S05 MT1 1230

S05 MT1 1230 - April 20, 2005 Anderson ECON 136A- 9:30...

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April 20, 2005 Anderson ECON 136A- 9:30 MIDTERM #1, 9:30 CLASS v. 1 Name _________________________ RETURN THIS EXAM WHEN YOU ARE FINISHED. Answer questions 1-25 on your scantron and the rest in your blue-book. ------------------------- ANSWER ON YOUR SCANTRON. 1. The income statement presents: a. the sources and uses of cash over a specified period of time, requiring the application of judgment (estimates) and is not transaction based. b. activities for a stated period of time, requiring the application of judgment (estimates), and is transaction based. c. is a pain in the neck to present because of various classification issues. d. the financial position as of a specific date, requiring the application of judgment (estimates) and is transaction based. 2. Under accounting principles generally accepted in the United States of America, which of the following statements are true: a. Revenue is recorded when the payment has been received and expenses are recorded when paid. b. Revenue is recorded when the expense for the revenue has been paid. c. Revenue is recorded when it has been earned and expenses when the associated benefit has been received. d. Revenue is recorded when estimable by the Company's management and expenses are recorded when it is reasonably determined. 3. Ed Sloan wants to withdraw $25,000 (including principal) from an investment fund at the end of each year for five years. How should he compute his required initial investment at the beginning of the first year if the fund earns 10% compounded annually? a. $25,000 times the future value of a 5-year, 10% ordinary annuity of 1. b. $25,000 times the present value of a 5-year, 10% ordinary annuity of 1. c. $25,000 divided by the future value of a 5-year, 10% ordinary annuity of 1. d. $25,000 divided by the present value of a 5-year, 10% ordinary annuity of 1. 4. Which of the following is a limitation of the balance sheet? a. Judgments and estimates are used. b. Current fair value is not reported. c. All of these d. Many items that are of financial value are omitted.
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MIDTERM #1, 9:30 CLASS v. 1--Page 2 5. The statement "risk is commensurate with reward" means that the higher the perceived risk, the: a. No impact on the interest rate b. Lower the interest rate c. Higher the interest rate d. More likely an investor is to abstain from investment. 6. The basis for classifying assets as current or noncurrent is the period of time normally required by the accounting entity to convert cash invested in a. receivables back into cash, or 12 months, whichever is longer. b. tangible fixed assets back into cash, or 12 months, whichever is longer. c. inventory back into cash, or 12 months, whichever is longer. d. inventory back into cash, or 12 months, whichever is shorter.
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This note was uploaded on 05/18/2011 for the course ECON 136A taught by Professor Anderson during the Spring '08 term at UCSB.

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S05 MT1 1230 - April 20, 2005 Anderson ECON 136A- 9:30...

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