ACCT201 Exam II Spring 2012 Practice Questions

ACCT201 Exam II Spring 2012 – Practice Questions This is not an actual exam. The content and difficulty level of actual exam questions may differ from the content and difficulty level of practice questions.

KOÇ UNIVERSITY Faculty of Administrative Sciences and Economics

ACCT 201 Financial Reporting -- Spring 2012 -- Practice Questions

For all questions, mark your choice of answer on your scantron. Answers that are not marked on the scantron will NOT be accepted. For the numerical questions, provide your answers in the spaces provided on this exam. For the numerical questions, you must show all your supporting calculations/explanations to receive any credit. All supporting calculations and schedules must be legible, in good form and written in places indicated. Be neat with your answers.

You must honor KOÇ University’s standards regarding integrity, honesty, and cheating at all times; sharing of information during this exam in any form is strictly forbidden. Any breach of these standards will be dealt with in accordance with KOÇ University’s Code of Academic Integrity. Please note:

- Programmable calculators with text memory capability are not permitted. - You are not permitted to use a cell phone in any capacity during the exam. - You must return the entire exam book when you are complete. If you fail to return your exam when I announce that the exam is over, your exam grade will be zero. - You are not allowed to ask questions during the exam. If you feel that there is not enough information provided, make the appropriate assumptions regarding the problem and note these assumptions in the box below. Be sure to indicate question number.

HONOR CODE BY SIGNING YOUR NAME BELOW, YOU ARE ACKNOWLEDGING YOUR COMPLIANCE WITH THE KOÇ UNIVERSITY CODE OF ACADEMIC INTEGRITY AND ALL POLICIES RELATED TO IT AS DISCUSSED IN THE COURSE SYLLABUS.

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Grading Schedule -- For Instructor’s Use Only: Point structure Number Score Version … correct

Questions 1-32 3.125 points each

1 ACCT201 Exam II Spring 2012 – Practice Questions This is not an actual exam. The content and difficulty level of actual exam questions may differ from the content and difficulty level of practice questions.

1. Cobb Company's accounting records show the following at the year ending on December 31, 2012: Purchase Discounts $ 5,600 Freight - in 7,800 Purchases 201,000 Beginning Inventory 23,500 Ending Inventory 28,800 Purchase Returns 6,400 Using the periodic system, the cost of goods sold is a $196,800. . b $189,000. . c $202,100. . d $191,500. .

2. On October 4, 2012, JT Corporation had credit sales transactions of $3,200 from merchandise having cost $1,900. The entries to record the day's credit transactions include a a credit of $1,900 to Cost of Goods Sold. . b credit of $3,200 to Sales Revenue. . c debit of $3,200 to Inventory. . d debit of $1,900 to Inventory. .

2 ACCT201 Exam II Spring 2012 – Practice Questions This is not an actual exam. The content and difficulty level of actual exam questions may differ from the content and difficulty level of practice questions. 3. On July 9, Sheb Company sells goods on credit to Wooley Company for $3,000, terms 1/10, n/60. Sheb receives payment on July 18. The entry by Sheb on July 18 is: a Cash 2,970 . Sales Discounts 30 Accounts Receivable 3,000 b. Cash 3,000 Accounts Receivable 3,000 c Cash 3,000 . Sales Discounts 30 Accounts Receivable 2,970 d Cash 3,030 . Sales Discounts 30 Accounts Receivable 3,000

4. In a perpetual inventory system, which of the following would be debited when goods are purchased with the intent of being resold? a Purchases. . b Accounts Payable. . c Inventory. . d Cost of Goods Sold. .

5. If Sales Revenue is $400,000, Cost of Goods Sold is $310,000, and Operating expenses are $60,000, the Gross profit is a $400,000. . b $90,000. .

3 ACCT201 Exam II Spring 2012 – Practice Questions This is not an actual exam. The content and difficulty level of actual exam questions may differ from the content and difficulty level of practice questions. c $30,000. . d $340,000. .

6. As a result of a thorough physical inventory, Railway Company determined that it had inventory worth $180,000 at December 31. This count did not take into consideration the following facts: Rogers Consignment store currently has goods worth $35,000 on its sales floor that belong to Railway but are being sold on consignment by Rogers. The selling price of these goods is $50,000. Railway purchased $13,000 of goods that were shipped on December 27, FOB destination, that will be received by Railway on January 3. What is the correct amount of inventory that Railway should report? a. $228,000 b. $193,000 c. $215,000 d. $230,000

7. Penny Company made an inventory count on December 31, 2012. During the count, one of the clerks made the error of counting an inventory item twice. For the balance sheet at December 31, 2012, the effects of this error are

Assets Liabilities Owner’s Equity overstate a no effect overstated . d

4 ACCT201 Exam II Spring 2012 – Practice Questions This is not an actual exam. The content and difficulty level of actual exam questions may differ from the content and difficulty level of practice questions. overstate b overstated understated . d

overstate c understated overstated . d d. understated no effect understated

8. Partridge Bookstore had 500 units on hand at January 1, costing $18 each. Purchases and sales during the month of January were as follows: Date Purchases Sales Jan. 1 375 @ $28 4 17 250 @ $20 25 250 @ $22 29 260 @ $32

Partridge does not maintain perpetual inventory records. According to a physical count, 365 units were on hand at January 31. The cost of the inventory at January 31, under the FIFO method is: a. $7,800. b. $8,030. c. $6,570. d $7,300. .

5 ACCT201 Exam II Spring 2012 – Practice Questions This is not an actual exam. The content and difficulty level of actual exam questions may differ from the content and difficulty level of practice questions.

9. Partridge Bookstore had 500 units on hand at January 1, costing $18 each. Purchases and sales during the month of January were as follows: Date Purchases Sales Jan. 1 375 @ $28 4 17 250 @ $20 25 250 @ $22 29 260 @ $32

Partridge does not maintain perpetual inventory records. According to a physical count, 365 units were on hand at January 31. The cost of the inventory at January 31, under the LIFO method is: a. $8,030. b. $6,570. c. $7,300. d. $7,800.

10. Nick's Place recorded the following data: Units Unit On Date Received Sold Cost hand 1/1 Inventory 600 $2.00 1/8 Purchased 1,000 1,600 2.40 1/12 Sold 1,200 300

The weighted average unit cost of the inventory at January 31 is: a $2.25. . b $2.00. . c $2.40. . d $2.20. .

6 ACCT201 Exam II Spring 2012 – Practice Questions This is not an actual exam. The content and difficulty level of actual exam questions may differ from the content and difficulty level of practice questions. 11. Internal controls are not designed to safeguard assets from a. natural disasters. b. employee theft. c. robbery. d. unauthorized use.

12. Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them a. increases the potential for errors and fraud. b. decreases the potential for errors and fraud. c. is an example of good internal control. d. is a good example of safeguarding the company's assets.

13. Which one of the following items would not be considered cash? a. Coins b. Money orders c. Currency d. Postdated checks

14. A $100 petty cash fund has cash of $13 and receipts of $84. The journal entry to replenish the account would include a credit to a. Cash for $87. b. Petty Cash for $87. c. Cash Over and Short for $3. d. Cash for $84.

15. If the month-end bank statement shows a balance of $36,000, outstanding checks are $10,000, a deposit of $4,000 was in transit at month end, and a check for $600 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is a. $29,400. b. $30,000. c. $30,600. d. $41,400.

Answer Key

7 ACCT201 Exam II Spring 2012 – Practice Questions This is not an actual exam. The content and difficulty level of actual exam questions may differ from the content and difficulty level of practice questions. 1. D