SAMPLE MIDTERM – BUS 251 A. MACDONALD
This is a very long and tough accounting cycle question.
So, if you
can handle this question you are in excellent shape.
Your midterm will also have two short theoretical questions where you will
be asked to explain an accounting idea in words.
You might look at the
first section of questions at the end of each chapter – the questions titled
‘Assessing your recall’.
They will give you an idea of what to expect.
have included only one sample theory question on this exam.
The format of your midterm will be roughly as follows:
Technical questions (Accounting Cycle
And/or Preparation of F/S)
2 Theory questions
20 Multiple Choice questions
SECTION 1, TECHNICAL QUESTIONS:
THE ACCOUNTING CYCLE (28 MARKS = 28 MINUTES)
Andy’s Yard Care Service Company Limited (AYC)
Andy Smith has been operating for 3 years.
The company provides lawn-
mowing, tree trimming and weeding services to private residences in the lower
Andy incorporated the company on January 1
, 2006 and contributed
equipment with a fair market value of $50,000 to the business in exchange for
common shares valued at $10,000 and a $40,000 loan, payable to Andy.
The following is the trial balance for AYC at January 1
Supplies Inventory (1)
Loan Payable (3)
Accumulated Depreciation – equipment
(1) Consists of fertilizer and topsoil, used in lawn care.
Contributed to the business January 1, 2006, estimated to have a 5 year
useful life, with no residual value.