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devry acct504 midterm exam




Question;ACCT504 keller;Acct Fin: Managerial Use,Anlys 11091;Grading Summary;These are the automatically computed results of your exam.;Grades for essay questions, and comments from your instructor, are in the;Details" section below. Date;Taken: 6/1/2014;Time Spent: 2 h, 28 min, 30 secs;Points Received: 140;/ 150 (93.3%);Question Type: # Of;Questions: # Correct;Multiple Choice 10 9;Essay 4 N/A;Grade Details - All Questions;Question 1. Question;(TCOs A, B, and C) Which of;the following statements concerning users of accounting information is;incorrect?;The marketing vice president is considered an;internal user.;Present and prospective creditors are;considered external users.;Regulatory authorities, such as the SEC, are;considered internal users.;The IRS is considered an external user.;Question 2. Question;(TCO C) Paying back long-term;debt is an example of a(n);non-cash investing activity.;investing activity.;financing activity.;operating activity.;Question 3. Question;(TCO A) Resources owned by a;business are referred to as;revenues.;dividends.;liabilities.;assets.;Question 4. Question;(TCO A) On a classified balance;sheet, prepaid expenses are classified as;property, plant, and equipment.;long-term investments.;intangible assets.;current assets.;Question 5. Question;(TCO B) For 2012, LBJ;Corporation reported net income of $40,000, net sales $1,400,000, and weighted;average shares outstanding of 10,000. There were no preferred stock dividends.;What was the 2012 earnings per share?;$4.00;$2.00;$14.00;$140.00;Question 6. Question;(TCO D) Which of the following;describes the normal balance and classification of the dividends account?;debit, Expense;credit, Liability;debit, Stockholders' equity;debit, Asset;Question 7. Question;(TCO E) The accrual accounting;term used to indicate an item paid in advance or the receipt of cash in advance;is;prepayment.;depreciation.;deferral.;accrual.;Question 8. Question;(TCOs A and B) A perpetual;inventory system would most likely be used by a(n);restaurant.;hardware store.;automobile dealership.;mom and pop convenience store.;Question 9. Question;(TCOs A and B) LBJ Company;recorded the following events involving a recent purchase of merchandise.;- Received goods for $100,000, terms 2/10, n/30;- Returned $5,000 of the shipment for a credit due to;damaged goods;- Paid $1,500 for freight in;- Paid the invoice within the discount period;As a result of these events, the company's merchandise;inventory;increased by $96,500.;increased by $95,000.;increased by $94,500.;increased by $94,600.;Question 10. Question;(TCO A) In periods of rising;prices, which of the following inventory methods results in the lowest income;taxes?;FIFO method;Average cost method;LIFO method;Cannot determine based on the information;given;Question 11. Question;(TCO D) Describe the process;of preparing a trial balance. What is the purpose of preparing a trial balance?;If a trial balance does not balance, identify what might be the reasons why it;does not balance. If the trial balance does balance, does that ensure that the;ledger accounts are correct? Explain.;Question 12. Question;(TCOs B and E) The Caltor;Company gathered the following condensed data for the Year Ended December 31;2010.;Cost of goods sold $;710,000;Net sales 1,279,000;Administrative expenses 239,000;Interest expense 68,000;Dividends paid 38,000;Selling expenses 45,000;Instructions;1: Prepare a multiple-step income statement for the year;ended December 31, 2010.;2: Compute the profit margin ratio and gross profit rate.;Caltor Company?s assets at the beginning of the year were $770,000 and were;$830,000 at the end of the year. To qualify for full credit, you must state the;formula you are using, show your computations, and explain your findings.;Question 13. Question;(TCO D and E) Please prepare;the following journal entries. Indicate which account should be debited and;which account should be credited, along with the dollar amount of the debit and;credit.;a: Investors invest $600,000 in exchange for 30,000 shares;of common stock.;b: Company paid rent of $3,000.;c: Company billed $5,000 for services performed.;d: Company purchased supplies of $3,000.;e: Company received $20,000 for services not yet performed.;Question 14. Question;(TCO D) Your friend Dean has hired you to evaluate;the following internal control procedures.;a: Explain to your friend whether each of the numbered items;below is an internal control strength or weakness. You must also state which;principle relates to each of the internal controls.;b: For the weaknesses, you also need to state a;recommendation for improvement.;1: Bonding of the cashiers is not required because all of;the cashiers have significant experience.;2: The treasurer is the only one allowed to sign checks.;3: All employees may operate cash registers.;4: Blank checks are stored in the safe.;5: Supervisors count cash receipts daily.


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