Acct321Sum09Midterm - ACCOUNTING 321 PROFESSOR SNYDER...

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ACCOUNTING 321 PROFESSOR SNYDER SUMMER 2009 EXAM I Name_________________________________ 1. The exam contains 7 questions (each with several subparts). Question I 10 points Question II 13 points Question III 12 points Question IV 13 points Question V 22 points Question VI 12 points Question VII 18 points 2. For the essay questions, be clear and specific; managers (and professors) become impatient with muddled explanations, and your next pay raise (and your grade) will be affected by his/her appraisal of your explanation. 3. Question will be graded for PARTIAL CREDIT. You may receive partial credit ONLY FOR WRITTEN WORK we can follow. 4. DO NOT remove any pages from your test. 5. DO all of your work on this exam. DO NOT use any other sheets for scrap paper. 6. You are expected to do your own work.
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I. Martha Footer has successfully completed her first accounting course during the spring semester and is now working as a management trainee for Bluffton National Bank during the summer. One of her fellow management trainees, Rick Slick, is taking the same accounting course this summer and has been having a “lot of trouble.” On the second examination, for example, Rick became confused about inventory valuation methods and completely missed all the points on a problem involving lower of cost or market. Rick’s instructor recently indicated that the third examination will probably have a number of essay questions dealing with accounting principle’s issues. Rick is quite concerned about the third examination for two reasons. First, he has never taken an accounting examination where essay questions were required. Second, Rick feels he has to do well on this examination to get an acceptable grade in the course. Rick has therefore asked Martha to help him prepare for the next examination. Martha agrees, and suggests that Rick develop a set of possible questions on the accounting principles material that they might discuss. Instructions Answer the following questions that were developed by Rick. Your score is dependent upon well articulated responses. Grading will be heavily weighted on appropriate writing skills. A. Differentiate broadly between Financial Accounting and Managerial Accounting. (2 points) _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ 2
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B. Of what value is a common set of standards in financial accounting and reporting? (2 points) _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ 3
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C. What are some of the major challenges facing the accounting profession? (4 points) _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ 4
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D. What is the likely limitation of “general purpose financial statements? (2 points) _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ 5
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II. A. Presented below are a number of accounting procedures and practices in Voo Doo Corp. For each of these items, list the assumption, principle, information characteristic, or modifying convention that is violated. Explain your answer to Voo Doo Corp. in understandable terms. If there is not a violation, please also explain your answer.
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