Mini%20Test%201%20SP%2008%20%20Version%20B0

Mini%20Test%201%20SP%2008%20%20Version%20B0 - to The...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 6
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 8
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 10
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: to The recognition of a revenue could be accompanied by which of the following? A. a dee rease in assets B. an increase in liabilities C. an increase in assets 1}. The contribution of capital by an owner E. None of the above Ending inventory is equal to the cost of items physically on hand plus: 11. items sold. still in transit (fob. shipping point). B. ltems purchased, still in transit (hob. shipping point]. C. items purchased. still in transit (fob. destination}. D. A at B E. None of the above would be added to the physical inventory. Panther Co. had a warranty liability oF$4flflflflfl at the beginning of zoos. and $45fltflflfl at end of 2006. Each year Panther records wananty expense based on an estimate of the value of future warranty claims that will be incurred as a result ot‘eurrent year product sales. For EDGE. Panther estimated future warranty work to be approximately 1% of current year sales. During Eflfld Panther incurred $250,00fl of actual cost to service customer warranty claims. 1What was the amount of warranty expense recorded in Eflflfi? A. SEQ. B. $21343 ,flflfl C. $31311] ,flflfl D. $2 5t] .flflfl E. None of the above Cyclone Co. uses the periodic inventory system and had the following inventory purchases during the yeaL .fl of East Per Extended m Transaction Units m 'v'aluc l-Jan Beg. inventory 200 $9.00 $ LEUGDCI I E—Apr Purchase 100 5101K! $ LUUUDCI R—Jul Purchase IUD SI LUFI Fri |.|UU.UC| 22-Sep Purchase ltllJ Slllltl $ m $ ilflflllll During the year, 3131:! units were sold at a price of $3!) each. What was ending inventory and cost of goods sold on 1331 under the LIFO cost [low assumption? 35-. sslcoanasssm B. sarcoma seam C‘. stsoo and $3.3m D. $3.3m and static E. seam and sssoc On December 15., acne. Transport Company accepted delivery of merchandise which it purchased on credit. as of December 3 l. EDDIE. the company had neither recorded the transaction not included the merchandise in its inventory because the seller's invoice had not been received. The effect of this omission on its balance sheet at December 3], zoos, {end of the accounting period} was that A. assets and stockholder‘s equity were overstated but liabilities were not affected. 13. stoekholder’s equity was the only item affected by the omission. C. assets and stockholders' equity were understated but liabilities were not affected. D. assets and liabilities were understated but stockholders' equity was not affected. E. Transport was correct in their treatment ofthis transaction 3:: the balance sheet is therefore correct. 6. Which of the following statements are true‘i' A. ICute of the benefits of having a centralized purchasing department is that it improves accuracy and efficiency by allowing the employee working closest with the ordered item (and thus most knowledgeable about what is needed} to handle the purchase. B. A company policy requiring that invoices be stamped “ paid“ is a corrective control procedure designed primarily to alert management if an h-"P clerk pays the same invoice twice. C. The receiving report once accepted by accounting is a legally binding contract. D. A company philosophy encouraging management to hire competent workers and to train employees enhaneEs the control environment. E. Botth-t D For questions 'i' through it] please indicate whether the account would be increased or decreased by a debit entry. '1". Retained Earnings A. Increased B. Decreased ii. Prepaid Insurance Expense A. Increased El. Dcerca sed 9. Aeeo unts Payable A. Increased 13. Decreased It}. Cost offioods Sold A. increased 13. Decreased l I. On September 2t}, 2006, Precision Electric Company purchased $ifl.flflfl of stereo equipment for resale on credit. subject to the terms Eilfi, mm. The company records all purchases using the gross method. if the company paid for these goods on Sept. 23. the entry made to record the payment should include ar'an A. $2flfl dehit to Purchases discounts. E. $lfl,flflfl credit to Accounts payable. C. ssscc credit to Cash. D. iilflflflfl debit to Merchandise Inventory E. None of the above is correct. 