A201 Final - Solutions

A201 Final - Solutions - Accounting 201: Stanford GSB...

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Accounting 201: Stanford GSB Autumn Quarter, 2007 Final Examination Solutions INSTRUCTIONS 1. Please verify that your exam contains a total of 7 pages, including this one. 2. You must enter your work and solutions in this booklet, within the spaces provided. 3. This is an individual, open-book exam; you are allowed to use a calculator. 4. The use of laptops or obtaining access to the internet in any way is prohibited . 5. You can take the test in any of the following locations: Rooms: S150, S151, S152, S161, S162, S170, S171, S180, S181, S182, S183. 6. The exam starts at 1:00 p.m. and you must return your exam by 3:00 p.m. to your assigned lockbox. Note that late exams will not be accepted and will automatically receive a grade of zero. Section Instructor Lockbox 1 Reichelstein 28 2 Larcker 31 3 Rajan 38 4 Larcker 41 5 Reichelstein 44 6 Rajan 46 The Stanford Honor Code applies to this exam. 7. Please print your full name on this cover page. NAME (PRINT): ________________________________________________________ RESULTS : PART I: Multiple Choice (27 points): ________ PART II: Financial Accounting – Short Answers (50 points): ________ PART III: Managerial Accounting – Multiple Choice (23 points): ________ TOTAL: (100 points): ________
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PART I : Multiple Choice 1. A company's return on equity (ROE) ratio is directly affected by the market price of its common stock. (2 points) A) True B) False 2. If depreciation is not recorded for the current accounting period, total assets will be understated. (2 points) A) True B) False 3. Gross margin equals sales minus operating expenses. (2 points) A) True B) False 4. The entry to record the cash payment of salaries that had previously been accrued has what effect on the basic accounting identity? (3 points) A) Decrease liabilities, decrease assets B) Decrease liabilities, decrease stockholders' equity C) Decrease assets, decrease stockholders' equity D) Decrease assets, increase stockholders' equity E) None of the above 5. Which of the following transactions would most likely create cash inflow from an operating activity? (3 points) A) Paid our suppliers from whom we had purchased on credit B) Borrowed money from the bank C) Sold land and buildings for cash D) Collected cash from a credit customer E) None of the above 6. For each transaction recorded in an accounting system, one basic identity that must be maintained at all times is: (3 points) A) Net Income = Revenues + Expenses. B)
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A201 Final - Solutions - Accounting 201: Stanford GSB...

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