Exam+1+Spring+2009+Key - 1 Complete or fill-in-the blanks....

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1 Complete or fill-in-the blanks. Two points for each correct blank. 1. The acronym for the accounting rules or principles used to prepare financial statements is GAAP . 2. The balancing equation for the balance sheet is: ASSETS = LIABILITES + EQUITY 3. FASB is short for FINANCIAL ACCOUNTING STANDARDS BOARD 4. Three types of inventory for a manufacturing firm include; RAW MATERIALS , WORK-IN-PROGRESS AND FINISHED/FINAL PRODUCT . 5. RETAINED EARNINGS are funds a company has chosen to reinvest in the operations of a business rather than pay out to stockholders in dividends. 6. The time required to purchase or manufacture inventory, sell the product and collect the cash is the OPERATING CYCLE . 7. The chart of accounts displays BALANCE SHEET accounts first followed by INCOME and EXPENSE accounts. (OR INCOME STATEMENT) 8. ACCOUNTS RECEIVABLE arise from sales transactions to customers on credit. 9. If a company chooses the LIFO method of inventory valuation the first inventory purchased will appear as ending inventory on the balance sheet. 10. The annual report of a publicly held company which must be filed with the SEC is a FORM 10-K .
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2 Multiple Choice Questions, place your answer (letter) on the line . Two points for each. 1. A firm purchases a new building for $100,000 and expects that the machine will have a useful life of 10 years. If depreciation in the first year is $10,000 using straight line deprecation, which of the following is true
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Exam+1+Spring+2009+Key - 1 Complete or fill-in-the blanks....

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