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Midtermv1 - student - ACCT 220 – Midterm Practice Test...

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Unformatted text preview: ACCT 220 – Midterm Practice Test True/False Questions 1. Accounting is an information and measurement system that identifies, records, and communicates financial information to users. 2. External users include lenders, shareholders, customers, and regulators. 3. The primary objective of financial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities. 4. Ethics are not important to the primary functions of accounting. MATCHING 135.Identify each of the following accounts as a revenue (R), expense (E), asset (A), liability (L), or equity (OE) by placing initials (R,E,A,L or OE) in the blanks. ____ 1. Salary Expense ____ 2. Cash ____ 3. Equipment ____ 4. Owner, Capital ____ 5. Fees Revenue ____ 6. Accounts Receivable ____ 7. Accounts Payable ____ 8. Owner, Withdrawals ____ 9. Supplies ____ 10. Unearned Fee Revenue ____ 11. Prepaid Insurance ____ 12. Office Furniture MULTIPLE CHOICE 1. If equity is $300,000 and liabilities are $192,000, then assets equal: A) $108,000. B) $192,000. C) $300,000. D) $492,000. E) $792,000. 2. FastForward has net income of $18,955, and assets at the beginning of the year of $200,000. Assets at the end of the year total $246,000. Compute its return on assets. ROA = Net Income / Average Total Assets A) 7.7%. Employee salaries expense.... $180,000 Interest expense.................... 10,000 Rent expense........................ 20,000 Consulting revenue............... 400,000 Assets = Liabilities + Equity B) 8.5%. C) 9.5%. D) 11.8%. E) 13.0%. 2b. Assume that FastForward’s priory year ROA (return on assets) was 10%. Is the company in a better financial position this year than it was last year? Please explain your answer. 3. Determine the net income of a company for which the following information is available for the month of May. A) $190,000. B) $210,000. C) $230,000. D) $400,000. E) $610,000. 4. A company's balance sheet shows: cash $22,000, accounts receivable $16,000, office equipment $50,000, and accounts payable $17,000. What is the amount of owner's equity? A) $ 17,000. B) $ 29,000. C) $ 71,000. D) $ 88,000. E) $105,000. 5. On May 1, Chuck Taylor formed FastForward, a shoe consulting business. In order to start the business he invested $750,000 in cash. Enter the appropriate amounts reflecting the transaction into the accounting equation format shown below. 6. Halley Burton began a Web Consulting practice and completed these transactions during September of the current year: Sept. 1 Invested $100,000 of his personal savings into a checking account opened in the name of the business....
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This note was uploaded on 12/01/2009 for the course AMBA 640 taught by Professor D'mello during the Spring '09 term at Adelphi.

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Midtermv1 - student - ACCT 220 – Midterm Practice Test...

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