Test2Fall2007_B_MASTER

Financial Accounting

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Fall 2007 Financial Accounting 201 EXAM #2 NAME______  MASTER_ ________ SECTION TIME  (Circle one)   8:00  9:00 Answer all multiple choice questions below; there is only one BEST answer (2 points each) 1. ____ D _____ 11.____ B _____ 2.  ____ A _____ 12.____ A _____ Note:  Put answers to problems on  Pages provided.  Turn in all pages 3. ____ B _____ 13. ____ D _____ of exam. 4. ____ D _____ 14. ____ A _____ Put answer sheets in front of exam. 5. ____ D _____ 15.____ C _____ SCORE 6. ____ A _____ 16. ____ D _____ Possible Actual 7. ____ C _____ 17. ____ C _____ Multiple Choice 40  8. ____ C _____ 18. ____ C _____ Problem I 20 9. ____ A _____ 19. ____ D _____ Problem   II 30 Short Answer      10 10. ____ C _____ 20. ____ D _____ Total    100 T2 Fall 07 B Page 1
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Multiple Choice   (2 points each)  There is only  ONE   BEST   answer. 1. Which of these could not  be a closing entry? A. Salary expense XX Income summary XX B. Dividends XX Retained earnings XX C. Income summary XX Income Tax expense XX D. Both a and b. 2. Which of the following is false regarding a perpetual inventory system? A. Physical counts are needed to determine the inventory balance. B. The balance in the inventory account is updated with each inventory purchase  action. C. Cost of goods sold is increased as sales are recorded. D. The account Purchases is not used as inventory is acquired. 3. Sales revenues are usually considered earned when A. Cash is received from a sale on account B. Legal ownership of goods has been transferred from the seller to the buyer C. A sales order has been received D. The goods leave the seller’s business 4. A company shows the following balances: Sales $1,000,000 Sales Returns and Allowances 175,000 Sales Discounts 25,000 Cost of Goods Sold 600,000 What is the gross profit rate? A. 60% B. 75% C. 40% D. 25% 5. After preparing an adjusted trial balance, what is the next step in the accounting cycle? A. Post adjusting entries B. Analyze transactions C. Prepare the closing entries D. Prepare the financial statements T2 Fall 07 B Page 2
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A furniture factory's employees work overtime to finish an order that is sold on January 31.  The office sends a statement to the customer in early February and payment is received  by mid-February. The overtime wages should be expensed in A. January. B. February. C. the period when the workers receive their checks. D. either January or February depending on when the pay period ends. T2 Fall 07 B
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Test2Fall2007_B_MASTER - Fall 2007 Financial Accounting 201...

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