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AIT705 Mid Term Test Sem 103 with Solutions

AIT705 Mid Term Test Sem 103 with Solutions - SENECACOLLEGE...

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SENECA COLLEGE FACULTY OF CONTINUING EDUCATION BUSINESS STUDIES SEMESTER 103 MID TERM TEST SUBJECT NAME: ACCOUNTING THEORY I SUBJECT CODE: AIT705  INSTRUCTOR’S NAME: DATE: OCTOBER , 2010 TIME ALLOTTED: 3 HOURS MARKS ALLOTTED: 100 MARKS WEIGHTING: 40% EXAMINATION AIDS: Non Programmable Calculator X Non Electronic English Dictionary Other:   None:  Academic Policy Section 9: Engaging in any form of academic dishonesty to obtain any type of  advantage or credit is an offence and will not be tolerated by the College.  Such offences under this policy include, but are not limited to, cheating,  plagiarism, falsification, impersonation, misrepresentation and  procurement.
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Answer all questions in the Examination Booklet. No answers marked on this question paper will be considered. PART 1 – MULTIPLE CHOICE 15 MARKS Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number and letter of your choice. For example, if the best answer for item (1) is (a), write (1) (a) in your examination booklet. If more than one answer is given for an item, the item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations. Each correct answer will be awarded 1 mark. The present value model has had a large impact on financial accounting and reporting over recent years. Items 1 to 5 are associated with the present value model. Answer each item independently of the other. 1. Which of the following combinations would not be a way to measure fair value under ideal conditions: (a) Discounted cash flow and Market value (b) Exit value and Opportunity cost (c) Value-in-use and Market value (d) Discounted cash flow and Value-in-use (e) None of the above 2. Given a world of perfect certainty, a market rate of interest of 10%, no taxes, and net assets of $200,000.00 at the end of the year 1, the accretion of discount in year 2 would be: 3. Under ideal conditions of certainty with a market interest rate of 10%, cash flows for a good economy expected to be $500.00, cash flows for a bad economy expected to be $300.00 and equal probability of each state: AIT705 MID TERM TEST SEMESTER 103 PAGE 2 OF 11
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Answer all questions in the Examination Booklet. No answers marked on this question paper will be considered.
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