Mizzou ACCTCY 2037 - Accounting 2037 Blank Exam 2 Fall 2012 (7 pages)

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Accounting 2037 Blank Exam 2 Fall 2012



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Accounting 2037 Blank Exam 2 Fall 2012

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Pages:
7
School:
University of Missouri
Course:
Acctcy 2037 - Accounting II

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Accounting 2037 Exam 2 with answers Fall 2012 Completion 2 pts each Complete each sentence or statement with one of the phrases below Possible Answers Amortization Compound interest Double declining balance Goodwill Market rate Payback Specific ID method average rate of return conservatism FIFO lessee moving average periodic system sum of the years digits capital budgeting contract rate FOB destination lessor mutually exclusive perpetual system sunk costs capital lease depletion FOB shipping point leverage net present value physical underestimation capital rationing depreciation functional LIFO operating lease retail price yield 1 The is a method that may be used to estimate the amount of inventory held by a merchandising company 2 The period is the length of time required for a return of the initial investment 3 is the term similar to depreciation used for intangible assets 4 The is the market rate at which bonds are issued 5 Under the cost flow assumption the company includes the latest costs in the cost of goods sold as it sells the products leaving the earliest costs in ending inventory True False 2 pts each 6 Straight line double declining balance and sum of the years digits are all examples of accelerated depreciation methods 7 A large company can usually issue bonds at the risk free rate of interest whereas a smaller company will have to include a risk premium 8 In a period of rising prices cost of goods sold is lower under LIFO than FIFO resulting in higher net income 9 Sunk costs are costs incurred prior to the capital expenditure proposal under consideration and as such are relevant to the capital expenditure proposal 10 Compound interest is interest that accrues on both the principal and earned interest Multiple choice 2 pts each Identify the letter of the choice that best completes the statement or answers the question 11 The book value of an asset is its a Cost depreciation expense b Fair market value cost c Cost accumulated depreciation d Fair market



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