Acc 201 final - ACC 201 Sample Final Exam Questions 1....

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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 12/31/07, Alamo Autoworks, Inc. is involved in a lawsuit related to work performed in 2007. 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 comlete, Alamo should: A. only disclose the possibility of losing $2,000,000 in a footnote to its 2007 financial statements. B. report a $2,000,000 liability on its 2007 balance sheet and a $2,000,000 loss on its 2007 income statement. C. report a $2,000,000 liability on its 2007 balance sheet but report nothing related to the lawsuit on its 2007Income statement. D. report a $2,000,000 loss on its 2007 income statement but report nothing related to the lawsuit on its 2007 balance sheet. 3. Shelley's Steel Company had the following transactions during 2007, its first year of operations. * On 1/l/07sold 10,000 shares of no par common stock for $200,000 cash * On 4/l/07 paid $60,000 cash to repurchase 2,000 shares of its common stock * On 12/20/07 declared and paid cash dividends of $32,000 * Shelley's reported net income of $75,000 on its 2007 income statement What amount of total stockholders' equity did Shelley's report on its 12/31/07 balance sheet? A. $175,000 B. $183,000 C. $140,000 D. $243,000 1
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4. During 2007, 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 12/31/07, only $800 has been paid * Received $2,000 cash in advance from customers for merchandise that will be shipped next year * Paid $3,000 cash to employees for wages, $400 of which was earned during the previous year (there are no unpaid wages as of the end of the current year) Based on the above information, what was Sheila's accrual net income for 2007? A. $5,400 B. $3,400 C. $6,000 D. $8,600 5. Which one of the following statements is TRUE regarding the logical order of financial statement preparation? A. The income statement is prepared after the statement of retained earnings. B. The statement of retained earnings is the first statement prepared. C. The statement of retained earnings must be prepared before the balance sheet can be prepared. D. The balance sheet must be prepared before the income statement can be prepared. 6. Which of the following errors would most likely lead to an overstatement of income this year? A.
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Acc 201 final - ACC 201 Sample Final Exam Questions 1....

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