ACC 212Final Exam Study Questions(QUESTIONS ONLY)Winter 20021. In which of the following forms of business organizations is (are) the owner(s) not personally liable for the debts of the business?a. corporationb. partnershipc. proprietorshipd. none of the above2. The relevant measure of value of the assets of a company that is going out of business is its:a. historical costb. recorded valuec. current market valued. book value3. According to the Financial Accounting Standards Board, the primary objective of financial reporting is to provide information useful for makinga. operating and financing decisions.b. investment and operating decisions.c. operating and lending decisions.d. investment and lending decisions.4. The stable-monetary-unit concept is the basis for ignoringa. the effect of inflation in the accounting records.b. fluctuations in the value of the U.S. dollar relative to foreign currencies.c. the possibility that the value of inventory might drop below its historical cost.d. the difference between the appraised value and the actual cost when recording an asset at its actual cost.5. The accounting equation can be stated as:a. Assets = Liabilities + Stockholders' equityb. Assets + Liabilities = Stockholders' equityc. Assets = Liabilities - Stockholders' equityd. Assets + Stockholders' equity = Liabilities6. Economic resources of a business that are expected to be of benefit in the future are referred to as:a. assetsb. stockholders' equityc. expensesd. revenues7. If assets increase $115,000 during a given period and liabilities decrease $25,000 during the same period, stockholders' equity musta. increase $90,000.b. increase $140,000.c. decrease $90,000.d. decrease $140,000.8. If liabilities increase $115,000 during a given period and stockholders' equity decreases $25,000 during the same period, assets musta. decrease $140,000.b. increase $140,000.c. decrease $90,000.d. increase $90,000.9. Net income can be calculated asa. assets minus liabilities.b. assets minus owners' equity.c. expenses minus revenues.d. revenues minus expenses.10. Long-term debt is a liability to be paid back over a period longer thana. one month.b. six months.c. one year.d. ten years.11. Dividends appear on thea. balance sheet.b. income statement.c. retained earnings statement.d. retained earnings statement and the income statement.12. The statement of cash flows is divided into the operating cash flows, theinvesting cash flows, and thea. asset cash flows.b. equity cash flows.c. revenue cash flows.d. financing cash flows.13. Gains and losses appear on thea. balance sheet.b. statement of cash flows.c. retained earnings statement.d. income statement.14. The date of the income statementa. covers a period of time.b. covers one day in time.c. is not dated.d. may cover a period of time or only one day in time.15. Net income isa. deducted from beginning retained earnings on the retained earnings statement.b. deducted from net sales on the income statement.c. added to assets on the balance sheet.d. added to beginning retained earnings on the retained earnings statement.16. When a company records a debt, which type of account is credited?a. liabilityb. retained earningsc. expensed. asset17. All of the following are assets except:a. cashb. notes receivablec. prepaid expensesd. common stock18. Which of the following statements is true?a. Assets are decreased by debits.b. Expenses are decreased by debits.c. Liabilities are decreased by credits.d. Revenues are increased by credits.19. The normal balance of an expense is a __________ while the normal balanceof revenue is a __________.a. debit, debitb. debit, creditc. credit, debitd. credit, credit20. Which of the following is not a credit-balance account?a. inventoryb. common stockc. accounts payabled. retained earnings21. The purchase of office equipment for cash would include aa. debit to office equipment.b. debit to cash.c. credit to accounts payable.d. credit to office equipment.22. Purchasing a truck by signing a note payable would include aa. credit to truck.b. credit to note payable.c. debit to note payable.d. debit to an expense account.23. The entry to record the purchase of office supplies for $100 cash would be:a. Office supplies 100 Cash 100b. Accounts Payable 100 Cash 100c. Office supplies 100 Accounts Payable 100d. Cash 100 Office supplies expense 10024. A trial balance isa. a list of all accounts with their balances.b. a list of income statement accounts with their balances.c. a list of balance sheet accounts with their balances.d. prepared before the posting process is completed.25. When a business sells inventory in exchange for cash, which of the following accounts is credited?a. cashb. revenuec. owners' equityd. accounts payable26. Purchasing supplies for cash woulda. increase total assets.b. decrease total assets.c. increase total liabilities and stockholders' equity.d. have no effect on total assets.27. The purchase of land for cash woulda. increase total assets.b. decrease stockholders' equity.c. not affect the total of debits or credits on the trial balance.d. increase the total debits on the trial balance.28. An owner investment of a building, valued at $100,000 with an $85,000 outstanding mortgage, into the business woulda. increase assets by $15,000.b. increase stockholders' equity by $15,000.c. increase assets by $85,000.d. increase stockholders' equity by $100,000.29. A debit increases the balance ofa. assets and liabilities.b. assets and stockholders' equity.c. liabilities and expenses.d. assets and expenses.30. A credit decreases the balance ofa. assets and liabilities.b. liabilities and expenses.c. expenses and assets.d. assets and stockholders' equity.31. An accountant operating under the accrual basis of accounting performs a service but does not receive any cash. The entry will require a credit toa. service revenue.b. deferred expense.c. unearned expense.d. unearned service revenue.32. The debt ratio is computed bya. dividing current liabilities by total assets.b. dividing total assets by total liabilities.c. dividing total liabilities by total assets.d. dividing total assets by current liabilities.33. The accounting principle which serves as the basis for determining when to record expenses is thea. matching principle.b. revenue principle.c. full disclosure