Prelim_1___Ver_1___Fall_2006_1_ - TEST NUMBER AEM 221...

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TEST NUMBER_______ AEM 221 Financial Accounting Prelim #1 Fall 2006 Name ________________________________ TA’s Name ____________________________ Section # ___________ 1. This exam consists of 20 multiple choice questions and 4 problems. There are 14 pages in this packet, including the cover page; please ensure that you have all the pages. 2. Your answers to Part I should be transposed on to an optical sheet. Failure to do so will result in zero credit for Part I. 3. Your written work for Part II should be completed in the space provided. 4. You will lose points for arithmetic errors; please be careful. 5. This exam is not to leave the testing room. The exam questions and answers will be posted to Blackboard in due course. Your grades will be posted to Blackboard when complete and you may review your test during next section. 6. Read carefully and good luck! I hereby certify that I have not given or received assistance while taking this exam and have at all times abided by Cornell University’s Code of Academic Integrity. Signature: ______________________________________ Date: _____________ Points Scored Points Available Part I Multiple Choice 40 Part II Problem 1 20 Problem 2 10 Problem 3 – Part 1 19 Problem 3 – Part 2 9 Problem 4 2 TOTAL 100 1
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1. For each transaction recorded in an accounting system, the two basic equalities that must be maintained at all times are A. (1) Assets = Liabilities + Stockholders' Equity. (2) Net Income = Revenues + Expenses. B. (1) Cash Increase = Cash Inflows - Cash Outflows. (2) Net income = Revenues + Expenses. C. (1) Assets = Liabilities + Stockholders' Equity. (2) Debits = Credits. D. (1) Net Income = Revenues + Expenses. (2) Debits = Credits. E. None of the other answers are correct. 2. A landlord received $5,000 cash for December 2008's rent but the tenant's rent for December is $8,000. Which of the following is true for year ended 2008. A. $5,000 would be reported on the statement of cash flows. B. $3,000 would appear on the balance sheet as rent receivable. C. $8,000 would appear on the income statement as rent revenue earned. D. Answers A, B, and C are all true. E. None of the other answers are true. 3. In 2004, PepsiCo reported a net profit margin of 14.4%, in 2003 it was 13.2% and in 2002 it was 13.2%. Which of the following is true about PepsiCo? A. It’s net profit margin has remained constant over the three-year period. B. It reported an improved gross profit percentage in 2004 which has caused its net profit margin to increase. C. Its sales have most likely decreased causing expenses as a percentage of net sales to increase. D. Both A and B are true. E. All of the above are true. 4. Which group maintains the professional code of ethics to which CPAs must adhere?
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Prelim_1___Ver_1___Fall_2006_1_ - TEST NUMBER AEM 221...

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