ACC 201 Questions: Multiple-Choice Questions on Accounting Topics – Final exam

Summary

Accounting topics are covered. Students get multiple-choice questions to test their understanding.

Depreciation and asset valuation

Depreciation methods are explained. Students work out the depreciation expense for assets. The consistency principle is discussed.

Inventory valuation methods

Inventory valuation methods are described. Students calculate the cost of inventory sold using the LIFO method. The lower-of-cost-or-market rule is applied.

Receivables and notes

Notes receivable are described. Students calculate interest due on a note. The maturity date of a note receivable is explained.

Bad debts and write-offs

The allowance method for bad debts is explained. Students determine the effect of writing off a bad debt on net income and total assets.

Key terms

depreciation

The process of allocating the cost of a plant asset to expense.

LIFO

A method of inventory valuation that assumes the last items purchased are the first ones sold.

lower-of-cost-or-market

A rule for valuing inventory at the lower of its cost or market value.

note receivable

A written promise to pay a certain amount of money at a future date.

allowance method

A method of accounting for bad debts that estimates uncollectible accounts.

consistency principle

A principle that requires a company to use the same accounting methods from year to year.

Questions this document helps with

• How do you calculate depreciation expense?
• What is the LIFO method of inventory valuation?
• What is the effect of writing off a bad debt on net income?

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