Test2Fall2006AMASTER

Financial Accounting

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Fall 2006 Financial Accounting 201 EXAM #2 NAME________________________ SECTION TIME  (Circle one)   10:00  12:00  1:00 Answer all multiple choice questions below; there is only one BEST answer (2 points each) 1. ____ C _____ 11.____ A _____ 2.  ____ C _____ 12.____ C _____ Note:  Put answers to problems on  Pages provided.  Turn in all pages 3. ____ B _____ 13. ____ C _____ of exam. 4. ____ C _____ 14. ____ B _____ Put answer sheets in front of exam. 5. ____ B _____ 15.____ B _____ SCORE 6. ____ D _____ 16. ____ D _____ Possible Actual 7. ____ D _____ 17. ____ C _____ Multiple Choice 40  8. ____ B _____ 18. ____ A _____ Problem I 20 9. ____ C _____ 19. ____ D _____ Problem   II 30 Short Answer      10 10. ____ A _____ 20. ____ C _____ Total    100 T2 Fall 06 A Page 1
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Multiple Choice   (2 points each)  There is only  ONE   BEST   answer. Use the following information to answer questions 1 and 2. The trial balance for Houley Corporation appears as follows: Houley Corporation Trial Balance December 31, 2005 Cash $    300 Accounts Receivable 500 Prepaid Insurance 50 Supplies 150 Office Equipment 4,000 Accumulated Depreciation, Office Equipment $    800 Accounts Payable 300 Common Stock 1,000 Retained Earnings 1,400 Service Revenue 3,000 Salaries Expense 1,000 Rent Expense      500                     $ 6,500 $ 6,500 1. If on December 31, 2005, the insurance still unexpired amounted to $20, the adjusting entry  would contain a A. Debit to Prepaid Insurance for $30. B. Credit to Prepaid Insurance for $20. C. Debit to Insurance Expense for $30. D. Debit to Prepaid Insurance for $20. 2. If service for $125 had been performed but not billed, the adjusting entry to record this would  include a A. Debit to Service Revenue for $125. B. Credit to Unearned Service Revenue for $125. C. Credit for Service Revenue for $125. D. Debit to Unearned Revenue for $125. 3. An adjusted trial balance A. is prepared after the financial statements are completed. T2 Fall 06 A Page 2
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B. proves the equality of the total debit balances and total credit balances of  ledger accounts after all adjustments have been made. C. is a required financial statement under generally accepted accounting principles. D. cannot be used to prepare financial statements. T2 Fall 06 A Page 3
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4. Closing entries A. are prepared before the financial statements. B. reduce the number of permanent accounts. C. cause the revenue and expense accounts to have zero balances. D. summarize the activity in every account.
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Test2Fall2006AMASTER - Fall 2006 Financial Accounting 201...

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