Fin_Acc_311_Exam_1 - Exam #: Fundamentals of Financial...

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Exam #: Fundamentals of Financial Accounting ACC 311 Fall 2010 Exam 1, 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 13 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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Form A Page 3 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. Assume that each question supplies all the information that you need to determine the correct answer (unless otherwise stated). 1 Pella Company purchased a machine that cost $50,000 and had an estimated useful life of 10 years (no residual value) on January 1, 2006. The company used straight-line depreciation and recorded $5,000 of depreciation expense each year. The book value at the end of 2009 , would be A) $50,000 B) $40,000 C) $35,000 D) $30,000 E) None of the above is correct 2 Sarah, Inc. had the following accounting information at the end of 2008: Sales revenue 70,000 Cash received from customers 54,000 Cost of goods sold 30,000 Rent expense 1,000 Wage expense 5,000 Advertising expense 3,000 Cash paid out for operations 4,000 What amount should be reported for net income for 2008? A) 15,000 B) 31,000 C) 50,000 D) 61,000 E) none of the above 3 Which of the following would not cause stockholders’ equity to change? A) collection of an account receivable B) providing a product or service to customers (cash not yet collected) C) sale of additional stock to investors D) payment of a cash dividend to stockholders 4 Assume the 2009 income statement reported total sales revenue of $1,200,000. The 2008- 2009, comparative balance sheets showed that accounts receivable increased by $25,000 and the unearned revenue account decreased $15,000. The cash inflow from customers for
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Fin_Acc_311_Exam_1 - Exam #: Fundamentals of Financial...

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