MIDSEMMultiple Choice PracticeQuesSOLNS copy.doc

# MIDSEMMultiple Choice PracticeQuesSOLNS copy.doc - BSD110...

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BSD110 ACCOUNTING SOLUTIONS TO PRACTICE QUESTIONS FOR MID SEMESTER EXAM TOPICS 1 - 5 (Workings are supplied where more detailed calculations) QUESTION CORRECT ANSWER 1 b 2 a 3 d 4 c 5 d 6 b Working: OE at start is \$16,000. Add the profit of \$3000, add the owner’s investment of \$5000 and deduct the drawings of \$2000. This equals \$22,000 which is the owner’s equity at the end of the year. Assets at the end of the year are \$14000 greater than at the start thus = \$54000. Liabilities at end = A – OE = \$32000. 7 d 8 b Working: A –L at start of year = OE at start = \$2,000. Add net profit (R –E) \$3,200. Add Capital Contributed \$23,000 less Capital Withdrawn \$21,000 . This gives OE at the end of the period. = \$7,200. = A - L at the end of the period Assets at the end are \$40,000 therefore Liabilities are \$32,800. 9 d Working: A –L =OE. Assets decrease by \$24780 means OE decreases by \$24780; Liabilities decrease by \$15265 means OE increases by that amount. Net effect on OE is a decrease of the difference of \$9515. 10 b 11 c 12 d 13 b 14 e 15 d (Net profit = Revenue less Expenses) 16 d 17 c 18 d 19 b 20 c Working: If an accrued expense is not recorded then an expense and a liability is not

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