ACCTG 215 Fall 2013 1 Practice Quiz 1 – Solutions Name: __________________________ Student Number: ___________________ TA: _____________________________ Quiz Section Time: __________________ Instructions: There are 10 multiple-choice questions and 5 quantitative questions on the following pages. Your final answers must be entered in the spaces provided on this cover page in order to be graded. Code of Conduct: By signing below you acknowledge that you are a member of a learning community at the Foster School of Business that is committed to the highest academic standards and that you adhered to these standards while completing this quiz. Specific to this quiz, by signing below you acknowledge that you did not receive or give help to others, nor did you witness others receiving or giving help to others, during the quiz. “By signing below I affirm that I have not received assistance from any other student, that I have not provided assistance to any other students, and that I have not witnessed any students acting unethically during the administration of this quiz.” Signature: _________________________________ Date: _____________________ (Signature required) Multiple Choice Answers: 1 E 2 B 3 B 4 C 5 B 6 A 7 D 8 E 9 A 10 D Quantitative Answers: 11 $12,300 12 $6,800 13 $25,800 14 $4,200 15 $20,000ACCTG 215 Fall 2013 2 Multiple Choice Questions (1 point each) Be sure to record your answers in the spaces provided on the cover sheet. 1. IASB stands for which of the following? a. International Accounting Statements and Bylaws b. Internal Audit Standards Board c. Institutional Accounting Standards Board d. Internal Accounting Statements and Bylaws e. None of the above Answer: E (Lecture 1 and Chapter 1) 2. GoGo Company recorded the following transaction: 1/14/13 Cash $2,000 Unearned Revenue $2,000 Which of the following best describes the above transaction? a. Revenue was earned and cash was received b. Cash was received for goods/services to be provided in the future c. Cash was paid out to pay for the liability Unearned Revenue d. The Revenue account was decreased and cash was paid out e. None of the above Answer: B (Lectures 3 – 4 and Chapter 3) 3. Uknow Company’s Stockholders’ Equity totaled $55,000 at the beginning of fiscal 2012. During fiscal 2012, Uknow issued new stock for $5,000 cash and declared and paid a cash dividend totaling $10,000. At the end of fiscal 2012, Uknow reported net income of $15,000. What is the balance of Uknow’s Stockholders’ Equity at the beginning of fiscal 2013? a. $55,000 b. $65,000 c. $75,000 d. $85,000 e. None of the above Answer: B (Lecture 4 and Chapter 3)ACCTG 215 Fall 2013 3 4. On November 1, 2011 UCan Company prepaid $60,000 of rent to use an office building for 5 years. The building is the only place that UCan rents. On the December 31, 2011 financial statements, prepaid rent was $58,000. What is prepaid rent on the December 31, 2012 Balance Sheet? a. $48,000 b. $12,000 c. $46,000 d. $0 e. None of the above Answer: C (Lecturer 4 and Chapter 3) 5. A current asset is defined as: a. An asset to be consumed, sold, or converted to cash within one year or the firm’s operating cycle, whichever is shorter b. An asset to be consumed, sold, or converted to cash within one year or the firm’s operating cycle, whichever is longer c. An asset that is linked to a specific current liability account d. An asset to be consumed, sold, or converted to cash within 90 days. e. Cash and other highly liquid investments. Answer: B (Lecture 4 and Chapter 3) 6. Which accounts increase when debited? a. Accounts Receivable, Utilities Expense and Equipment b. Cash, Accounts Payable, and Utilities Expense c. Service Revenue, Notes Payable, and Stockholders’ Equity d. Prepaid Rent, Stockholders’ Equity, and Service Revenue e. Accounts Payable, Prepaid Rent and Utilities Expense Answer: A (Lecturers 3 – 4 and Chapter 2) 7. On the Statement of Cash Flows, which of the following is a financing activity and is a cash inflow? a. Pay employee salaries of $9,500 b. Pay cash dividends to shareholders of $1,200 c. Purchase machinery for production for $15,700 d. Sell shares of common stock for $20,000 e. Receive cash from customer to pay off account receivable of $3,000ACCTG 215 Fall 2013 4 Answer: D (Chapter 4) 8. On June 1, 2012, BumpIt Studios provided music recording services to Johnny and billed Johnny $5,000. BumpIt debited the total amount to Accounts Receivable. At the end of the month BumpIt received a payment of $2,500 from the customer. What is the journal entry BumpIt will record at the end of the month when the company receives the payment? a. Cash $5,000 Revenue $5,000 b. Accounts Receivable $5,000 Revenue $5,000 c. Cash $5,000 Accounts Receivable $5,000 d. Accounts Receivable $2,500 Unearned Revenue $2,500 e. Cash $2,500 Accounts Receivable $2,500 Answer: E (Lecture 4 and Chapter 3) 9. Which of the following is one of the five components of internal control provided by the Committee of Sponsoring Organizations (COSO)? a. Information and communication b. Organization c. Separation of duties d. Performance reviews e. Preparing financial statements Answer: A (Lecture 6 and Chapter 4) 10. Which of the following does not adjust a company’s cash balance when doing a bank reconciliation? a. NSF Check b. Note Received c. Service Fee d. Deposit’s Outstanding e. All of the above are adjustments that would be made to a company’s cash balance when doing a bank reconciliationACCTG 215 Fall 2013 5 Answer: D (Lecture 6 and Chapter 4) Numeric Questions (1 point each) Be sure to record your final answers in the spaces provided on the cover sheet. Use the following information for the next two questions. VeryNear is a new company that opened for business on January 1, 2012. On September 20, 2012 VeryNear paid out dividends of $700. At the end of the year on December 31, 2012 VeryNear reported Net Income of $3,000, and prepared the following trial balance (all of VeryNear’s accounts are shown) Accounts Debits Credits Common Stock $10,000 Accounts Payable $4,000