Final.F06 - CONCORDIA UNIVERSITY DEPARTMENT OF ACCOUNTANCY...

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CONCORDIA UNIVERSITY FINANCIAL ACCOUNTING DEPARTMENT OF ACCOUNTANCY COMM 217 ALL SECTIONS FINAL TERM EXAMINATION Fall 2006 Duration: 3 hours Instructions : 1. This examination paper consists of 8 pages including this page. Please make sure your paper has all pages before commencing to write. 2. Write all your answers (including answers to multiple choice statements) in the examination answer booklet. You may answer the questions in any order you prefer. Only the answers in the examination booklet will be graded. 3. Read the questions carefully and budget your time wisely. Show all calculations. 4. This is a closed book examination. However, silent hand-held (not graphical) calculator and one standard language (not electronic) dictionary is permitted. 5. Invigilators will not answer questions (unless you think there is an error in the question). 6. Return the exam along with the answer booklets when you finished. Question Topic Total Marks 1 Multiple choice 24 2 Merchandising transactions and inventory costing methods 18 3 Accounting for long-term assets 20 4 Accounting for bonds 22 5 Financial statement analysis 16 Total 100
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Question 1 Multiple Choice (24 marks; 40 minutes) For each of the following, choose the letter that corresponds to the best answer, and write the letter in your examination booklet, not on this examination paper . Each correct answer is worth 1.5 marks. 1. Wilburn Company collected $100,000 from customers and paid employees and suppliers $90,000 during 2006. In addition, the company borrowed $30,000 from the bank and purchased equipment for $20,000. The company's cash flow statement for 2006 would show: A) an increase in cash by $20,000. B) an increase in cash by $30,000. C) a decrease in cash by $20,000. D) a decrease in cash by $30,000. 2. The qualitative characteristic comparability assumes that A) users can compare financial data across businesses. B) the same accounting procedures should be applied from year to year. C) accounting data should be supported by documents when possible. D) accounting data should be based on objective data and transactions. 3. The primary purpose of hiring a public accounting firm to examine the financial statements of the company is A) to assure no fraud has been committed by the company's management. B) to provide credibility that the financial information conforms with generally accepted accounting principles in all material respects. C) to detect all accounting errors made by the accounting system and employees. D) not reflected in any of the previous statements. 4. Richmond Company had the following information taken from its adjusted trial balance: Sales, $200,000; Sales Discounts, $4,000; Beginning Inventory, $10,000; and Purchases, $140,000. A physical count of the merchandise on hand at the end of the year resulted in Ending Inventory of $20,000. The gross profit that would appear on the company’s income statement equals A) $70,000. B)
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Final.F06 - CONCORDIA UNIVERSITY DEPARTMENT OF ACCOUNTANCY...

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