12. Which of the following control procedures [found in the purchasing 3: disbursement cycle} would help mitigate the risk that the wrong goods are ordered {please choose the hes: answer]. A. The accounting department should independently match [i.e. compare] the voucher package components prior to payment. B. The receiving department should periodically review open purchase orders. C. The requisitioning department should match (Le. compare} their copy of the purchase order to the purchase requisition. D. Departmental inventory requisitions should be based on a monitored need and require supervisory approval. E. None of the above [3. At the end ot‘2009. the following data were taken from the accounts ot‘Albert Company: Contributed Capital 300,000 Retained Earnings, 002009 300,000 Total Revenue Earned during 2000 130.000 Total Expenses incurred during 2000 200.000 Total Cash Collected during 2000 125.000 Total Expenses Paid during 2000I 100.000 The 2000 closing entries would include: A. $2 50000 net credit to Retained eamings. B. $50,000 net debit to Retained camings. C. $25000 net credit to Retained earnings. D. $50,000 net credit to Retained earnings. E. $350000 nct credit to Retained Earnings l4. Recognizing cxpccted losscs immediately, but deferring expeetcd gains. is an example of: A. Materiality. B. IEonservalism. C. Cost efi'ectiveness. D. Timeliness. 15. The following represents seleeted information taken from Aeorn Corporation‘s annual report dated 12:“313‘2003: Net Sales 50.5 00.000 Total Assels 53,000,000 End ofy‘ear halanoe irI easlt and cash equivalents {CCE} 3000.000 Total liabilities 54.5 00.000 Total Cash Collected on customer aceounls 54.T00,000 'l'otal Cash paid to vendors on amounts owed 53.200.000 Operating Er: pens: 53 .5 00.000 Total Deferred Expenses 51,115,000 1|Ip‘r'hat was the total amount of stockholders equity reported by Acorn at 1233119008? A. sasooaoo a. to e. $1,5oo,ooo o. ${l,500,000}defieit E. None of the above [6. Explain how the eolleetion of amounts due on outstanding eustomer accounts affects the aeeounting equation. A. Both assets and equity increase. B. Both liabilities and assets increase. (3. Assets increase and liabilities decrease. D. Liabilities inerease and attuin deereases. E. The equation will not change IT. 4‘ In class we discussed that a business could categorize it's “sources of Funds" in to three broad categories. Which of the following 1would be considered an example ofonc ot‘thcse three sources? A. Limbo Corporation borrowed $250,000 from a finance company. The company is charging Limbo T91: interest and expects to be paid back in monthly installments over the next 8 years. l3. Limbo Corporation was unable to obtain traditional bank financing and instead dealt with a venture capitalist firm obtaining 3250.00!) cash. Limbo must repay 3150.00!) ot‘thc cash received within 5 years plus 12% interest. The remaining $100,000 provided by the VC firm gave them a 51% ownership stake in Limbo Corporation. C. Limbo Corporation collected $250,000 of Accounts Receivable crEated in the ordinary course of business. D. fill ot‘thc above are examples of the three broad sources of funds discussed in class. E, A and C only l8. * In class we used the “sources of funds” discussion {see question #l T} asjustification for what aeeou nting eoneept':1 A. Accrual basis accounting versus cash basis 13. Justification for depreciation ot‘long lived assets to be thought of as "the recovery ot‘eost" versus a true measure of the decline in value C. The equality of the basic accounting equation 13- "cspenditure"at"espense" E. None of the above represent the reasons for the discussion I“). Deferred Revenue is reported on the balance sheet. on the income statement. on the statement ot‘rctained earnings only as a disclosure in the notes to the financial statements None of the above is correct. meow? 20. Judy has recently hired a nanny for her 8 month old son. During the interview, candidates were informed that they must agree to random drug at alcohol testing as a condition ot‘their employment. What type of control procedure is the landom drug as alcohol testing ‘? A. Preventative l3. Detective C. Corrective I]. Primarily Detective and Colreetive