AC550 Exam - 1(TCO A Listed below are several information...

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1. (TCO A) Listed below are several information characteristics and accounting principles and assumptions. Match the letter of each with the appropriate phrase that states its application. (Points: 30) Matching: Answer Potential Matches: : Historical cost principle 1: Stable dollar assumption 2: Notes as part of necessary information to a fair presentation. 3: Earnings process completed and realized or realizable. 4: Valuing assets at amounts originally paid for them. 5: the impact of an item on the overall financial operations of a company. 6: Accruals and deferrals in adjusting and closing process (Do not use going concern). 7: Affairs of the business distinguished from those of its owners. 8: Presentation of error-free information with representational faithfulness 9: Business enterprise assumed to have a long life. 10: Cost of providing financial information versus the benefits derived from its use. : Going concern principle : Matching principle : Monetary unit : Revenue recognition principle : Full disclosure principle : Reliability characteristic : Cost-benefit relationship : Materiality constraint : Economic entity assumption 2. (TCO B) Adjusting Entries: Unearned rent at 1/1/10 was $10,300 and at 12/31/10 was $6,000. The records indicate cash receipts from rental sources during 2010 amounted to $50,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. For each journal entry write Dr for debit and Cr for credit. (Points: 10) 3. (TCO B) Adjusting Entries: Data relating to the balances of various accounts affected by adjusting or closing entries appear below. (The entries which caused the changes in the balances are not given.) You are asked to supply the missing journal entries which would logically account for the changes in the account balances. Interest receivable at 1/1/10 was $5,000. During 2010 cash received from debtors for interest on outstanding notes receivable amounted to $5,000. The 2010 income statement showed interest revenue in the amount of $4,900.
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