practice question and sol v2

practice question and sol v2 - Practice questions for ACCT...

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1 Practice questions for ACCT 410 Prof Hung Midterm #1 The purpose of this document is to help you review the material and PRACTICE. PLEASE NOTICE: -Some questions might be harder than the real exam while some might be easier. -There is NO guarantee that the real exam will be similar to this one. For example, there are relatively more multiple choice questions on managerial accounting in the practice questions than in the midterm exam. This is to compensate the fact that we did not have a quiz on managerial accounting for you to practice on this subject. -This document also does NOT necessarily cover all the material. The midterm exam is expected to be longer than the practice questions. Be sure to review relevant class materials (such as cases, quizzes etc.) -The solutions are attached at the end of the document.
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2 Multiple-Choice Challenge – CHOOSE A SINGLE BEST ANSWER 1. Revenues should be recognized only when a. The firm delivers all goods or performs all services it expects to provide and receives an asset that is capable of reasonably precise measurement. b. They are matched with the assets consumed in the productive process c. They can be related to a specific cost d. The cash is realized 2. Which financial statement presents financial position as of a point in time? a. Balance sheet b. Income statement c. Statement of cash flows d. Both balance sheet and income statement e. both income statement and statement of cash flows 3. Which of the following is TRUE? a. debits decrease asset and expense accounts b. credits decrease revenue and owners equity accounts c. debits decrease liability and expense accounts d. credits decrease asset and expense accounts e. none of the above 4. Accrual basis accounting a. recognizes expenses only when the cash is paid b. recognizes revenues only when the cash is received c. measures net income as the difference between the cash received and the cash paid during a period d. attempts to recognize revenues when they are earned and expenses when they are incurred (regardless of when the cash comes in or goes out) 5. At year end, Relevance Corporation reported total assets of $22 million, total shareholders’ equity of $14 million, and total Paid-in capital of $10 million. Total liabilities equal a. $1 million b. $6 million c. $7 million d. $8 million 6. Ka-Shing Company purchased inventory of $10,000 on account. The entry to record this transaction on Ka-Shing’s books would normally include: a. a debit to cash of $10,000 b. a debit to accounts receivable of $10,000 c. a credit to inventory of $10,000 d. a credit to accounts payable of $10,000 7. Keiretsu Company sold a chair to a customer on account for $50 during the month of
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3 January. The customer paid the account in full in February. Keiretsu Company’s journal entry to record the sale of the chair in January would probably include: a. a credit to accounts receivable of $50 b. a credit to accounts payable of $50 c. a debit to accounts receivable of $50
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practice question and sol v2 - Practice questions for ACCT...

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