Accounting exam (Graded A+) - use as a guide only - 18687

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Name and briefly describe each of the four financial statements.

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2.

Briefly distinguish between financial accounting and managerial accounting.

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3.

Describe the difference between temporary and permanent accounts, and state which ones are closed. Describe the purpose of the closing process.

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4.

Explain the meaning of the term, "matching concept."

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5.

Explain the significance of the return on equity ratio. Who (what category or type of financial statement users) would normally be most interested in this ratio?

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6.

What is financial leverage? What financial ratio can be increased by using financial leverage?

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7.

Discuss the major differences between a perpetual inventory system and a periodic inventory system.

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8.

Why are cash discounts given, and who benefits by these discounts?

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9.

Define the terms FIFO and LIFO.

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10.

List the specific steps used in computing the estimated inventory balance using the gross margin method.

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11.

List the measures that a business can use to achieve strong internal controls.

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12.

Petty cash funds are maintained on an imprest basis. Explain the advantage of using the imprest basis in accounting for petty cash.

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13.

Rolla Company was founded in 2010. It acquired $30,000 cash by issuing stock to investors and an additional $20,000 cash by borrowing from creditors. During 2010 it received $15,000 cash revenues and paid $22,000 in cash expenses. The company then went out of business.What amount of cash should Rolla Company have had on hand immediately before going out of business?

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14.

Why would a merchandising company need good internal controls related to its inventory?

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15.

Explain the term, "business liquidation."

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16.

Rolla Company was founded in 2010. It acquired $30,000 cash by issuing stock to investors and an additional $20,000 cash by borrowing from creditors. During 2010 it received $15,000 cash revenues and paid $22,000 in cash expenses. The company then went out of business.What amount of cash will Rolla's creditors receive?

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17.

Rolla Company was founded in 2010. It acquired $30,000 cash by issuing stock to investors and an additional $20,000 cash by borrowing from creditors. During 2010 it received $15,000 cash revenues and paid $22,000 in cash expenses. The company then went out of business.What amount of cash will Rolla's stockholders receive?

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18.

List the key elements of an internal control system that would apply to inventory, and explain how each of them does relate to inventory.

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19.

What is the purpose of closing entries?

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20.

 

What is the purpose of a journal in accounting? 

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A+++++++++

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