Midterm - Facult / cole de gestion Faculty / School of...

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Sheet1 Page 1 Faculté / École de gestion Faculty / School of Management Mid-term Examination ADM 2340 Financial Accounting Summer 2008 X & Y S O L U T I O N S Time: 3 hours Student Name: _________________________________ Student #: _____________________________________ Section: X ____ Y ____ *READ CAREFULLY* Instructions 1. This exam comprises XX pages, is 3 hours long, and is out of 100 marks. Allow an average of 1.8 minutes per mark. 2. Follow instructions carefully for each question. 3. Show all supporting calculations clearly where required. Answers will not be marked if they are written illegibly. 4. Non-programmable calculators are permitted, but you cannot share calculators. 5. Books and notes are not permitted. 6. Please do not ask the professor or the invigilator to explain or interpret questions. State any assumptions you feel are necessary. 7. There is one page at the back of this exam for additional space, if required. Q1 /35 Q2 /17 Q3 /6 Q4 /6 Q5 /6 TOTAL /70 T QUESTION NO. 1 - 50 marks Circle the best answer for each of the following multiple-choice questions directly onto your examination sheet. Only one answer will be accepted for each question. There is no penalty for guessing. No account will be taken of any explanations provided. Questions 1 to 20 are each worth one mark. Recording an asset at what you paid for it instead of what you hope to be able to sell it for is an example of which characteristic of accounting information?
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Sheet1 Page 2 a. Relevance b. Timeliness c. Neutrality d. Consistency The use of the same accounting method by a company over time is an example of: a. Understandability b. Verifiability c. Consistency d. Neutrality Which of the following represents the cost of goods sold? a. Beginning inventory + ending inventory & purchases b. Beginning inventory + purchases h ending inventory c. Purchases + ending inventory U beginning inventory d. Purchases ± beginning inventory t ending inventory Which of the following is a revenue recognition criterion? a. Recorded revenues and expenses are reliable. b. Recorded revenues and expenses are probable. c. There is reasonable assurance that recorded revenues and expenses will ultimately be received or paid. d. There is a high probability that recorded revenues and expenses will result in related cash flows. At the end of the accounting period, the recording of interest expense that has not been paid yet on a loan outstanding during the period is an example of which of the following accounting principles? a. Matching concept b. Revenue recognition c. Historical cost d. Cash basis of accounting
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Sheet1 Page 3 Note: I suggest both a. and b. are correct. Expenses are matched with revenue duly recognized. The Hoskin text does roll this into & revenue recognition± , but in my lectures I have emphasized
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Midterm - Facult / cole de gestion Faculty / School of...

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