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Devry ACCT212 midterm exam 2014

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Question;Question 1.1.(TCO 1);The Accounting Equation is used to develop the organization's financial;reports. (1) Describe what owners' equity values would be if Assets are;$100,000 and Liabilities are $27,000 by showing the Accounting Equation (10;points) and (2) provide an explanation of what accounts could be found in;owners' equity. (10 points) (Points;20);Question 2.2.(TCO 1);The financial statements present a company to the public in financial terms.;(1) Which financial statement identifies where cash was generated and where;it was spent during the year (10 points), and (2) identify the three major;parts of this statement. (10 points) (Points;20);Question 3.3.(TCO 1);The accounting profession follows a set of guidelines for measurement and;disclosure of financial information called the Generally Accepted;Accounting Principles (GAAP). (1) Explain what the Stable-Monetary-Unit;Assumption is (10 points) and (2) provide an example of its application.;(10 points) (Points: 20);Question 4.4.(TCO 2);Transaction analysis results in the development of a journal entry. In the;start-up of a business, the owner contributes $750,000 of cash. (1) Name;the accounts impacted and how to use the format account name/debit or;credit/dollar amount (10 points), and (2) explain how the Accounting;Equation is impacted. (10 points) (Points;20);Question 5.5.(TCO 3);Adjusting Entries are required at the end of the period to ensure that;accrual accounting principles are applied. The building that houses the;business is depreciated at an annual rate of $14,000. Develop the;adjusting entry for year end. (1) Name the accounts impacted and how to use;the format account name/debit or credit/dollar amount (10 points), and (2);explain how the Accounting Equation is impacted. (10 points) (Points: 20);Question 1.1.(TCO 5);Internal Controls are required to safeguard assets and to ensure ethical;business practices. (1) Identify and explain the reason for any two of;the seven internal control procedures (10 points) and (2) provide examples;of how your two selected internal control procedures will meet the goal of;safeguarding assets and promoting ethical business practices. (15 points) (Points: 25);Question 2.2.(TCO 5);The bank account as a control device helps to protect cash. One of the;requirements is to conduct periodic bank statement reconciliations. Using;the following data, complete the bank statement reconciliation. (Use the;format shown on page 251 of your textbook.) (25 points);Use the information below to prepare the bank reconciliation for Collier;Cleaners for the month of September.;? The bank statement indicated bank service charges of $63.;? Outstanding checks as of September 30 amounted to $1,405.;? Deposits in transit as of September 30 amounted to $2,769.;? The ending balance per the September bank statement is $40,753.;? Collier Cleaners bookkeeper mistakenly recorded a $1,610 cash;disbursement as $1,160 for Office Supplies on check #2402.;? The bank mistakenly recorded a deposit of $2,800 as $280 on February;17.;? The bank made an EFT payment on behalf of the company for Insurance;for $3,200.;? Bank collected rent of $3,000 and a note, for $16,450, including;interest of $450.;? The ending cash balance per the books for September before any;adjustments was 28,900. (Points;25)

 

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