Prelim2ver22005solution - Test Section AEM 221 Financial...

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Test #________ Section #__________ AEM 221 Financial Accounting Prelim #2 Fall 2005 Version 2 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. Will Company's independent CPA discovered that the ending inventory for 20B had been overstated by the company $2,000. Before the correction, what was the effect in the 20B income statement because of the overstatement of the ending inventory? A) Pretax income was understated by $2,000. B) Cost of goods sold was understated by $2,000. C) Pretax income was overstated by $2,000. D) A and B are correct. E) B and C are correct. 2. On March 1, 20D, Maddux Company purchased a producing oil well at a cash cost of $1,000,000. It is estimated that 1,500,000 barrels of oil can be produced over the remaining life of the well. By December 31, 20D (end of the accounting period), 150,000 barrels of oil were produced and sold. The amount of depletion expense for 20D on this well would be A) $100,000. B) $125,000. C) $ 90,000. D) $ 85,000. 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
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Prelim2ver22005solution - Test Section AEM 221 Financial...

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