and potentially preventative E. Primarily Detective and potentially preventative 21. Adam‘s Apples opened business on January 1, 2W6, and paid for two insurance pelieiea effective that date. The liability.r peliejir waa $36.flflfl fer three years bl" coverage, and the crap damage peliey was $24,0flfl fer a bite—year ten-n. Which ef the fellewing adjusting entries wpuld be made by Adam at 1231:2003? A. DEBIT CREDIT Prepaid lnaurariee afljflb Cash fiflflflfl lnsuranee Expense E-IJIH} Prepaid Insuranee 2411110 B. DEBIT CREDIT insurance Expense IEIHIII Prepaid Infiuranei: IEJ'H'H'II C. naaiT CREDIT Tnfiurance Expenae Efififi'l Crap Damage Payable 24,012!) . _ fiflJIH} Prepaid lnauranel: D. DEE-1T CREDlT Prepaid Insurance 24am: [nauranee Expense 34,000 E. Hone et‘tlie above 22. Each W1“ 1Whiner Corporation is required to make a single payment to its landlord pre-paying the rent for the next 12 months. 1iiifhiner’s rental payment covers the period beginning on W1“ and ending on tiflflth of each year. After making year —end adjustments Whiner had the following actiyityr in its pro-paid rent account for the year ended Eflfltl. Pre paid Re nt BB LI" 1 .I" 20139 lflflflfl 24,1301] 22.1300 EB 12f31f2flfl9 12.1301] lILiiyen the above information. what was the amount of cash paid by Whiner on "H NEWS]? A. "324.13% B. $22 .t'lt'lt'l C. ".5 l 2 ,{JUU D. $ 34 .flflfl H. None of the above 23. Which of the following statements best describes Whiner’s rental agreement at TI 1 flflflfl versus ?.-’1f2flfl9'? A. 1|iti’ltiner‘s annual rent payment increased by $4.flflfl between "H HUB and "H nos. B. Whiner‘s annual rent payment decreased by $2.th0 between 7!] IDE and I"! | #09. C. llNhiners annual rent payment increased by $1M“? between FINDS and Tflffl‘}. D. Whiner‘s annual rent payment increased by $14,131:“) between "H [£133 and Wlfflg. E. The problem does not provide the necessary information to answer this question. 24. CNH started zone with $lflfl.flflfl of merchandise on hand. During 2131345, $25G,flflfl in merchandise was purchased on account with credit terms of [£10 nf45. The shipping terms were f.o.b. shipping point with CNII paying total freight charges of $T.flflfl. Before the invoice was paid, merchandise with an invoice amount ot‘SSfl.DDD was returned to the vendor. All purchase discounts were taken. CNH reported cost of goods old totaling $175.,flflfl. What is the dollar amount of beginning inventory reported at liltiflflT? A. $20G ,flflfl B. Bi] 5 .flflt] C. l; I T 5.1111311! D. $ 1 311131313 E. 3 l flflflflfl 25. Which of the following statements about stockholders‘ equity is eorreet‘i' A. .‘itocl-tlioldersr equity is the shareholdersr residual interest in the company resulting From the difference in assets and accrued liabilities. B. Stuckhulders' equity accounts can be increased by debits or credits depending on whether or not the company has reported a profit for the current year. C. The transaction recording the payment of an amount due to a supplier has no etlect on stockholders' equity. D. Stockholders' equity results only from contributions of the owners. E. None of the above is correct. 2d. Which of' the following businesses would n_ot have cost of goods sold. A. Ajewelry store B. A grocery store C. A law firm D. A manufacturer of batteries E. All of the above would disclose cost of goods sold Continued on next page!!! 1D 2?. The employees of Heat Clothes work Monday through Friday. Every other Friday the company issues payroll cheeks totaling $30,000. The current pay period ends on Friday. July 10th. Neat Clothes is now preparing quarterlyr financial statements for the three months ended June 30. 1What is the adjusting entryr to record seemed salaries at the end of June? A. naan casnn Salaries expense 01m} Prepaid Salaries 24,000 Salaries Payable 30,000 E. DEBIT CREDIT Salary Expense 30.000 Cash 30.000 (3. DEBlT CREDlT Salaries expense 24.000 Salaries Payable 24.000 D. DEBIT m Salary Expense [1.000 Salary Payable 0.000 E. None of the above 11 ...
View Full Document

This note was uploaded on 04/28/2011 for the course ACCY 202 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

Page1 / 10

Mini%20Test%201%20SP%2008%20%20Version%20B0 - to The...

This preview shows document pages 1 - 10. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online