Download ACCT 211-Liberty University EXAM 1, Accounting 211 Exam 2, ACCT 211 EXAM 3 Questions And A and more Exams Accounting in PDF only on Docsity!
Accounting 211 Exam 2, ACCT 211 EXAM 3
Questions And Answers Latest 2025
Importance of Accounting - - - correct answer ✅Identifying, Recording, Communicating Users of Financial Information - - - correct answer ✅1. Internal
- External Internal Users - - - correct answer ✅Internal users of accounting information ARE directly involved in managing and operating an organization. External Users - - - correct answer ✅External users of accounting information are NOT directly involved in running the organization 3 Parts of the Fraud Triangle - - - correct answer ✅Opportunity Rationalization Financial Pressure
Accounting 211 Exam 2, ACCT 211 EXAM 3
Questions And Answers Latest 2025
Principles of Accounting - - - correct answer ✅1. Measurement Principle (or Cost Principle) Accounting information is based on actual cost. Actual cost is considered objective.
- Revenue Recognition Principle a. Recognize revenue when it is earned. b. Proceeds need not be in cash. c. Measure revenue by cash received plus cash value of items received
- Expense Recognition Principle (or Matching Principle): A company must record its expenses incurred to generate the revenue reported.
- Full Disclosure Principle: A company is required to report the details behind financial statements that would impact users' decisions Accounting Assumptions - - - correct answer ✅1.Going-Concern Assumption
Accounting 211 Exam 2, ACCT 211 EXAM 3
Questions And Answers Latest 2025
Partnership - - - correct answer ✅-business entity -not taxed -not limited liability -not legal entity -not unlimited life Corporation - - - correct answer ✅-one owner allowed -business taxed -limited liability -business entity -legal entity -unlimited life Accounting Contraints - - - correct answer ✅1. Materiality: Only information that would influence the decisions of a reasonable person needs to be
Accounting 211 Exam 2, ACCT 211 EXAM 3
Questions And Answers Latest 2025
disclosed. Materiality is a function of the nature of the item and/or dollar amount.
- Benefits exceed cost: The benefits of the information disclosed must be greater than the costs of providing the information. Accounting Equation - - - correct answer ✅Assets = Liability + Equity 4 Financial Statements - - - correct answer ✅1. Income statement — describes a company's revenues and expenses along with the resulting net income or loss over a period of time due to earnings activities.
- Statement of retained earnings— explains changes in equity from net income (or loss) and from any dividends over a period of time.
- Balance sheet — describes a company's financial position (types and amounts of assets, liabilities, and equity) at a point in time.
- Statement of cash flows — identifies cash inflows (receipts) and cash outflows (payments) over a period of time
Accounting 211 Exam 2, ACCT 211 EXAM 3
Questions And Answers Latest 2025
-prepaid accounts -supplies -equipment -buildings Liability Accounts - - - correct answer ✅-accounts payable -notes payable -accrued liabilities -unearned revenue Equity Accounts - - - correct answer ✅+common stock -dividends +revenues -expenses Debit - - - correct answer ✅LEFT SIDE
Accounting 211 Exam 2, ACCT 211 EXAM 3
Questions And Answers Latest 2025
Credit - - - correct answer ✅RIGHT SIDE Accrual Basis - - - correct answer ✅Revenues are recognized when products or services are delivered, and expenses are recognized when incurred. Cash Basis - - - correct answer ✅Revenues are recognized when cash is received and expenses are recorded when cash is paid. NON GAAP Prepaid Expenses - - - correct answer ✅Prepaid expenses are assets paid for in advance of receiving their benefits. Useful Life - - - correct answer ✅-The period of time that an asset is expected to help produce revenues. -Useful life expires as a result of wear and tear, or because it no longer satisfies the needs of the business.
