Exam 2 Practice - Practice Exam 2 (Chapters 2, 8, 17, 25...

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Practice Exam 2 (Chapters 2, 8, 17, 25 Section 2) These practice questions do not cover every topic that may appear on the actual exam, but they should be a part of your exam preparation. You should also study your class notes, homework, practice problems as well as the assigned reading from the textbook. 01. The purpose of the ledger is to A. record chronologically the day’s transactions. B. keep a record of documentation to support each transaction. C. keep in one place all information about changes in specific account balances. D. make sure that all assets, liabilities, etc., have normal balances at all times. 02. The Village Laundry Company purchased $6,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $4,500 on hand. The related journal entry that should be made by the company on June 30 is A. Debit Laundry Supplies Expense, $2,000; Credit Laundry Supplies, $2,000. B. Debit Laundry Supplies Expense, $4,500; Credit Laundry Supplies, $2,000. C. Debit Laundry Supplies Expense, $4,500; Credit Laundry Supplies, $4,500. D. Debit Laundry Supplies, $4,500; Credit Laundry Supplies Expense, $4,500. 03. The ability to meet short-term obligations and to efficiently generate revenues is called: A. Liquidity and efficiency. B. Solvency. C. Profitability. D. Market prospects. E. Creditworthiness. 04. Sales receipts are an example of which internal control principle? A. Technological controls. B. Maintain adequate records. C. Perform regular and independent reviews. D. Establish responsibilities. E. Divide responsibility for related transactions. 05. Leonard Matson completed these transactions during December of the current year: 1 Began company by investing $20,000 3 Purchased $5,000 of office equipment 6 Purchased $300 of supplies on account 10 Completed work for a client; received $900 15 Completed work for a Acme Company; sent a bill for $1,700 17 Paid for supplies purchased earlier 22 Received payment in full from Acme Company. Based on the transactions above, what are the company’s total assets? Answer -- Page 1 of 6 --
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06. In horizontal analysis the percent change is computed by: A. Subtracting the current year amount from the previous year amount. B.
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This note was uploaded on 02/16/2010 for the course ECONOMICS 420K taught by Professor Dusansky during the Spring '10 term at University of Texas at Austin.

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Exam 2 Practice - Practice Exam 2 (Chapters 2, 8, 17, 25...

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