(New) final exam for acc 421 all correct answers 100%
ACC/421 Final Exam ANSWERS ARE HERE Quality and inexpensive:P.S. Your questions will be chosen randomly from a large setof questions. Nobody can guarantee that these questions willcover completely your exam. If I helped you please leave “A”feedback (I need it very much). Thank you and good luck...1) An accrued expense can best be described as an amountA. not paid and currently matched with earnings.B. not paid and not currently matched with earnings.C. paid and currently matched with earnings.D. paid and not currently matched with earnings.2) When an item of revenue is collected and recorded in advance, it is normally called a(n)___________ revenue.A. cashB. accruedC. prepaidD. unearned3) When an item of expense is paid and recorded in advance, it is normally called a(n)A. cash expense.B. prepaid expense.C. accrued expense.D. estimated expense.4) The information provided by financial reporting pertains toA. an economy as a whole and to members of society as consumers, rather than to individualenterprises or industries.B. individual business enterprises, rather than to industries or an economy as a whole or tomembers of society as consumers.C. business industries, rather than to individual enterprises or an economy as a whole or tomembers of society as consumers.D. individual business enterprises, industries, and an economy as a whole, rather than tomembers of society as consumers.5) The two primary qualities that make accounting information useful for decision making areA. reliability and comparability.B. comparability and consistency.C. materiality and timeliness.D. relevance and reliability.
6) A common set of accounting standards and procedures are calledA. statements of financial accounting concepts.B. financial accounting standards.C. generally accepted accounting principles.D. objectives of financial reporting.7) The Financial Accounting Standards Board (FASB) was proposed by theA. Special Study Group on establishment of Accounting Principles (Wheat Committee).B. American Institute of Certified Public Accountants.C. Accounting Principles Board.D. Study Group on the Objectives of Financial Statements.8) The major distinction between the Financial Accounting Standards Board (FASB) and itspredecessor, the Accounting Principles Board (APB), isA. a majority of the members of the FASB are CPAs drawn from public practice.B. the FASB issues exposure drafts of proposed standards.C. all members of the FASB are fully remunerated, serve full time, and are independent of anycompanies or institutions.D. all members of the FASB possess extensive experience in financial reporting.9) The Financial Accounting FoundationA. works with the Financial Accounting Standards Advisory Council to provide informa-tion tointerested parties on financial reporting issues.B. oversees the operations of the FASB.C. oversees the operations of the AICPA.D. provides information to interested parties on financial reporting issues.10) Which of the following would represent the least likely use of an income statement preparedfor a business enterprise?A. Use by customers to determine a companys ability to provide needed goods and services.B. Use by government agencies to formulate tax and economic policy.C. Use by investors interested in the financial position of the entity.D. Use by labor unions to examine earnings closely as a basis for salary discussions.11) The single-step income statement emphasizesA. the gross profit figure.B. extraordinary items and accounting changes more than these are emphasized in themultiple-step income statement.C. the various components of income from continuing operations.D. total revenues and total expenses.12) Which of the following is not a generally practiced method of presenting the incomestatement?A. Including prior period adjustments in determining net incomeB. The consolidated statement of incomeC. Including gains and losses from discontinued operations of a component of a business indetermining net incomeD. The single-step income statement13) The process of formally recording or incorporating an item in the financial statements of anentity isA. allocation.B. realization.C. recognition.D. articulation.14) Dot Point, Inc. is a retailer of washers and dryers and offers a three-year service contract oneach appliance sold. Although Dot Point sells the appliances on an installment basis, all servicecontracts are cash sales at the time of purchase by the buyer. Collections received for servicecontracts should be recorded as
