ACCT504 Midterm Exam 2

1.

Question :

(TCO A, B, C) External users want answers to all of the following questions except:

Points Received:

3 of 3

2.

Question :

(TCO C) Issuing shares of stock in exchange for cash is an example of a(n):

Points Received:

3 of 3

3.

Question :

(TCO C) Which activities involve putting the resources of the business into action to generate a profit?

Points Received:

3 of 3

4.

Question :

(TCO A) Resources owned by a business are referred to as:

Points Received:

3 of 3

5.

Question :

(TCO C) Jamie Company recorded the following cash transactions for the year:

Paid $70,000 for salaries.
Paid $20,000 to purchase office equipment.
Paid $6,000 for utilities.
Paid $7,000 in dividends.
Collected $130,000 from customers.

What was Jamie's net cash provided by operating activities?

Points Received:

3 of 3

6.

Question :

(TCO A) On a classified balance sheet, prepaid insurance is classified as:

Points Received:

3 of 3

7.

Question :

(TCO A) Which of the following should not be classified as a current asset?

Points Received:

3 of 3

8.

Question :

(TCO A) These are selected account balances on December 31, 2007.

-Land (location of the corporation's office building) $200,000
-Land (held for future use) 300,000
-Corporate Office Building 1,200,000
-Inventory 400,000
-Equipment 900,000
-Office Furniture 200,000
-Accumulated Depreciation 600,000

What is the total NET amount of property, plant, and equipment that will appear on the balance sheet?

Points Received:

3 of 3

.

9.

Question :

(TCO B) For 2010, Mossland Corporation reported net income of $28,000; net sales $400,000; and average share outstanding 6,000. There were no preferred stock dividends. What was the 2010 earnings per share?

Points Received:

3 of 3

10.

Question :

(TCO B) At December 31, 2010, Shorts Company had retained earnings of $2,184,000. During 2010 they issued stock for $98,000, and paid dividends of $34,000. Net income for 2010 was $402,000. The retained earnings balance at the beginning of 2010 was:

Points Received:

3 of 3

11.

Question :

(TCO D) On March 1, 2010, Dillon Company hires a new employee who will start the work on March 6. The employee will be paid on the last day of each month. Should a journal entry be made on March 6? Why or why not?

Points Received:

3 of 3

12.

Question :

(TCO D) Which one of the following is not a part of an account?

Points Received:

3 of 3

13.

Question :

(TCO D) The classification and normal balance of the dividend account is:

Points Received:

3 of 3

14.

Question :

(TCO D) A debit is not the normal balance for which account listed below?

Points Received:

3 of 3

15.

Question :

(TCO D) Which of the following is not always true of the terms debit and credit?

Points Received:

3 of 3

Page:

Page:

1.

Question :

(TCO E) The time period assumption states that:

Points Received:

3 of 3

2.

Question :

(TCO E) In a service-type business, revenue is considered earned:

Points Received:

3 of 3

3.

Question :

(TCO E) Expenses sometimes make their contribution to revenue in a different period than when the expense is paid. When wages are incurred in one period and paid in the next period, this often leads to which account appearing on the balance sheet at the end of the first period?

Points Received:

3 of 3

4.

Question :

(TCO E) The following is selected information from M Corporation for the fiscal year ending October 31, 2010:

Cash received from customers $300,000
Revenue earned 350,000
Cash paid for expenses 170,000
Expenses incurred 200,000

Based on the accrual basis of accounting, what is M Corporation's net income for the year ending October 31, 2010?

Points Received:

3 of 3

5.

Question :

(TCO E) The general term employed to indicate an expense that has not been paid or revenue that has not been received and has not yet been recognized in the accounts is: