F04_136Amidterm1

F04_136Amidterm1 - Anderson ECON 136A Midterm#1 Name Please write your name perm and ECON 136A Fall 2004 on both your scantron and blue-book You

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
October 20, 2004 Anderson ECON 136A Midterm #1 Name _________________________ Please write your name, perm # and ECON 136A Fall 2004 on both your scantron and blue-book. You may take this exam with you. Answer the multiple choice questions (#1-25) on the scantron and the exercises (#26- 28) in your blue-book. ------------------------- Please answer on scantron. 1. Under the cash basis of accounting, revenues are recorded a. when they are earned and realized. b. when they are earned and realizable. c. when they are earned. d. when they are realized. 2. Adjusting entries are necessary to 1. obtain a proper matching of revenue and expense. 2. achieve an accurate statement of assets and equities. 3. adjust assets and liabilities to their fair market value. a. 1 b. 2 c. 3 d. 1 and 2 3. Why are certain costs of doing business capitalized when incurred and then depreciated or amortized over subsequent accounting cycles? a. To reduce the federal income tax liability b. To aid management in cash-flow analysis c. To match the costs of production with revenues as earned d. To adhere to the accounting constraint of conservatism 4. When an item of expense is paid and recorded in advance, it is normally called a(n) a. prepaid expense. b. accrued expense. c. estimated expense. d. cash expense. 5. An accrued expense can best be described as an amount a. paid and currently matched with earnings. b. paid and not currently matched with earnings. c. not paid and not currently matched with earnings. d. not paid and currently matched with earnings. 6. Year-end net assets would be overstated and current expenses would be understated as a result of failure to record which of the following adjusting entries? a. Expiration of prepaid insurance b. Depreciation of fixed assets c. Accrued wages payable d. All of these
Background image of page 1

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

View Full DocumentRight Arrow Icon
Midterm #1--Page 2 7. If the inventory account at the end of the year is understated, the effect will be to a. overstate the gross profit on sales. b. understate the net purchases. c. overstate the cost of goods sold. d. overstate the goods available for sale. 8. Forbes Company paid $7,200 on June 1, 2004 for a two-year insurance policy and recorded the entire amount as Insurance Expense. The December 31, 2004 adjusting entry is a. debit Insurance Expense and credit Prepaid Insurance, $2,100. b. debit Insurance Expense and credit Prepaid Insurance, $5,100. c. debit Prepaid Insurance and credit Insurance Expense, $2,100 d. debit Prepaid Insurance and credit Insurance Expense, $5,100. 9. Jim Wynn, M.D., keeps his accounting records on the cash basis. During 2004, Dr. Wynn collected $180,000 from his patients. At December 31, 2003, Dr. Wynn had accounts receivable of $25,000. At December 31, 2004, Dr. Wynn had accounts receivable of $35,000 and unearned revenue of $5,000. On the accrual basis, how much was Dr. Wynn's patient service revenue for 2004?
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/18/2011 for the course ECON 136A taught by Professor Anderson during the Spring '08 term at UCSB.

Page1 / 12

F04_136Amidterm1 - Anderson ECON 136A Midterm#1 Name Please write your name perm and ECON 136A Fall 2004 on both your scantron and blue-book You

This preview shows document pages 1 - 3. Sign up to view the full document.

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