2003 Fall Accounting_011_exam_1___Fall_2003

2003 Fall Accounting_011_exam_1___Fall_2003 - Temple...

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Unformatted text preview: Temple University Fox School of Business and Management Dr. Steven Balsam Accounting 011 Exam #1 September 24, 2003 Instructions: You have 60 minutes. Answer the questions on the pages provided and please remember to show all work so that you may receive partial credit. Also please put your name on each page in case the pages get separated. Good luck! Name ________________________________ Answer Sheet for Multiple Choice 1. ________________ 2. ________________ 3. ________________ 4. ________________ 5. ________________ 6. ________________ 7. ________________ 8. ________________ 9. ________________ 10. ________________ 2 Multiple Choice (5 points each 50 points total please include answers on answer sheet). 1. Which of the following is a limitation of the balance sheet? a. Many items that are of financial value are omitted. b. Judgments and estimates are used. c. Current fair value is not reported. d. All of these 2. Under which of the following conditions would material flood damage be considered an extraordinary item for financial reporting purposes? a. Only if floods in the geographical area are unusual in nature and occur infrequently. b. Only if the flood damage is material in amount and could have been reduced by prudent management. c. Under any circumstances as an extraordinary item. d. Flood damage should never be classified as an extraordinary item. 3. When an item of expense is paid and recorded in advance, it is normally called a(n) a. prepaid expense. b. accrued expense. c. estimated expense. d. cash expense. 4. When an item of revenue is collected and recorded in advance, it is normally called a(n) ___________ revenue. a. accrued b. prepaid c. unearned d. cash 5. If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve a. a liability account and an asset account. b. an asset or contra asset account and an expense account. c. a liability account and an expense account. d. a receivable account and a revenue account. 3 6. Lane Company purchased equipment on November 1, 2004 and gave a 3-month, 9% note with a face value of $50,000. The December 31, 2004 adjusting entry is a. debit Interest Expense and credit Interest Payable, $4,500. b. debit Interest Expense and credit Interest Payable, $1,125. c. debit Interest Expense and credit Cash, $750. d. debit Interest Expense and credit Interest Payable, $750. 7. During 2004, Lopez Corporation disposed of Pine Division, a major component of its business. Lopez realized a gain of $500,000, net of taxes, on the sale of Pine's assets. Pine's operating losses, net of taxes, were $600,000 in 2004. How should these facts be reported in Lopez's income statement for 2004?...
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2003 Fall Accounting_011_exam_1___Fall_2003 - Temple...

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