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ACC280-Final Exam

# ACC280-Final Exam - Principles of Accounting ACC 280 Final...

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Principles of Accounting – ACC 280 Final Examination Due Week 5 Day 7 1. (2 Points) Internal transactions do not affect the basic accounting equation because they are economic events that occur entirely within one company. (2 Points) A) True B) False 2. (2 Points)A debit to an account indicates an increase in that account. A) True B) False 3. (2 Points)The double-entry system is a logical method for recording transactions and results in equal debits and credits for each transaction. A) True B) False 4. (2 Points)Income will always be greater under the cash basis of accounting than under the accrual basis of accounting. 5. (2 Points)Adjusting entries are not necessary if the trial balance debit and credit columns balances are equal. 6. (2 Points)Closing entries are not needed if the business plans to continue operating in the future and issue financial statements each year. 7. (2 Points)The matching principle dictates that expenses be recognized when cash is paid or when the work is performed. A) True B) False 8. (2 Points)The cost of inventory is expensed in the accounting period when the inventory is sold to a customer. 9. (2 Points)Vertical analysis is useful in making comparisons of companies of different sizes.

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10. (2 Points)A segregation of duties among employees eliminates the possibility of collusion. 11. (3 Points) The accounting equation for Goodboys Enterprises is as follows: Assets Liabilities Stockholders' Equity \$120,000 = \$60,000 + \$60,000 If Goodboys purchases office equipment on account for \$12,000, the accounting equation will change to: Assets Liabilities Stockholders' Equity a. \$120,000 = \$60,000 + \$60,000 b. \$132,000 = \$60,000 + \$72,000 c. \$132,000 = \$66,000 + \$66,000 d. \$132,000 = \$72,000 + \$60,000
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ACC280-Final Exam - Principles of Accounting ACC 280 Final...

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