Midterm_Version_B_Answers - Student Name: _ BUS 208 A, B, C...

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Student Name: _________________________ BUS 208 A, B, C or D (circle one ) Version B Fall 2008 AUBG MIDTERM EXAM Do NOT open nor start this exam until after you are told to do so.
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Specific instructions governing behavior during exams and quizzes include: Use the scratch paper provided in class. Bring a simple calculator. Calculators may not be shared. They may not be equipped with a keyboard. Keep other electronic devices off the desk, including cell phones, CD players, radios, etc. Leave the room only when you have completed a quiz or exam; no one is readmitted. Stop working when time ends. 10% points of quiz/exam penalty for continuing after classmates have stopped. Print your name clearly. 10% of quiz/exam penalty if name is missing or illegible. Good luck! Part I – Definitions . Match the appropriate definitions with the accounting terminology provided by placing the appropriate letter before the terms . (12 points) e) Trade discount c) Discounting g) Temporary accounts l) Bonding h) Cash equivalents b) Consignment d) Permanent accounts f) Expenditure i) License a) Invoice j) Lower of cost or market k) Sales discount a. A form sent to the purchaser by the vendor describing the goods delivered, the quantity, price, and terms of payment. b. Merchandise that its owner places on the premises of another company with the understanding that payment is expected only when the merchandise is sold and that unsold items may be returned. c. A method of selling notes receivable in which the bank deducts the interest from the maturity value of the note to determine the proceeds. d. Balance sheet accounts; accounts whose balances can extend past the end of an accounting period. e. A deduction (usually 30% or more) off a list or catalogue price that is not recorded in the accounting records. f. A payment or an obligation to make future payment for an asset or a service. 2
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g. Accounts that show the accumulation of revenues and expenses over one accounting period; at the end of the accounting period, these account balances are transferred to owners’ equity. h. Short-term investments that will revert to cash in 90 days or less from the time they are purchased. i. The right to use a formula, technique, process, or design. j. A method of valuing inventory at an amount less than cost when the replacement cost falls below historical cost. k. A discount given to a buyer for early payment of a sale made on credit. l. The process of carefully checking an employee’s background and insuring the company against theft by that person. Part II – True or false ? Circle the correct answer. (8 points) 1. The Allowance to value equity securities at market account sometimes, but not always, acts as a contra-account to the Investments in equity securities account. Hint: you may create a simple example(s) with assumed numbers to visualize this. a)
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This note was uploaded on 12/14/2009 for the course BUSINESS bus 203c taught by Professor Milankas. during the Spring '09 term at American University in Bulgaria.

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Midterm_Version_B_Answers - Student Name: _ BUS 208 A, B, C...

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