Accounting 211 Exam 2, ACCT 211 EXAM 3
Questions And Answers Latest 2025
Contra-revenue account - - - correct answer ✅An account that offsets revenue.. used to record sales returns and allowances Net sales equation - - - correct answer ✅Gross sales - Sales returns and allowances Ending inventory equation - - - correct answer ✅Beginning inventory + Net purchases + Shipping - COGS Cost of goods sold equation - - - correct answer ✅Beginning inventory + Net purchases + Shipping - Ending inventory Net purchases equation - - - correct answer ✅Ending inventory - Beginning inventory - Shipping
- Cost of goods sold Gross profit equation - - - correct answer ✅Net sales - COGS
Accounting 211 Exam 2, ACCT 211 EXAM 3
Questions And Answers Latest 2025
Gross profit ratio equation - - - correct answer ✅Gross profit / Net sales COGS ratio equation - - - correct answer ✅COGS / Net sales OR MAS-EI=COGS Average unit cost equation - - - correct answer ✅Total cost of goods available for sale / Total # of units available for sale FIFO - - - correct answer ✅First In, First Out, Rotation system that uses the oldest products first LIFO - - - correct answer ✅Last in, first out a. Computation of inventory on July 31, 2016 ( i, e., ending inventory) under LIFO: Total sales equation - - - correct answer ✅Sales price per unit X Number of units sold
Accounting 211 Exam 2, ACCT 211 EXAM 3
Questions And Answers Latest 2025
- Net income will increase When inventory cost per unit decreases... - - - correct answer ✅Total cost can still increase through the purchase of more units of inventory Market value - - - correct answer ✅Equals replacement cost (the cost of replacing inventory) Average inventory equation - - - correct answer ✅Beginning inventory + Ending inventory / 2 Effects of ending inventory being overstated - - - correct answer ✅- Cost of Goods sold overstated, income before taxes overstated, Beginning inventory of next period overstated Effects of ending inventory being understated - - - correct answer ✅Cost of goods sold overstated, income before taxes understated, beginning inventory of next period understated
Accounting 211 Exam 2, ACCT 211 EXAM 3
Questions And Answers Latest 2025
Effects of beginning inventory being overstated - - - correct answer ✅Cost of goods sold overstated, income before taxes understated Effects of beginning inventory being understated - - - correct answer ✅Cost of goods sold understated, income before taxes overstated Accelerated depreciation rate equation - - - correct answer ✅2 / Estimated useful life in years Yearly depreciation expense equation - - - correct answer ✅Book value * Accelerated depreciation rate Depletion rate per unit (Activity method) equation - - - correct answer ✅(Cost of natural resources-Salvage value)/Estimated units of output Depletion rate per year (Activity method) equation - - - correct answer ✅Depletion per unit * Units of output used
Accounting 211 Exam 2, ACCT 211 EXAM 3
Questions And Answers Latest 2025
Treasury stock - - - correct answer ✅Shares that are issued to the public, but then repurchased by the company Authorized shares equation - - - correct answer ✅Issued shares + Unissued shares Issued shares equation - - - correct answer ✅Outstanding shares + Treasury stock Cash received equation - - - correct answer ✅Market value * # of issued shars Common stock value equation - - - correct answer ✅Par value * # of issued stocks Additional paid-in capital equation - - - correct answer ✅Cash received - Common stock value
Accounting 211 Exam 2, ACCT 211 EXAM 3
Questions And Answers Latest 2025
Preferred stock dividend equation - - - correct answer ✅Par value * # of shares * rate Best for tax purposes in a period of decreasing prices - - - correct answer ✅LIFO Best for tax purposes in a period of increasing prices - - - correct answer ✅LIFO Best for tax purposes - - - correct answer ✅High COGS, Low tax expense, low net income Worst for tax purposes - - - correct answer ✅Low COGS, High tax expenses, High net income Accounts unaffected by inventory cost flow assumptions - - - correct answer ✅1. Purchase price of inventory
- Sales price per unit
- Number of units sold
- Total sales
Accounting 211 Exam 2, ACCT 211 EXAM 3
Questions And Answers Latest 2025
3 financial statements long-term assets are found on - - - correct answer ✅1. Balance sheet
- Income statement
- Statement of cash flows Periods of increasing prices ___ is better for tax purposes - - - correct answer ✅FIFO Periods of decreasing prices ____ is better for tax purposes - - - correct answer ✅LIFO Outstanding shares equation - - - correct answer ✅Issued-treasury Contingent Liabilities - - - correct answer ✅probable-recorded as a liability possible-disclose the information in your notes remote-don't record or disclose info
Accounting 211 Exam 2, ACCT 211 EXAM 3
Questions And Answers Latest 2025
Inventory - - - correct answer ✅beginning amount+purchases=goods available goods available goes either to COGS or ending inventory why credit cards are allowed?? - - - correct answer ✅-sales on store credit cards: grant credit to approved customers and to earn interest on any balance past due -sales on bank credit cards:seller doesn't have to decide who gets credit and how much. seller avoids risk of not getting paid. receives cash sooner. amortization - - - correct answer ✅depreciation on intangible items (TM, Copyright, etc) depletion - - - correct answer ✅depreciation on natural resources (ex coal)
