Midterm.W08 - CONCORDIA UNIVERSITY DEPARTMENT OF...

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CONCORDIA UNIVERSITY FINANCIAL ACCOUNTING DEPARTMENT OF ACCOUNTANCY COMM 217 ALL SECTIONS MID-TERM EXAMINATION Winter 2008 Duration: 3 hours Instructions : 1. This examination paper consists of 8 pages including this page. Please make sure your paper has all pages before commencing to write. 2. Write all your answers (including answers to multiple choice statements) in the examination answer booklet. You may answer the questions in any order you prefer. Only the answers in the examination booklet will be graded. 3. Read the questions carefully and budget your time wisely. Show all calculations. 4. This is a closed book examination. However, silent hand-held (not graphical) calculator and one standard language (not electronic) dictionary is permitted. The examination should be answered in ink. 5. Invigilators will not answer questions (unless you think there is an error in the question). 6. Return the exam along with the answer booklets when you have finished. Question Topic Total Marks 1 Multiple choice 21 2 Preparation of journal entries and financial statements 28 3 Merchandising transactions and receivables 14 4 Preparation of adjusting entries 14 5 Preparation of cash flow statement 23 Total 100
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Question 1 (21 marks; 38 minutes) Multiple choice For each of the following, choose the letter that corresponds to the best answer, and write the letter in your examination booklet, not on this examination paper . Each correct answer is worth 1.5 marks. 1. Selling inventory at a price in excess of its cost will cause a. no change in total assets as the decrease in inventory is offset by increases in other asset accounts. b. a change in total assets; however, the effect on total assets will be different depending on whether the sale was for cash or on account. c. an increase in total assets and an increase in total liabilities. d. an increase in total assets and an increase in shareholders' equity. 2. Hamed Salem is the sole owner and manager of Hamed Auto Repair Shop. In 2007, Hamed purchased a new automobile for personal use and continued to use an old truck in the business. Which of the following fundamentals prevents Hamed from recording the cost of the new automobile as an asset to the business? a. Separate-entity assumption. b. Revenue principle. c. Full disclosure. d. Cost principle. 3. Which of the following would most likely lead to an accrual adjustment? a. Interest revenue earned but not yet collected b. Wages incurred as an expense but not yet paid c. Rent owed to the company and not yet received d. All of these are accrual adjustments e. None of these is an accrual adjustment 4. Which of the following statements is correct? a. The sale of an investment in bonds (long-term debt issued by another company) for less than the carrying value of the investment would be reported as cash outflow from investing activities. b.
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This note was uploaded on 08/19/2008 for the course COMM 217 taught by Professor Smroz during the Summer '07 term at Concordia Canada.

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Midterm.W08 - CONCORDIA UNIVERSITY DEPARTMENT OF...

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