Accounting 200 Final Exam (Ch. 7 - 14)
questions and answers 2025/2026 latest
update
1.On November 1, Year 1 Cove Company borrowed $7,000 cash to from Shelter Company. The one-year
note carried a 7% rate of interest. Which of the following shows how the loan will affect Cove's financial
statements on November 1, Year 1? - answerBalance Sheet:
Assets = Liabilities + Equity
7000 = 7000 + NA
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Income Statement:
Revenue − Expense = Net Income
NA -NA = NA
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Statement of Cash Flows:
7,000 FA
2.Accrued interest expense will appear on the income statement but not on the statement of cash flows.
This statement is... (true or false?) - answerTrue
3.Clayton Company borrowed $6,000 from the State Bank on April 1, Year 1. The one-year note carried a
6% rate of interest. The amount of interest expense that Clayton would report in Year 1 and Year 2,
respectively would be... - answer$270, and $90.
4.On August 1, Year 1 Gomez Company borrowed $48,000 cash. The one-year note carried a 5% rate of
interest. Which of the following shows how the December 31, Year 1 recognition of accrued interest will
effect Gomez's financial statements? - answerBalance Sheet:
Assets = Liabilities + Equity
NA = 1,000 + (1,000)
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Income Statement:
Revenue − Expense = Net Income
