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Unformatted text preview: Final Exam ACC 280 – Principle of Accounting Part I II III Total Points 5 5 5 15 Score PART I — MULTIPLE CHOICE (12 points) (respond to any 28 out of the 56 questions) Instructions Designate the best answer for each of the following questions. __ b _ 1. One of the two constraints in accounting is a. comparability. b. materiality. c. reliability. d. relevance. __ b _ 2. The necessity of making adjusting entries relates mostly to the a. economic entity assumption. b. time period assumption. c. going concern assumption. d. monetary unit assumption. __ d __ 3. The preparation of closing entries a. is an optional step in the accounting cycle. b. results in zero balances in all accounts at the end of the period so that they are ready for the following period's transactions. c. is necessary before financial statements can be prepared. d. results in transferring the balances in all temporary accounts to Retained Earnings. __ c __ 4. The primary accounting standard-setting body in the United States is the a. Securities and Exchange Commission. b. Accounting Principles Board. c. Financial Accounting Standards Board. d. Internal Revenue Service. ____ 5. Which of the following combinations presents correct examples of liquidity, profitability, and solvency ratios, respectively? Liquidity Profitability Solvency a. Inventory turnover Inventory turnover Times interest earned b. Current ratio Inventory turnover Debt to total assets c. Receivable turnover Return on assets Times interest earned d. Average days collection Payout ratio Return on assets ACC 280 – Principles of Accounting ____ 6. Which of the following pairs of terms in the area of financial statement analysis are synonymous? a. Ratio — Trend b. Horizontal — Trend c. Vertical — Ratio d. Horizontal — Ratio __ a __ 7. Which of the following should be classified as an extraordinary item? a. Effects of major casualties not infrequent in the area b. Write-off of a significant amount of receivables c. Loss from the expropriation of facilities by a foreign government d. Losses due to a bitter, lengthy labor strike __ c ___8. The accounting process involves all of the following except a. identifying economic transactions that are relevant to the business. b. communicating financial information to users by preparing financial reports. c. recording nonquantifiable economic events. d. analyzing and interpreting financial reports. __ c __ 9. Which of the following would not be considered internal users of accounting data for a company? a. The president of a company b. The controller of a company c. Creditors of a company d. Salesmen of the company __ d ___10. Which one of the following is not an external user of accounting information?...
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This note was uploaded on 11/27/2010 for the course ACC ACC 280 taught by Professor Susan,s. during the Spring '10 term at University of Phoenix.
- Spring '10