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Unformatted text preview: Exam #: Fundamentals of Financial Accounting ACC 311 Spring 2010 Exam 2, 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 XX 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 Universitys honor policy which requires you do your own work and not give or receive assistance on this exam. Acc 311 - Exam 2 Form A page 1 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 If Southwest Airlines determines that an asset has been impaired by $2 million then which of the following will occur at the end of the current accounting period? A. No action will be taken to recognize its impairment until the asset is sold. B. The impairment will not affect the accounts but will be disclosed in the footnotes. C. A debit to retained earnings will be recorded for the effect of the loss thereby bypassing the income statement. D. A credit to the asset's account will be recorded for the amount of the loss. 2 Moore Company purchased an item for inventory that cost $20 per unit and was marked to sell at $30. It was determined that the replacement cost is $18 per unit. No purchases in the near future are anticipated. Using the lower-of- cost-or- market rule, the per unit valuation for inventory should be A. $18.00. B. $20.00. C. $25.00. D. $30.00. 3 Residual value is A. equal to the acquisition cost of a tangible long-lived, productive asset. B. the same as book value of an asset. C. the amount expected to be recovered when an asset is disposed of at the end of its estimated useful life....
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- Fall '08
- Financial Accounting