Comprehensive ACG 2021 Q&A Exam Bundle

Association of Certified Fraud Examiners (ACFE) Largest antifraud organization Occupational Fraud Use of one's occupation for personal enrichment through deliberate misuse or misapplication of the employing organization's resources. Internal Controls 1. Safeguard company's assets 2. Improve acc...

Bank Statement a document the bank prepares to report the changes in the depositor's cash account for a period of time. It shows the beginning bank account balance, lists the month's cash transactions, and shows the ending bank account balance. Bank Collection Collection of money by the bank on b...

Determining inventory quantities with a perpetual inventory system 1. Check accuracy of inventory records 2. Determine amount of inventory lost due to wasted raw materials, shoplifting, employee theft, etc. Determining inventory quantities with a periodic system 1. Determine the inventory on hand 2...

Capital Lease Lessees show the asset and liability on the balance sheet. Depreciable Cost Cost - Salvage Value Annual Deprecation Expense: Straight Line (Cost - Salvage Value)/Useful Life Annual Deprecation Expense: Double-Declining Current Year Value * (2 * (1/Expected Useful Life)) What will m...

Accrual Accounting Records the impact of a business transaction as it occurs. Transactions are recorded even if the business does not pay or receive cash. Cash-basis Accounting Records only cash transactions (cash receipts and payments). Receipts are treated as revenues and payments as expenses. T...

Components of the operating cycle of a merchandising company - purchasing inventory for cash - selling inventory to a customer - receiving cash from a customer - paying for inventory NOT PAYING INTEREST ON A BANK LOAN, PAYING A DIVIDEND, OR PAYING RENT ON A WAREHOUSE USED TO STORE INVENTORY Compon...

A company purchased equipment and incurred these costs: Cash price, $26,000 Sales taxes, $1,200 Insurance during transit, $400 Annual maintenance costs, $500 What amount should be recorded as the cost of the equipment? ($26,000 + $1,200 + $400 = $27,600) =$27,600 ***The $500 annual maintenance cos...

Internal Controls a company's plan to 1) Safeguard the company's assets, and 2) Improve the accuracy and reliability of accounting information. (4) Framework for Internal Controls a framework to be used when designing internal controls systems including the control environment, risk assessment, c...

Notes Payable Liabilities that result from issuing a note promising future payment on a specific maturity date. If the maturity date is beyond one year or operating cycle, whichever is longer then the note payable is a long-term liability. Notes usually require the payment of interest. Bonds Payabl...

Definition of a merchandising company -They are wholesalers and retailers -They sell inventory in the wholesale market or to the final customers in the retail market -They sell PRODUCTS to earn revenue instead of services How to calculate cost of goods sold Gross Profit=Net Sales-Cost of Goods Sold...

If the assets of a company are $4,000,000 and its total liabilities equal $1,500,000, then total common stock equals $2,500,000. false, A=L+SE(SE+CS+RE) therefore, this could only be true if RE =$0 The resources (assets) that the company owns are reported on the balance sheet. True The accounting ...

Operating activities the cash activities that create revenues or expenses in the entity's major line of business Inflows: -cash collected from customers -dividends received -interest received Outflows: -cash paid to suppliers -cash paid to employees -cash paid for interest -cash paid for income t...

Identifying Select transactions and events Recording input, measure, and log Communicating prepare, analyze, and interpret External Users Persons using accounting information who are not directly involved in running the organization. EX. Lenders, shareholders, governors, consumer groups, external...

The sole proprietorship form of business organization must have only one owner. Which of the following is considered to be an internal user of accounting data for a given business? Management Which of the following is the most appropriate definition of accounting information? The information syste...

FIFO The _______ inventory costing method produced the lowest cost of goods sold. LIFO The _______ inventory costing method produced the highest cost of goods sold. gross profit sales - cost of goods sold = ? lower of cost or market inventory is listed on the balance sheet at custody and...

Revenue Recognition Principle companies recognize revenue in the accounting period in which the performance obligation was satisfied. Expense Recognition Principle matches expenses with revenues in the period in the period when the company makes effort to generate those revenues Cash-Basis Acc...

Accounting is the information system that A. measures business activity. B. communicates the results to decision makers. C. processes information into reports. D. All of the above all of the above Which of the following is not an external user of a business's financial information? A. Taxing autho...

What are three factors that contribute to fraudulent activity? 1. opportunity 2. financial pressure 3. rationalization Sarbanes-Oxley Act -applies to policy trade U.S. corporations -required to maintain a system of internal control with the help of internal auditors who also monitor its effectivene...

In a period of inflation, the costs allocated to ending inventory will approximate their current cost if a. the FIFO method is used b. the LIFO method is used c. the average method is used d. all of these a. the FIFO method is used In a period of inflation, the inventory cost flow method that resul...

Accounting the information system that shows the economic events of a corporation. This system identifies, records, and communicates all the info to intrested parties such as stockholders. Internal Users people within the company-marketing department, management dept, finance dept, ceo, cfo, cmo Ext...

A retail shop has been operating as a sole proprietorship. The business is growing and now the owner wants to incorporate. Which of the following is not a valid reason for this owner to incorporate? a.) The owner want to be able to more easily transfer ownership of the business. b.) The owner wants...

Which of the following is true with regards to the forms of business organization? Partnerships and their owners generally receive more favorable tax treatment than corporations Which statement about users of accounting information is correct? Creditors are considered external users Which of the f...

Accounting Equation Assets = Liabilities + Owner's Equity MUST BE BALANCED Generally Accepted Accounting Principles (GAAP) Financial accounting is governed by concepts and rules known as generally accepted accounting principles (GAAP). GAAP aims to make information relevant, reliable, and compara...

Financial Accounting information for external user such as investors, creditor (banks), or the government Managerial Accounting Information for internal users such as managers and employees. Corporation a business owned by Shareholder (issue stock) -Advantages: easy to transfer ownership (buy/ sel...

Under which of the following do computer programs that limit unauthorized access to certain files fall? physical controls Which of the following is an effective internal control over cash disbursements? -The use of pre-numbered checks -The storage of blank checks in a secure place -The separation o...

Financial Accounting 1. Measure business activity 2. Communicate measurements to people for decision making Primary external users of financial accounting info Investors and creditors Financing Activities Involves funding from external sources such as, owners of company who invest their own funds ...

What financial statement is for a specific date? Balance Sheet ___ users are concerned with Financial Accounting External T: RWS is started when it receives cash of $5,000 from investors in exchange for common stock Dr. Cash, $5,000 Cr. Common Stock, $5,000 CF: 5,000, FIN T: RWS borrows $1,000 fr...