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ACC 112 Final Exam Review (Spring Only) Flashcards | StudBud
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ACC 112 Final Exam Review (Spring Only)
ACC 112 Final Exam Review (Spring Only)
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1
Investments that a company actively manages and trades for profit are referred to as
Liquid securiies
Available-for-sale securities
Trading securities
Held to Maturity Securities
2
The primary objective of financial accounting is to...
Serve the decision-making needs of the internal users
Know what, when, and the amount of each transaction
Provide accounting information that serves external users.
monitor and control company activitites
3
The ability to meet short-term obligations and to efficiently generate revenues is called
Price earnings
Solvency
Liquidity and efficiency
Profitability
4
External users of financial information
Make operating decisions for a company
Make strategic decisions for the company
Are not directly involved in operating the company
Include internal auditors and consultants
5
Jeremy Inc. purchased the bonds below and intends to hold them until maturity. What is the JE to record the purchase?
Debit Cash $169,333, credit Long-Term Investments HTM $169,333
Debit Short-Term Investments HTM $160,000, credit Cash $160,000
Debit Short-Term Investments HTM $169,333, credit Cash $169,333
Debit Long-Term Investments HTM $160,000, credit Cash $160,000
6
Which section of the cash flow statement would a company report the purchase of equipment for cash?
Schedule of noncash investing or financing activities
Financing Activities
Investing Activities
Operating Activities
7
The ability to generate future revenues and meet long-term obligations is referred to as:
Market Prospects
Profitability
Liquidity and efficiency
Solvency
8
The private-sector group that currently has the authority to establish GAAP is
SEC
FASB
AAA
AICPA
9
A company declared a $2 per share dividend. How much will the Company pay out?
$23,000
$46,000
$34,000
$80,000
10
Trading securities are
Reported at fair value on the balance sheet
Reported at historical cost
Recorded at cost and amortized over the life of the security
Intended to be held for the long term
11
A decrease in the fair value of a security that has not been sold is called
realized loss
market loss
unrealized loss
contingent loss
12
What is the semi-annual interest payments on $550,000, 20-year bonds with a stated rate of 9% and market rate of 8%
$22,000
$44,000
$24,750
$49,500
13
Financial statements in which each statement amount is expressed as a percentage of a base amount is called
Sales comparative statements
Common-size comparative statements
General-purpose financial statements
Asset comparative statements
14
Stock that was issued and reacquired by the issuing corporation is called...
Capital Stock
Common Stock
Preferred Stock
Treasury Stock
15
A corporation sold 14,000 shares of its $1 par value stock at $13. The journal entry includes
A credit to Common Stock for $14,000
A debit to Cash for $14,000
A debit to Paid in Capital for $182,000
A credit to Common Stock for $182,000
16
The Accrual basis of accounting...
Eliminates the need for adjusting entries
Recognizes expenses when paid in cash
Recognizes revenues when received in cash
Is generally accepted for external reporting
17
Investments in trading securities
Are reported at their cost, not matter what their market value is
Include only equity securities
Are long-term investments
Are reported as current assets
18
What is the accrued interest on December 31 for the bonds indicated.
$6,000
$18,000
$16,000
$5,333
19
BBB Inc. sold 26,000 of it's $1 par value common stock for $15 per share. The journal entry would be
Journal Entry #1
Journal Entry #2
Journal Entry #3
Journal Entry #4
20
What should a company record when it's $80,000 available for sale investment's FMV is $77,500
A loss on sale of investment of $2,500
A gain on sale of investment of $2,500
No Entry, AFS securities are NOT held at FMV
An unrealized loss of $2,500
21
The board of directors of a corporation...
are responsible for managing corporate activities
do not have the power to bind the corporation to contracts
are responsible for day-to-day operations
are elected by the corporate registrar
22
This requires a company to record its expenses in the same period as the revenue it helped to earn
Measurement (Cost) Principle
Going-concern assumption
Expense recognition (Matching) Principle
Business entity assumption
23
Retained Earnings...
Generally consists of cumulative Net Income less losses and divdends
Represents the amt shareholders are guaranteed to receive upon liquidation
Generally consists of all cash plus net income less any accounts payable
Represents an amount of cash available to pay shareholders
24
The formula to compute annual straight-line depreciation is
(Cost plus salvage value) divided by the useful life in years
Cost divided by useful life in units
(Cost minus salvage value) divided by the useful life in years
Depreciable cost divided by useful life in units
25
Smite Company considers issuing $5M in bonds with a contract rate of 7%. What would be the debt to equity ratio impact?
