Acc 201 Sample Final

ACC 201

Sample Final Exam Questions

1. Which of the following transactions will cause both the left and right side of the fundamental accounting equation to increase?

A. We collect cash from a customer who owed us money

B. We pay a supplier for inventory we previously bought on account

C. We borrow money from the bank

D. We purchase equipment for cash

E. None of the above will cause both sides of the equation to increase

2. As of 12/31/12, Alamo Autoworks, Inc. is involved in a lawsuit related to work performed in 2012. It is probable that the jury will find in favor of the plaintiff and Alamo will owe $2,000,000. Even though the trial is not yet complete, Alamo should:

A. Only disclose the possibility of losing $2,000,000 in a footnote to its 2012 financial statements.

B. Report a $2,000,000 liability on its 2012 balance sheet and a $2,000,000 loss on its 2012 income statement.

C. Report a $2,000,000 liability on its 2012 balance sheet but report nothing related to the lawsuit on its 2012 Income statement.

D. Report a $2,000,000 loss on its 2012 income statement but report nothing related to the lawsuit on its 2012 balance sheet.

3. Shelley's Steel Company had the following transactions during 2012, its first year of operations.

* On 1/l/12 sold 10,000 shares of no par common stock for $200,000 cash

* On 4/l/12 paid $60,000 cash to repurchase 2,000 shares of its common stock

* On 12/20/12 declared and paid cash dividends of $32,000

* Shelley's reported net income of $75,000 on its 2012 income statement

What amount of total stockholders' equity did Shelley's report on its 12/31/12 balance sheet?

A. $175,000

B. $183,000

C. $140,000

D. $243,000

4. During 2012, Sheila's Sporting Goods had only the following transactions:

* Sold inventory originally costing $5,000 for $12,000 cash

* Incurred rent expense of $1,000; as of 12/31/12, only $800 has been...