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FIN621 VU Current Midterm Fall 2012 Paper 9 December 2012

Todays paper of FIN 621

22 MCQ’s  Mostly from past paper

3 Question 3 Marks each

2 Questions of 5 Marks each

MCQ’s are

Question No: 3    ( Marks: 1 )    – Please choose one

To determine the balance of a particular account, one should refer to which of the following?

 

 Ledger

 

► Source document

 

► Chart of accounts

 

► Journal

 

Question No: 4    ( Marks: 1 )    – Please choose one

A business has purchased a building on credit, how it would be recorded in the journal?

 

► Building – Credit; Accounts payable – Debit

 

 Building – Debit; Notes payable -Credit

 

► Building – Debit; Owner’s equity-  Credit

 

► Building – Debit; Accounts payable – Credit

 

Question No: 9    ( Marks: 1 )    – Please choose one

Which of the following accounts would NOT be included in a post-closing trial balance?

 

► Cash

 

► Accumulated depreciation

 

► Owner’s equity

 

► Fees earned

 

Question No: 10    ( Marks: 1 )    – Please choose one

 

After the closing entries are posted to the ledger, each expense account will have?

 

► A debit balance

 

► A negative balance

 

► A credit balance

 

► A zero balance

 

Question No: 12    ( Marks: 1 )    – Please choose one

Which of the following is NOT the most common example of cash equivalents?

► Savings deposits

► Certificates of Deposit (CDs)

 Stocks of other companies

► Money market mutual funds

 Question No: 15    ( Marks: 1 )    – Please choose one

Which of the following activities convert the income statement items from the accrual basis of accounting to cash?

► Operating activities

► Investing activities

► Financing activities

► Non cash activities

 Question No: 18    ( Marks: 1 )    – Please choose one

The cash flow from investing activities shows the cash effects of which of the following?

► Income statement items

► Long term assets items

► Long term liability & stockholder’s equity

► Long term liability and long term assets

Question No: 28    ( Marks: 1 )    – Please choose one

Which depreciation method allocates an equal portion of depreciation expense to each period of asset’s useful life?

 Straight-line method

► Double-declining balance method

► Sum-of-the-year digit method

► Accelerated depreciation method

Question No: 29    ( Marks: 1 )    – Please choose one

Which of the following is NOT an example of accelerated depreciation method?

 Straight-line method

► Sum-of-the-years digit method

► Double-declining balance method

► Modified Accelerated Cost Recovery System

 

Question No: 32    ( Marks: 1 )    – Please choose one

An adjusting entry would NOT be required for which of the following account?

 Salaries

► Past due expense

► Income tax expense

► Accounts receivable

Question No: 34    ( Marks: 1 )    – Please choose one

Accounting Cycle is a series of activities that begins with ___________ and ends with ___________.

► Closing of books, transactions

► Transaction, After closing Trial Balance

► Journal, ledger account

 Transactions, financial statements

 

Question No: 2    ( Marks: 1 )    – Please choose one

 After recording the transactions in journal, posting is made to which of the following?

► Trial Balance

► Financial Statements

       ► Ledger

► After-closing Trial Balance

 



Question No: 3    ( Marks: 1 )    – Please choose one

 Which one of the following is the second step in the accounting cycle?

       ► Recording entries in the journal

► Analyzing the business transaction

► Posting the entries to the ledger

► Making the adjusting entries

Question No: 4    ( Marks: 1 )    – Please choose one

 Which of the following is the basic function of the Trial Balance?

 

       ► To prove the equality of debits and credits

► To check the balance of all assets

►  To prepare the balance sheet

► To check the validity of accounts

Question No: 10    ( Marks: 1 )    – Please choose one

 Retained earnings change over time because of several factors. Which of the following factors would explain an INCREASE in retained earnings?

► Net Income

► Dividends payment

       ► Investment by the stockholders

► Net Loss

Question No: 26    ( Marks: 1 )    – Please choose one

 Office supplies are purchased on account. The company uses a perpetual inventory system. What is the correct journal entry for this purchase of office supplies?

► Debit – Purchases; Credit – Cash

► Debit – Merchandise Inventory; Credit – Cost of Goods Sold

       ► Debit – Office Supplies; Credit – Accounts Payable

 

► Debit – Merchandise Inventory; Credit – Accounts Payable

Question No: 28    ( Marks: 1 )    – Please choose one

 Equipment costing Rs. 3,000 with accumulated depreciation of Rs. 2,125 is exchanged for another asset with a fair value of Rs. 625. The exchange has commercial substance.  How much is the gain or loss on this transaction?

 

 

► A gain of Rs. 250 should be recognized

 

       ► A loss of Rs. 250 should be recognized

 

► A loss of Rs. 500 should be recognized

 

► No gain or loss should be recognized

 

 



Question No: 30    ( Marks: 1 )    – Please choose one

 Which of the following is NOT an example of accelerated depreciation method?

 

       ► Straight-line method

► Sum-of-the-years digit method

► Double-declining balance method

► Modified Accelerated Cost Recovery System

Question No: 32    ( Marks: 1 )    – Please choose one

Question No: 35    ( Marks: 1 )    – Please choose one

 Which of the following provides the basis for the trial balance?

 

► Income statement

 

► Statement of cash flow

 

► Ledger

 

► Adjusting entries

Question No: 41    ( Marks: 5 )

 On 15, 2001, ABC Company sold 1,000 printers to another company. Immediately prior to this sale, the perpetual inventory records of the company for the printers included the following cost layers.

 

Purchase date

Quantity

Unit Cost

Total Cost

Dec. 12, 2000

600

Rs. 9.25

Rs. 5,550

Jan. 9, 2001

900

Rs. 9.50

8,550

Total on hand

1,500

 

Rs. 14,100

Instructions:

Prepare a separate general entry to record the cost of printers, assuming that the company uses the following methods.

Q:  5 marks

Cash flow statement ka tha


Another Paper

1 Question: why there is need to adjust adusting entries in expense and revenue accounts give reasons?3 marks

2 Question: define accural accounting systems? 3 marks

3 Question: what is the effect of inventory error if not made correct? 3 marks

4 Question: .sales made _______ company 1000 printers on 31 july. prier it they purchase the following stocks
ist july 600 @ 9.25
20 july 900 @9.5

do journal entry if the company used….
1. FIFO
2. LIFO Marks 5

5 Question: Can a company get a positive cash flow from operating activities even if the company has net loss during the period? Explain with the help of example

OBJECTIVE WAS MOSTLY PREVIOUS PAPER OF 2011 AND 2012 including 23 MCQs

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