Practice Exam 2 Fall 09

Practice Exam 2 Fall 09 - Exam #: Fundamentals of Financial...

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Exam #: Fundamentals of Financial Accounting ACC 311 Spring 2009 Exam II, Form A Name Instructor Section Meeting Time DO NOT OPEN until given instructions to do so. Instructions 1. Assume that the accrual basis of accounting applies to all questions , unless a question specifically instructs otherwise. 2. Confirm that you have eleven (11) numbered pages. There are also two blank sheets of paper at the end of the exam that you may use for scratch paper. 3. On your Scantron answer sheet, write and bubble in your name, section number, and the Test Form letter noted above. 4. Use a #2 pencil only to mark your responses on your Scantron answer sheet. Mark clearly and erase completely as needed. You should also mark your answers on your exam. However, only multiple choice answers marked on your Scantron answer sheet will be graded. 5. Multiple choice questions are 2 points each; all other questions have their point value noted with the problem. 6. Cell phones and PDA's are NOT allowed and must be turned off and put away during the exam. Calculators capable of storing text (programs) are not allowed. You may use a basic or financial calculator with numerical memory functions only. 7. Bring your entire exam, Scantron answer sheet and student ID to the front of the room when you have finished. 8. You are reminded of the University’s honor policy which requires you do your own work and not give or receive assistance on this exam.
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Acc 311 - Exam II Form A – Page Spring 2009 SECTION I - MULTIPLE CHOICE (50 points - 2 points each). - Please choose the BEST answer for each question and record your answer on the Scantron answer sheet. 1. A $25,000 overstatement of the 2010 ending inventory was discovered after the financial statements for 2010 were prepared. The effect of the inventory error on the 2010 financial statements was A. current assets were overstated and net income was understated. B. current assets were understated and net income was understated. C. current assets were overstated and net income was overstated. D. current assets were understated and net income was overstated. 2. Under the LIFO cost flow assumption during a period of inflation (assuming no LIFO liquidation), which of the following is false ? A. Cost of goods sold will be lower than under FIFO. B. Gross margin will be lower than under FIFO. C. Net Income will be lower than under FIFO. D. Ending inventory will be lower than under FIFO. 3. At year end, Chief Company has a balance of $10,000 in accounts receivable of which $1,000 is more than 30 days overdue. Chief has a credit balance of $100 in the allowance for doubtful accounts before any year-end adjustments. Chief estimates its bad debts losses at 1% of current accounts and 10% of accounts over thirty days. What adjustment should Chief make to the allowance for doubtful accounts?
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This note was uploaded on 07/13/2010 for the course ACC 311 taught by Professor Charrier during the Fall '08 term at University of Texas at Austin.

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Practice Exam 2 Fall 09 - Exam #: Fundamentals of Financial...

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