KU ACCT 200 - Final Exam Review (15 pages)

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Final Exam Review



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Final Exam Review

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Pages:
15
School:
University of Kansas
Course:
Acct 200 - Financial I
Financial I Documents
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FINAL EXAM REVIEW Review Sunday December 10th 3 00 6 00 PM 8 am CAPF 1020 9 30am 1111 Exam Wednesday December 13th 7 30 10 00PM Multiple Choice Review 1 At the end of October XYZ s bank statement arrives When preparing the bank reconciliation it is discovered that there were deposits in transit of 2 000 an NSF check for 200 outstanding checks for 1 400 and a bank service charge of 15 If the ledger account cash balance on 10 31 was 9 800 what should be the correct cash balance after reconciling the cash account a 9 800 b 9 585 c 10 400 d 12 015 e None of the above are correct 2 Which of the following accurately describes the concept of reliability a A number can be objectively determined using a consistent technique b Two different accountants using the same approach would determine different values for the same asset c Estimating ending inventory for quarterly reporting emphasizes reliability over timeliness d All numbers on financial statements are subjective 3 Which of the following descriptions accurately describes the concept of relevance a A sole proprietor s purchase of a car for personal use should be recorded on the financial statements of the sole proprietor s business b Accountants only record information that is useful for decision making and determining the economic performance of the company c A number can be objectively determined using a consistent technique d All assets should be recorded at their historical cost 4 Jake s Warehouse grants a 90 day warranty on all stereos Historically approximately 2 5 of all sales prove to be defective Sales in July are 100 600 In August 2 900 of defective units are returned for replacement What entry must Jake s Warehouse make at the end of July to record the warranty expense a Debit Warranty Expense and credit Cash 4 865 b Debit Warranty Expense and credit Cash 2 900 c Debit Warranty Expense and credit Estimated Warranty Payable 2 515 d Debit Warranty Expense and credit Estimated Warranty Payable 2 900 d No entry is needed at July 31 1 FINAL EXAM REVIEW Review Sunday December 10th 3 00 6 00 PM 8 am CAPF 1020 9 30am 1111 Exam Wednesday December 13th 7 30 10 00PM 5 You have decided to sell your car to your brother in law However you are not sure what the selling price should be What would be the most relevant value in deciding the price of the car a The car s original cost when you bought it five years ago b Your brother in law s estimate of what the car is worth c Your estimate of what the car is worth d The fair market value of the car Fair market value is the amount a third party a person you do not know would pay 6 Which of the following is not an example of an accrual a Interest revenue b Interest expense c Depreciation d All of the above are accruals 7 After inventory arrives at a merchandising company and is recorded the amount reported in inventory is adjusted by all but one of the following items Which one a freight in b purchases returns and allowance c quantity discounts d early payment discounts 8 Professor Shaftel wants to give you some money but he also wants to test your comprehension of the material covered in ACCT 200 Thus he has provided you with the following three options to receive the funds Assume a 4 interest rate and choose the best option or receive nothing a 3 000 000 today b 500 000 at the end of each year for 6 years c 1 000 000 today 1 500 000 at the end of three years and 500 000 at the end of the sixth year 9 Which of the following is not a contra account a accumulated depreciation b discount on bonds payable c allowance for uncollectible accounts d supplies expense 2 FINAL EXAM REVIEW Review Sunday December 10th 3 00 6 00 PM 8 am CAPF 1020 9 30am 1111 Exam Wednesday December 13th 7 30 10 00PM 10 The concept of conservatism is best illustrated in which of the following statements a Never understate your liabilities b Never understate your assets c Never overstate your assets d Never overstate your liabilities e Both a and c f Both b and d 11 Which of the following is not a special feature of preferred stock a cumulative b participating c splitting d convertible 12 If the par value of Disney s stock is 3 per share and Ellie pays 15 for one share what do you call the 12 difference a Net Income b Stock Rights c Additional Paid In Capital d Treasury Stock 13 What does FASB stand for a Federal Accounting Securities Board b Financial Accounting Securities Board c Generally Accepted Accounting Principals e Financial Accounting Standards Board 14 The term normal balance refers to a the amount a company would like to keep in an account at all times b the debit side of the T account c the side where increases to the account are generally found d the amount of cash that is typically found in a specific bank account 15 Name the agency that Congress created in 1930 to make and enforce financial reporting rules a FASB b CPA c GAAP d SEC 3 FINAL EXAM REVIEW Review Sunday December 10th 3 00 6 00 PM 8 am CAPF 1020 9 30am 1111 Exam Wednesday December 13th 7 30 10 00PM Adjusting and Reversing Entries Mr Horton starts his own bakery specializing in cupcakes Make the appropriate entries for Mr Horton s Bakery based on the transactions described below 1 On Jan 1 Mr Horton sold common stock in the amount of 500 000 cash 2 On March 31 Mr Horton purchases a giant oven The oven cost 320 000 Mr Horton paid 120 000 cash and signed a note for the remaining amount Interest of 10 is compounded annually and due in 1 year The oven has a useful life of 10 years a salvage value of 5 of cost and will be depreciated using the double declining balance depreciation method 3 On July 1 Mr Horton paid cash for prepaid insurance in the amount of 12 000 This will cover Mr Horton s store for 4 years 4 On October 1 Ms Maneth signed a contract with Mr Horton to have 3 dozen cupcakes delivered to her apartment on the last day of every month for 4 months Ms Maneth paid Mr Horton the entire contracted amount of 2 000 they are big cupcakes upon signing the contract 5 On October 31 Mr Horton received and paid his water bill of 1 000 4 FINAL EXAM REVIEW Review Sunday December 10th 3 00 6 00 PM 8 am CAPF 1020 9 30am 1111 Exam Wednesday December 13th 7 30 10 00PM 6 On November 15 Ms Zink bought cupcakes on account for 900 7 Make the adjusting entries related to problem 2 above 8 Make the adjusting entries related to problem …


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