ACC 101 Principles of Financial Accounting Summer 2008 Name: Instructions: Read

Question

ACC 101 Principles of Financial Accounting Summer 2008 Name: Instructions: Read each question carefully and place your answers on the scantron from provided. You may do your calculations directly on the examination booklet, but be sure all answers appear on the scantron sheet. Use a No. 2 pencil and darken only one letter per question. Be sure to return this entire exam to your instructor. Part I. Multiple Choice (30 points-1 each) 1. Which of the following financial statements reports information as of a specific date? a. Balance sheet b. Retained earnings statement c. Statement of cash flows d. Income statement 2. If cash account has credit postings of $6,000; debit postings of $11,000; and an ending normal balance of $28,000, which of the following was its beginning balance? a $34,000 b. $23,000 c. $28,000 d. $33,000 3. Which of the following is a real account? a. accounts receivable b. sales discount c. sales d. income summary account 4. One of the accounting concepts upon which deferrals and accruals are based is: a. matching b. cst c. price-level adjustment d. business entity 5. What is the type of account and normal balance of Allowance for Doubtful Account? a. Contra Asset, Debit b. Contra Asset, Credit c. Asset, Debit d. Asset, Credit

Explanation / Answer

Only First 8 questions are ansered

1) a) Balance Sheet

2) Cash Opening Balance = Cash balance at the end+ Credit postings- Debit postings
= $ (28000+6000-11000)
= $ 23000
Hence, answer is 'b' $ 23000.

3) a) Accounts Receivable

4) a) Matching

5) b) Contra Asset, Credit

6) Inventory at the end = 20-10+30-20+10 = 30 units
Consisting of following purchases- (FIFO method)
- 20 units on Nov 10 @ $ 21 p.u - 20*21 = $ 420
- 10 units on Nov 30 @ $ 22 p.u - 10*22 = $ 220
Total    $ 640
Hence, answer is 'a' $ 640.

7)  Inventory at the end = 20-10+30-20+10 = 30 units
Consisting of following purchases- (LIFO method)
- 10 units from opg bal. @$20 p.u - 10*20 = $ 200
  - 10 units on Nov 10 @ $ 21 p.u - 20*21 = $ 210
- 10 units on Nov 30 @ $ 22 p.u - 10*22 = $ 220
Total      $ 630

Hence, the answer is 'd' $ 630.

8) b) $ 90, since cost is lower.

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