay employees.
37) A merit rating:
38) Contingent liabilities can be:
39) Debt guarantees are not usually disclosed as a contingent liability.
40) A potential lawsuit claim is recorded when the claim can be reasonably
estimated and it is reasonably possible.
41) A table that shows the amount of federal income tax to be withheld from an
employee's pay is the:
42) A capital deficiency means that:
43) When a partner is added to a partnership:
44) The statement of changes in partners' equity shows the beginning balance in
retained earnings, plus investments, less withdrawals, the income or loss and the
ending balance in retained earnings.
45) When a partnership is liquidated:
46) A partnership in which all partners have mutual agency and unlimited liability
is called:

4. 47) Partners in a partnership are taxed on the amounts they withdraw from the
partnership, not the partnership income.
48) The withdrawals account of each partner is closed to retained earnings at the
end of the accounting period.
49) In the absence of a partnership agreement, the law says that income (and
loss) should be allocated based on:
50) A capital deficiency can arise from liquidation losses, excessive withdrawals
before liquidation, or recurring losses in prior periods.