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ECON 3A- INTRO ACCOUNTING, SPRING 2005 MIDTERM #1 Name: ________________________ Perm #: ___________________ Date: __________ ID: A 1 S05 MT1 True/False Indicate whether the sentence or statement is true or false- MARK ON YOUR SCANTRON- A FOR TRUE AND B FOR FALSE. ____ 1. In order to qualify as an S-Corporation, a business entity shall have less than 150 employees. ____ 2. Borrowing and repayment of debt, and buying and selling an enterprises own stock are examples of financing activities. ____ 3. While the balance sheet presents a company’s financial position as of a specified date, the income statement presents the results of their operations for a specified period of time. Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. CONTINUE TO RECORD YOUR ANSWERS ON YOUR SCANTRON. ____ 4. The activities of a business enterprise are separated into three categories. These three categories are listed as the three components of the statement of cash flows. They include all but: a. Accruing c. Investing b. Operating d. Financing ____ 5. Information that is material means that an error or alternative method of handling a transaction a. would possibly affect the judgment of someone relying on the financial statements. b. might cause a company to understate its earnings for the accounting period. c. would not affect the decisions of users. d. could increase the profitability of a company. ____ 6. Which of the following categories on a statement of cash flows is used to report the cash flow effects of buying and selling long-term assets? a. Both financing and investing activities b. Operating activities c. Investing activities d. Financing activities ____ 7. XYZ, Inc. paid $12,000 on January 1, 2004 for an insurance policy covering the period from January 1 through December 31, 2004. The following amounts should be reflected on their balance sheet as of July 31, 2004 and as an expense on the income statement for the 7 months ended July 31, 2004, respectively: a. No asset and $12,000 expense c. $12,000 asset and $7,000 expense b. $12,000 asset and no expense d. $5,000 asset and $7,000 expense ____ 8. The financial statement which reports changes in all components of stockholders' equity is the a. Cash Flow Statement. b. Statement of Retained Earnings. c. Statement of Stockholders' Equity. d. Balance Sheet.
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ID: A 2 ____ 9. Which set of the following accounts normally would be reported as current liabilities on a classified balance sheet? a. Income taxes payable and Salaries payable b. Interest payable and Mortgage payable c. Accounts payable and Bonds payable d. Capital stock and Accounts payable ____ 10. Accounting is a process designed to do all of the following relative to econcomic information, except: a. measuer c. identify b. communicate d. project ____ 11. The declaration that the financial statements "in our opinion, present fairly the financial position, operating results, and cash flows, in conformity with generally accepted accounting principles" would be found in
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This note was uploaded on 06/09/2009 for the course ECON 3A taught by Professor Loster during the Winter '07 term at UCSB.

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