Sample Exam 2 - Accounting 209 Spring 2007 Name Exam#2 FORM...

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Accounting 209 Name ____________________________________ Spring, 2007 Exam #2 FORM A (Solutions at end of exam) Use the following to answer questions 1-7. (2 points each) Determine the account that should be credited for each transaction given below, then mark your scantron with the letter of the appropriate account. Note that the same letter is used to identify more than one account. Each account may be used once, more than once, or not at all. a. Accounts payable a. Depreciation expense a. Supplies expense b. Accounts receivable b. Equipment b. Unearned revenue c. Accumulated depreciation c. Notes payable d. Advertising expense d. Revenue e. Cash e. Supplies 1. Company borrows cash from bank 2. Adjusting entry made to record supplies used during the period 3. Received but did not pay bill for advertising in local newspaper 4. Payment made on account 5. Recorded depreciation on equipment 6. Customers billed for services performed 7. Performed services for which cash was received previously COMPLETION (3 points each) For questions 8 - 17, complete each sentence with the appropriate term, and mark your scantron with the corresponding letter. Note that the same letter is used to identify more than one term. a. accumulated depreciation a. general journal a. specific ID b. beginning inventory b. general ledger b. trial balance c. depreciation expense c. Income summary c. weighted average d. ending inventory d. LIFO e. FIFO e. posting 8. A temporary account used only during the closing process is the ___________ account. 9. A(n) __________ is a list of each accounts and its balance at a specific point in time and is used to verify that debits equal credits in the ledger. 10. A(n) __________ is a chronological record of all transactions entered into by a business; it is also called a book of original entry 11. The __________ is the file or book that contains all of a company’s accounts. 12. Most long term assets often a related contra asset called __________ that shows the total amount of the asset depreciated to date.
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13. ___________ is the process of transferring information from the general journal to the general ledger. 14. Cost of goods sold is equal to beginning inventory plus the net cost of purchases less ___________. 15. Inventory costs are decreasing. Company management chooses _____ since it is a middle-of-road inventory policy that avoids extremes. 16. Inventory costs are decreasing. The company’s board of directors wants to minimize income taxes so decides to use the ______ inventory cost flow method. 17. Inventory costs are increasing. Company management wants to report high income so decides to use the _______ inventory cost flow method. MULTIPLE CHOICE (4 points each) Use the following information to answer the next two (2) questions. Franklin Company prepares annual financial reports and consequently adjusts the accounts only at the end of each fiscal year. The company’s accountant prepared the following trial balance after adjustments as of December 31, 2007: Debit Credit Cash $ 440 Accounts receivable 220 Office supplies 240 Office equipment 2,500 Accumulated depreciation, Office equipment $ 250 Accounts payable 400 Common stock 2,000 Retained earnings 440 Dividends 250 Fees earned 750 Rent expense 190 $2,940 $2,940 However, the accountant failed to make two adjusting entries. Supplies left on hand at the end of the period amounted to only $180, and depreciation for the year was not recorded. The office equipment was purchased January 1, 2006 and has an expected life of 10 years. 18. Which of the following entries is necessary to make the adjustment for supplies used? a. Supplies 60 Supplies expense 60 b. Supplies expense 60 Supplies 60 c. Supplies 180 Supplies expense 180 d. Supplies expense 180 Supplies 180 e. none of the above
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