ACG 2021 Final Exam Questions and
100% Correct Answers
The partnership form of business organization ✅is tax advantaged in comparison to a
corporation
Which of the following is not an asset? ✅Accounts Payable
Which of the following describes that sequence in which financial statements are
prepared? ✅Income statement, Retained earnings statement, and Balance sheet
In the annual report, where would a financial statement reader find out if the company's
financial statements give a fair depiction of its financial position and operating results?
✅Auditor's report
A company has the following accounts and balances:
Accounts payable- $40,000
Accounts receivable- $70,000
Accumulated depreciation- $50,000
Buildings- $500,000
Cash- $100,000
Common stock- $690,000
Equipment- $120,000
Inventory- $200,000
Investment in bonds- $20,000
Land- $150,000
Notes payable- $300,000
Patents- $10,000
Prepaid insurance- $20,000
Retained earnings- $150,000
Trademarks- $40,000
What are its current assets and property, plant, and equipment? ✅$390,000 and
$720,000
Which of the following would increase a company's current ratio? ✅Negotiate with a
creditor to reclassify a note payable in 3 months into a note payable due in 2 years
The effects of performing services for cash on the basic accounting equation are to
✅Increase assets and increase stockholders' equity
, If a transaction affected two accounts and total assets decreased by $4,000, then
✅Total liabilities must have decreased by $4,000 or total stockholders equity must
have decreased by $4,000
At the start of the current year, investors contribute $10,000 to a newly formed
corporation. During the year, the corporation earned revenues of $45,000, paid
expenses of $22,000, and paid dividends to the owners of $5,000. It also borrowed
$10,000 by issuing a note. At the end of the year, the balance in retained earnings will
be ✅$18,000 credit
Which of the following is the sequence of events for the recording process?
✅Journalize, post, prepare a trial balance
In its first year, a company performed services for a customer and billed the customer
$14,000. In the second year, the customer pays the company for the services rendered
in the first year. In the first year, the company incurred and paid $6,000 of wage
expense. If the company uses the accrual-basis of accounting, then it will report
✅Revenue of $14.000 and expense of $6,000 in the first year
Payments from customers received before performing service for the customers are
recorded as ✅Liabilities
A corporation began the year with $3,500 of supplies on hand and recorded as assets.
On the last day of the accounting period, there are $1,100 of unused office supplies on
hand. What should the accountant do? ✅Debit supplies expense for $2,400 and credit
Supplies for $2,400
Accrued expenses are expenses incurred that are not yet paid or recorded. An adjusting
entry made to record an accrued expense ✅Debits an expense account and credits a
liability account
Which of the following accounts appears on the adjusted trial balance with its beginning
balance but appears on the balance sheet with its ending balance? ✅Retained
earnings
A corporation uses a perpetual inventory system. It purchased $3,000 of merchandise
on August 2 o account with terms of 1/10, n/30. It returned $250 of the merchandise of
August 4. It pays on August 12. Which of the following is part of the journal entry it
records when it pays on August 12? ✅Credit inventory for $27.50
A corporation has the following:
Sales revenue- $430,000
Sales returns and allowances- $20,000
Sales discounts, $10,000
Cost of goods sold- $310,000
