SampleFinalExam - 1 Business 1001 ALL SECTIONS Sample Final...

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Unformatted text preview: 1 Business 1001 ALL SECTIONS Sample Final Examination DURATION: 3 hours NOTES: 1. Non-programmable calculators without an alpha-storage capability may be used. 2. Question 1 is to be answered on the Scantron Sheet provided for this purpose. All other questions MUST be answered in your answer booklet . 3. At the end of the exam, hand in your Scantron Sheet and examination booklet separately to the proctor. Do not take the examination booklet with you. 4. A list of selected financial ratios is provided on the last page . 5. This exam has 6 questions and 13 pages. Check that you have all pages. Question 1 (51 marks - 1.5 marks for each question) 1 Retained earnings at the end of the period is equal to a. retained earnings at the beginning of the period plus net earnings minus liabilities. b. retained earnings at the beginning of the period plus net earnings minus dividends. c. net earnings. d. assets plus liabilities. 2 2 If total liabilities increased by $25,000 and shareholders’ equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period? a. $20,000 decrease b. $20,000 increase c. $25,000 increase d. $30,000 increase 3. In applying accounting constraints within the conceptual framework, an item is considered material if a. it costs a lot of money. b. it is of a tangible nature. c. it is likely to influence the decision of an investor or creditor. d. the cost of reporting the item is greater than its benefits. 4 The operating cycle of a company is the average time that is required to go from cash to a. sales in producing revenues. b. cash in producing revenues. c. inventory in producing revenues. d. accounts receivable in producing revenues. 5 If a resource has been consumed but a bill has not been received at the end of the accounting period, then a. an expense should be recorded when the bill is received. b. an expense should be recorded when the cash is paid out. c. an adjusting entry should be made recognizing the expense. d. it is optional whether to record the expense before the bill is received. 6 Which one of the following is not a justification for adjusting entries? a. Adjusting entries are necessary to ensure that revenue recognition principles are followed. b. Adjusting entries are necessary to ensure that the matching principle is followed. c. Adjusting entries are necessary to enable financial statements to be in conformity with GAAP. d. Adjusting entries are necessary to bring the general ledger accounts in line with the budget. 3 7. Which of the following is a true statement about inventory systems? a. Periodic inventory systems require more detailed inventory records....
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This note was uploaded on 07/18/2008 for the course BUSINESS 1001 taught by Professor - during the Spring '08 term at École Normale Supérieure.

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SampleFinalExam - 1 Business 1001 ALL SECTIONS Sample Final...

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