Increase from .45 to .56
Increase from .93 to 1.08
Increase from .84 to 1.04
decrease from 2.19 to 1.77
26
A change in an accounting estimate
is considered an error and must be corrected in prior years
is not allowed under GAAP
Is reflected in current and future financial statements, but not past years
Only occurs with cash transactions
27
All of the following can be included as held to maturity securities except.
Installment Notes
Bonds
2 year Certificate of Deposits
Stock
28
Statement of cash flows reports...
All cash collected from accounts receivable and gains on cash sales
The Change in owner's equity.
Equity, net income, and dividends
Cash inflows and cash outflows for an accounting period
29
The question of when revenue should be recognized reflects the...
Revenue recognition principle
Business entity assumption
Measurement (Cost) principle
Going-concern assumption
30
Net income divided by net sales is the
Total asset turnover
Profit Margin
Days' sales in inventory
Return on total assets
31
Total cost of an asset less its accumulated depreciation is called
Replacement Cost
Book Value
Market Value
Historical Value
32
Based on the orginal movie (Episode IV) that was not tampered with later on, who shot first, Han or Greedo?
Han was the only person to fire, killing Greedo.
The both fired at the same time, Han won.
Greedo shot first missing Han and paying for it with his life
Han shot first, dodging Greedo's shot
33
The comparison of a company's financial condition and performance to a base amount is known as
Risk analysis
Horizontal ratios
Financial reporting
Vertical analysis
34
The approach to preparing Financial Statements based on recognizing revenues when earned and matching expenses is
Cash Basis Accounting
Revenue Basis Accounting
Expense recognition (matching) principle
Accrual Basis Accounting
35
The investee company in a long term investment with controlling interest is called the
Creditor
Parent
Subsidiary
Owner
36
All of the following are sections of the Cash Flow Statement except...
Reconciliation of beginning cash to ending cash.
Cash Flow from Operating Activities
Cash Flow from Innovative Activities
Cash Flow from Financing Activities
37
Three of the most common tools of financial analysis are...
Horizontal analysis, Trend analysis, multi-year analysis
Vertical analysis potential analysis, and horizontal analysis
Horizontal analysis, Financial analysis, vertical analysis
Vertical analysis, horizontal analysis, and ratio analysis
38
Accounting for long-term investments in equity securities with controlling influence uses the
Investor method
Controlling method
Equity method with consolidation
Investment method
39
Which of the following is NOT a plant asset
Machinery and Equipment
Patent
Land
Buildings
40
RIP Corp. owns 2,000 of WRJ Corps 50,000 outstanding shares. WRJ pays $4 per share in cash dividends. The JE is
Debit Cash $8,000 credit Dividend Revenue $8,000
Debit Cash $8,000 credit Long-Term Investments $8,000
Debit Long-Term Investments $8,000, credit Cash $8,000
Debit Dividend Revenue $8,000, credit Cash $8,000
41
Which accounts would be found in the stockholders equity section of a balance sheet?
Paid-in capital and sales discounts
Paid-in capital and retained earnings
Long-term investments and accounts payable
Retained earnings and cash
42
Ink Inc. reported current assets of $43,000 and current liabilities of $39,090. The current ratio is...
.4:1 (read .4 to 1)
1.1:1 (read 1.1 to 1)
.3:1 (read .3 to 1)
1:1 (read 1 to 1)
43
A corporation reported cash of $14,000 and total assets of $178,300. Cash's common size percent is...
7850%
7.85%
1273%
12.73%
44
How do you classify an actively managed investment owning 10% of a another company's common stock?
Controlling Influence Securities
Held to Maturity Securities
Available-for-sale Securities
Trading Securities
45
Activities that involve the production of merchandise and sale of goods is classified as...
Operating Activities
Financing Activities
Investing Activities
Indirect Activities
46
The Comparison of a company's financial condition across time
Potential analysis
Horizontal analysis
Financial analysis
Vertical analysis
47
Considering the following information, what is the ending balance of Retained Earnings:
$521,250
$771,250
$271,250
$371,250
48
The accounting principle that requires important noncash activities be reported on the statement of cash flows.
Business entity principle
Going concern principle
Full disclosure principle
Materiality principle
49
The controlling investor is called the...
Subsidiary
Investee
Parent
Owner
50
The number of shares that a corporation charter allows it to sell is called
Outstanding Stock
Authorized Stock
Issued Stock
Preferred Stock
51
Partnership accounting is the same as accounting for...
A corporation, except for the retained earnings account.
A corporation, except for the receivables accounts
An S corporation, except for the the asset accounts
A sole proprietorship, except for partner capital and withdrawal accounts
