Sample+Midterm+exam

Sample+Midterm+exam - 1 | 1 3 Problem 1 (50 marks; 50...

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Unformatted text preview: 1 | 1 3 Problem 1 (50 marks; 50 minutes) 1 B 11 C 21 C 2 A 12 B 22 C 3 A 13 D 23 C 4 D 14 A 24 B 5 C 15 C 25 B 6 B 16 A 7 C 17 B 8 A 18 A 9 D 19 B 10 D 20 B Multiple choice: Please indicate the correct answer to each question in the space provided on page 2 of the answer sheet of the exam. 1. Which of Dell’s financial statements would you look at to determine whether Dell will be able to pay for the inventories invoice due in 30 days? A. Income statement. B. Balance sheet. C. Statement of retained earnings. D. Statement of cash flows. E. None of above. 2 | 1 3 2. which of the following events cause changes in a corporation's retained earnings? A. Net income or net loss and declaration of dividends. B. Declaration of dividends and issuance of stock to new stockholders. C. Net income, issuance of stock, and borrowing from a bank. D. Declaration of dividends and purchase of new machinery. E. None of above. 3. Which of the following direct effects on the accounting equation is not possible as a result of a transaction? A. Increase a liability and decrease an asset. B. Increase stockholders' equity and increase an asset. C. Increase an asset and decrease an asset. D. Decrease stockholders' equity and decrease an asset. E. None of above. 4. Which of the following would shorten the operating cycle which leads to an improvement in cash flows? A. Faster collection of accounts receivables. B. Selling inventory in a shorter period of time. C. Increasing the number of customers who paid cash to buy our goods. D. All of the above would shorten the operating cycle. E. None of above. 5. What would be the effect on year 2009’s income statement of a utility bill received on December 27, 2009 but which will not be paid until January 10, 2010? A. No expense will be recognized until the bill is paid in January. B. Net income would increase by recording the expense in December. C. Recording the expense in December when it is incurred will increase expenses. D. Net income will be decreased when we pay the bill in January. E. None of above. 3 | 1 3 6. The accounts payable account has a beginning balance of $12,000 and we purchased $50,000 of inventory on credit during the month. The ending balance was $10,000. How much did we pay our suppliers during the month? A. $50,000 B. $52,000 C. $60,000 D. $62,000 E. None of above 7. An extraordinary item is A. the amount reflected on the income statement for adjustments made to balance sheet accounts when applying different accounting principles. B. the result of the disposal of a major segment of the business. C. a gain or loss that is both unusual in nature and infrequent in occurrence. D. a prediction of earnings for future accounting periods....
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This note was uploaded on 12/20/2011 for the course ACCT/MGMT 2010 taught by Professor A during the Spring '11 term at HKUST.

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Sample+Midterm+exam - 1 | 1 3 Problem 1 (50 marks; 50...

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