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Prelim2ver12005solution - Test Section AEM 221 Financial...

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Test #________ Section #__________ AEM 221 Financial Accounting Prelim #2 Fall 2005 Version 1 Name ______________________________________________________ Email Address ______________________________________________ 1. This exam consists of 15 multiple choice questions and four problems. There are 13 pages in this packet, including this cover page; please ensure that you have all 13 pages. 2. Your answers to Part I should be transposed to an optical sheet. Failure to do so will result in zero credit for this section. 3. Your written work for Part II should be completed in the spaces provided. 4. You will lose a small amount of 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 the course website in due course. Your grade will be posted to Blackboard in due course, you will have an opportunity it review this exam during the next Section. 6. Please be sure to write your test number and your section number on the top left of your optical sheet and bubble in the test number in boxes NOP of your scantron, as well as your section number on the top of this page . 7. 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 30 Part II Problem 1 22 Problem 2 19 Problem 3 22 Problem 4 7 Total 100 Extra Credit 2 TOTAL 102 Part I: Multiple Choice (30 Points) 1
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Test #________ Section #__________ 1. Which of the following is/are criteria for recording a sale? A) Title and risks of ownership have been exchanged. B) The company is reasonably assured of collecting the receivable. C) The contract price has been fixed. D) Both A and B are correct. E) All of the above are correct . 2. A company that sells magazines and collects subscription fees prior to the publication and distribution of the magazine. As the cash is received in advance from the customers, the company should record a debit to Cash and a credit to A) Sales revenue. B) Prepaid expenses. C) Unearned revenue. D) Accounts payable. E) None of the above is correct. 3. Which of the following statements is false ? A) Sales returns and allowances are always treated as a contra revenue. B) Sales returns and allowances, sales discounts and credit card discounts are always treated as selling expenses. C) Credit card discounts and sales discounts can be treated as contra revenue accounts or as selling expenses. D) Both A and C are false. 4. When a credit sale is made with terms of 2/10, net 30 on March 15 and the customer's check is received on March 24, which of the following is true about the March 24 journal entry? A) The debit to cash will equal the credit to accounts receivable because the discount was recorded on
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Prelim2ver12005solution - Test Section AEM 221 Financial...

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