DeVry ACCT 550 Midterm Exam Latest

DeVry ACCT 550 Midterm Exam Latest

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DeVry ACCT 550 Midterm Exam Latest

 

Question 1.1. (TCO A) The Financial Accounting Standards Board employs a due process system, which (Points : 5)

has all CPAs in the United States vote on a new statement.

enables interested parties to express their views on issues under consideration.

identifies the accounting issues that are the most important.

requires that all accountants receive a copy of financial standards.

Question 2.2. (TCO A) The Conceptual Framework (Points : 5)

is the accounting standard formulated by IASB.

is the basis for setting accounting rules by FASB.

is used only by private companies.

is created by Congress for creating governmental standards for federal, state, and local units.

Question 3.3. (TCO A) Which of the following is an ingredient of relevance? (Points : 5)

Verifiability

Completeness

Neutrality

Predictive value

Question 4.4. (TCO A) Information is neutral if it (Points : 5)

provides benefits that are at least equal to the costs of its preparation.

can be compared with similar information about an enterprise at other points in time.

would have no impact on a decision maker.

is free from bias toward a predetermined result.

Question 5.5. (TCO A) The elements of financial statements include investments by owners. These are increases in an entity’s net assets resulting from owners’ (Points : 5)

transfers of assets to the entity.

rendering services to the entity.

satisfaction of the liabilities of the entity.

All of the above

Question 6.6. (TCO A) Which of the following is not a basic assumption underlying the financial accounting structure? (Points : 5)

Economic entity assumption

Going concern assumption

Historical cost assumption

Monetary unit assumption

Question 7.7. (TCO A) What is the quality of information that enables users to better forecast future operations? (Points : 5)

Reliability

Materiality

Comparability

Relevance

Question 8.8. (TCO D) Which of the following is a limitation of the balance sheet? (Points : 5)

Many items that are of financial value are omitted.

Judgments and estimates are used.

Current fair value is not reported.

All of the above

Question 9.9. (TCO D) One criticism not normally aimed at a balance sheet prepared using current accounting and reporting standards is (Points : 5)

failure to reflect current value information.

the extensive use of separate classifications.

an extensive use of estimates.

failure to include items of financial value that cannot be recorded objectively.

Question 10.10. (TCO A) The quality of information that gives assurance that is reasonably free of error and bias and is complete is (Points : 5)

relevance.

faithful representation.

verifiability.

neutrality.

Question 11.11. (TCO D) The correct order to present current assets is (Points : 5)

cash, accounts receivable, prepaid items, inventories.

cash, accounts receivable, inventories, prepaid items.

cash, inventories, accounts receivable, prepaid items.

cash, inventories, prepaid items, accounts receivable.

Question 12.12. (TCO D) Which of the following should be reported for capital stock? (Points : 5)

The shares authorized

The shares issued

The shares outstanding

All of the above

Question 13.13. (TCO D) Which of the following is not a long-term investment? (Points : 5)

Cash surrender value of insurance

Franchise

Land held for speculation

A sinking fund

Question 14.14. (TCO A) Which of the following is not a basic assumption underlying the financial accounting structure? (Points : 5)

Economic entity assumption

Going concern assumption

Periodicity assumption

Historical cost assumption

Question 15.15. (TCO D) The current assets section of the balance sheet should include (Points : 5)

machinery.

patents.

goodwill.

inventory.

Question 16.16. (TCO D) Hall Corp.’s trial balance reflected the following account balances at December 31, 201X.

Accounts receivable (net)

Accounts receivable (net)

$24,000

Trading securities

6,000

Accumulated depreciation on equipment and furniture

15,000

Cash

11,000

Inventory

30,000

Equipment

25,000

Patent

4,000

Prepaid expenses

2,000

Land held for future business site

18,000

In Hall’s December 31, 201x balance sheet, what is the current assets total? (Points : 5)

$90,000

$82,000

$77,000

$73,000

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Question 1.1. (TCO A) What are some of the major differences between iGAAP and U.S. GAAP? Explain in detail.(Points : 25)

Question 2.2. (TCO C) Blue Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative. The adjusted trial balance at December 31, 201X, included the following expense accounts.

Accounting and legal fees

$150,000

Advertising

$125,000

Freight-out

$65,000

Interest

$80,000

Loss on sale of long-term investments

$35,000

Officers’ salaries

$200,000

Rent for office space

$160,000

Sales salaries and commissions

$110,000

One half of the rented premises are occupied by the sales department.

How much of the expenses listed above should be included in Perry’s general and administrative expenses for 201X? (Points : 20)

Question 3.3. (TCO C) Ivy Co. had the following account balances.

Sales

$ 120,000

Cost of goods sold

70,000

Salary expense

15,000

Depreciation expense

20,000

Dividend revenue

5,000

Utilities expense

6,000

Rental revenue

30,000

Interest expense

10,000

Advertising expense

15,000

What would Ivy report as total expenses in a single-step income statement? (Points : 20)

Question 4.4. (TCO C) SolarPower Inc. had the following transactions during 2105.

Sales revenue

$30,000

Equipment rental revenue

840

Cost of sales

12,375

Selling and administrative expenses

6,540

Interest expense

1,120

Gain on sale of old machinery

420

Unrealized gain on available for sale securities

312

(A) Prepare a multi-step income statement of SolarPower Inc. assuming income tax rate applicable to Solar Power is 30%.

(B) Compute comprehensive income.

(Points : 35)

Question 5.5. (TCO B) Unearned rent at 1/1/1X was $6,000 and at 12/31/1X was $15,000. The records indicate cash receipts from rental sources during 201X amounted to $40,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. Please indicate debit (DR) or credit (CR) to the left of the account title and place a comma between the account title and the amount of the adjustment. (Points : 10)

Question 6.6. (TCO B) Retained earnings at 1/1/1X was $90,000 and at 12/31/1X it was $210,000. During 201X, cash dividends of $50,000 were paid and a stock dividend of $40,000 was issued. Both dividends were properly charged to retained earnings. You are to provide the missing closing entry. Please indicate debit (DR) or credit (CR) to the left of the account title and place a comma between the account title and the amount of the adjustment. (Points : 10)

 

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DeVry ACCT 550 Midterm Exam Latest

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