311-F08-Exam_II-Form-A - Exam #: ACC 311, Fundamentals of...

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Exam #: ACC 311, Fundamentals of Financial Accounting Fall 2008 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 12 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 calculator with a numerical memory function 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 1 Fall 2008 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 company purchased goods on credit with credit terms of 3/15, n/45. Although the company does not have cash available to pay within the discount period, the manager of the company is considering borrowing money to take advantage of the discount. In order to make the appropriate decision, the manager computed the annual interest rate associated with the sales discount. This annual rate is approximately A. 56%. B. 38%. C. 25%. D. 18%. 2. On December 31, 2009, the end of the accounting period, Cruise Company has on hand 10,000 units of a resale item which cost $40 per unit when purchased on June 15, 2009. The selling price is $70 per unit. On December 30, 2009, the cost had dropped to $38 per unit. In view of the large quantity of units on hand, no purchases are anticipated in the next six to nine months. At what inventory amount should the 10,000 units be reported? A. $100,000. B. $120,000. C. $350,000. D. $380,000 3. By treating sales returns and allowances, sales discounts, and credit card discounts as contra- revenues, we have the following impact A. Gross profit is reduced by sales returns and allowances, sales discounts and credit card discounts B. Gross profit is increased by sales returns and allowances, sales discounts and credit card discounts C. Gross profit is unchanged by sales returns and allowances, sales discounts and credit card discounts
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311-F08-Exam_II-Form-A - Exam #: ACC 311, Fundamentals of...

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