A. service revenue.B. a reduction in installment accounts receivable.C. a direct addition to retained earnings.D. deferred service revenue.15) In selecting an accounting method for a newly contracted long-term construction project, theprincipal factor to be considered should beA. the terms of payment in the contract.B. the method commonly used by the contractor to account for other long-term construc-tioncontracts.C. the inherent nature of the contractors technical facilities used in construction.D. the degree to which a reliable estimate of the costs to complete and extent of progresstoward completion is practicable.16) The balance sheet contributes to financial reporting by providing a basis for all of thefollowing exceptA. computing rates of return.B. determining the increase in cash due to operations.C. assessing the liquidity and financial flexibility of the enterprise.D. evaluating the capital structure of the enterprise.17) The correct order to present current assets isA. Cash, accounts receivable, prepaid items, inventories.B. Cash, inventories, accounts receivable, prepaid items.C. Cash, inventories, prepaid items, accounts receivable.D. Cash, accounts receivable, inventories, prepaid items.18) The amount of time that is expected to elapse until an asset is realized or otherwiseconverted into cash is referred to asA. solvency.B. exchangeability.C. liquidity.D. financial flexibility.19) Events that occur after the December 31, 2008 balance sheet date (but before the balancesheet is issued) and provide additional evidence about conditions that existed at the balancesheet date and affect the realizability of accounts receivable should beA. discussed only in the MD&A (Managements Discussion and Analysis) section of the annualreport.B. used to record an adjustment directly to the Retained Earnings accountC. used to record an adjustment to Bad Debt Expense for the year ending December 31, 2008.D. disclosed only in the Notes to the Financial Statements.20) The focus of APB Opinion No. 22 is on the disclosure of accounting policies. Thisinformation is important to financial statement readers in determiningA. net income for the year.B. whether the working capital position is adequate for future operations.C. the value of obsolete items included in ending inventory.D. whether accounting policies are consistently applied from year to year.21) Which of the following should be disclosed in a Summary of Significant Accounting Policies?A. Types of executory contractsB. Depreciation method followedC. Claims of equity holdersD. Amount for cumulative effect of change in accounting principle22) Which of the following best characterizes the difference between a financial forecast and afinancial projection?
A. Forecasts include a complete set of financial statements, while projections include onlysummary financial data.B. A forecast includes data which can be verified about future expectations, while the data in aprojection is not susceptible to verification.C. A forecast attempts to provide information on what is expected to happen, whereas aprojection may provide information on what is not necessarily expected to happen.D. A forecast is normally for a full year or more and a projection presents data for less than ayear.23) Companies should disclose all of the following in interim reports exceptA. basic and diluted earnings per share.B. seasonal revenue, cost, or expenses.C. post-balance-sheet events.D. changes in accounting principles.24) A financial forecast per professional pronouncements presents to the best of theresponsible partys knowledge and belief,A. an entitys expected financial position, results of operations, and cash flows.B. an assessment of the companys ability to be successful in the future under a number ofdifferent assumptions.C. given one or more hypothetical assumptions, an entitys expected financial position, results ofoperations, and cash flows.D. an assessment of the companys ability to be successful in the future.25) The payout ratio is calculated by dividingA. dividends per share by earnings per share.B. cash dividends by net income less preferred dividends.C. cash dividends by market price per share.D. cash dividends by net income plus preferred dividends.26) The calculation of the number of times interest is earned involves dividingA. net income by annual interest expense.B. net income plus income taxes by annual interest expense.C. none of these.D. net income plus income taxes and interest expense by annual interest expense.27) The rate of return on common stock equity is calculated by dividingA. net income by average common stockholders’ equity.B. net income less preferred dividends by average common stockholders’ equity.C. net income less preferred dividends by ending common stockholders’ equity.D. net income by ending common stockholders’ equity.28) A company borrows $10,000 and signs a 90-day nontrade note payable. In preparing astatement of cash flows (indirect method), this event would be reflected as a(n)A. addition adjustment to net income in the cash flows from operating activities section.B. cash outflow from investing activities.C. cash inflow from financing activities.D. cash inflow from investing activities.29) An increase in inventory balance would be reported in a statement of cash flows using theindirect method (reconciliation method) as a(n)A. addition to net income in arriving at net cash flow from operating activities.B. deduction from net income in arriving at net cash flow from operating activities.C. cash outflow from financing activities.D. cash outflow from investing activities.30) Of the following questions, which one would not be answered by the statement of cashflows?A. Where did the cash come from during the period?B. What was the cash used for during the period?
C. What was the change in the cash balance during the period?D. Were all the cash expenditures of benefit to the company during the period?