STUDY TIPS IN ACCOUNTING_Review Exam 2 ACCT351 Winter 2024
1. Multiple Choice Questions: 1. How do the objectives differ for forensic accountants (fas) and..
Multiple Choice Questions: 1. How do the objectives differ for forensic accountants (fas) and external financial auditors (efes)? a. Fas are more thorough. b. Efas audit a broader range of transactions. c. Efas tend to concentrate their work more. d. Fas tend to concentrate their work more. 2. How many categories does the American Institute of Certified Accountants use to classify forensic accounting? a. 1. b. 2. c. 3. d. 4. 3. A forensic accountant who determines the amount of lost profits due to business interruption would be working in which of the following areas? a. Valuation. b. Estimation. c. Financial determination. d. Auditing. 4. Corporate scandals prompted companies to begin using which of the following? a. Forensic audits. b. Fraud-intensive audits. c. Proactive fraud checkups. d. Internal control systems. 5. Which of the following is the most recognized fraud credential? a. CPA. b. CMA. c. CFE. d. None of the above
2. Which of the following is NOT a principle of lean manufacturing?
1. Which of the following is NOT a principle of lean manufacturing?
a. Products are pushed from the production end to the customer.
b. All activities that do not add value and maximize the use of scarce resources must be eliminated.
c. Achieve high inventory turnover rate.
d. A lean manufacturing firm must have established and cooperative relationships with vendors.
e. All of the above are lean manufacturing principles.
2. All of the following are problems with traditional accounting information EXCEPT:
a. Managers in a JIT setting require immediate information.
b. The measurement principle tends to ignore standards other than money.
c. Variance analysis may yield insignificant values.
d. The overhead component in a manufacturing company is usually very large.
e. All of these are problems associated with traditional accounting information.
3. Which of the following is NOT a problem associated with standard cost accounting?
a. Standard costing motivates management to produce large batches of products and build inventory.
b. Applying standard costing leads to product cost distortions in a lean environment.
c. Standard costing data are associated with excessive time lags that reduce its usefulness.
d. The financial orientation of standard costing may promote bad decisions.
e. All of the above are problems with standard costing.
4. Which one of the following statements is true? a. ERP evolved directly from MRP.
b. ERP evolved into MRP and MRP evolved into MRP II.
c. MRP II evolved from MRP and MRP II evolved into ERP.
d. None of the above is true.
3. Roth Contractors Corporation was incorporated on December 1, 2019 and had the following...
Roth Contractors Corporation was incorporated on December 1, 2019 and had the following transactions during December:
Part A a. Issued common stock for $5,000 cash
b. Paid $1,200 cash for three months’ rent: December 2019; January and February 2020
c. Purchased a used truck for $10,000 on credit (recorded as an account payable)
d. Purchased $1,000 of supplies on credit. These are expected to be used during the month (recorded as expense)
e. Paid $1,800 for a one-year truck insurance policy, effective December 1
f. Billed a customer $4,500 for work completed to date
g. Collected $800 for work completed to date
h. Paid the following expenses in cash: advertising, $350; interest, $100; telephone, $75; truck operating, $425; wages, $2,500
i. Collected $2,000 of the amount billed in f above
j. Billed customers $6,500 for work completed to date
k. Signed a $9,000 contract for work to be performed in January 2020
l. Paid the following expenses in cash: advertising, $200; interest, $150; truck operating, $375; wages, $2,500
m. Collected a $2,000 advance on work to be done in January (the policy of the corporation is to record such advances as revenue at the time they are received)
n. Received a bill for $100 for electricity used during the month (recorded as utilities expense).
Part B The following information relates to December 31, 2019:
o. One month of the prepaid insurance has expired.
p. The December portion of the rent paid on December 1 has expired.
q. A physical count indicates that $350 of supplies is still on hand.
r. The amount collected in transaction m is unearned at December 31.
s. Three days of wages for December 29, 30, and 31 are unpaid, amounting to $1,500. These will be paid in January.
t. The truck has an estimated useful life of 4 years.
u. Income taxes expense is $500. This amount will be paid in the next fiscal year.
Required:
5. Prepare all necessary adjusting entries. General ledger account numbers and descriptions are not necessary.
7. Prepare an adjusted trial balance at December 31.
8. Assume the fiscal year-end is December 31, 2019. Prepare an income statement, statement of changes in equity, and balance sheet.
9. Prepare closing entries and a post-closing trial balance at December 31, 2019
4. Interviewing all members of a given population is called: a) a sample. b) a Gallup poll. c) a...
Interviewing all members of a given population is called:
a)a sample.b)a Gallup poll.c)a census.d)a Nielsen audit.
5. Hickory Company manufactures two products - 14,000 units of Product Y and 6,000 units of Product...
Hickory Company manufactures two products - 14,000 units of Product Y and 6,000 units of Product Z.The company uses a plantwide overhead rate based on direct labor-hours.It is a considering implementing an activity-based costing (ABC) costing to allocate all of its manufacturing overhead to their products using four cost pools.The following additional information is available for the company as a whole and for Products Y and Z.
6. Action Quest Games Inc. adjusts its accounts annually. The following information is available for...
Action Quest Games Inc. adjusts its accounts annually. The following information is available for the year ended December 31, 2017.
Part B Debit/Credit
Action Quest Games Inc. adjusts its accounts annually. The following information is available for the year ended December 31, 2017 1. Purchased a 1-year insurance policy on June 1 for $1,920 cash. 2. Paid $5,600 on August 31 for 5 months rent in advance 3. On September 4, received $3,960 cash in advance from a corporation to sponsor a game each month for a total of 9 months for the most improved students at a local school. 4. Signed a contract for cleaning services starting December 1 for $800 per month. Paid for the first 2 months on November 30. (Hint: Use the account Prepaid Cleaning to record prepayments.) 5. On December 5, received $1,400 in advance from a gaming club. Determined that on December 31, $450 of these games had not yet been played. ? (a) Your answer is correct For each of the above transactions, prepare the journal entry to record the initial transaction. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit une 1, 2017Prepaid Insurance 1920 Cash 1920 2. Aug. 31, 2017 Prepaid Rent 5600 Cash 5600 TSept. 4, 2017 [cash 3960 Unearned Service Rever 3960 Nov. 30, 2017 Prepaid Cleaning 1600 Cash 1600 Dec. 5, 2017 Cash ? 1400 Uneamed Service Rever 1400
7. Beyers Corporation provides security services. Selected transactions for Beyers are presented...
Beyers Corporation provides security services. Selected transactions for Beyers are presented below.
Oct. 1
Issued common stock in exchange for $66,000 cash from investors.
2
Hired part-time security consultant. Salary will be $2,000 per month. First day of work will be October 15.
4
Paid one month of rent for building for $2,000.
7
Purchased equipment for $18,000, paying $4,000 cash and the balance on account.
8
Paid $500 for advertising.
10
Received bill for equipment repair cost of $390.
12
Provided security services for event for $3,200 on account.
16
Purchased supplies for $410 on account.
21
Paid balance due from October 7 purchase of equipment.
24
Received and paid utility bill for $148.
27
Received payment from customer for October 12 services performed.
31
Paid employee salaries and wages of $5,100.
Journalize the transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
8. Nancy Tercek started a delivery service, Tercek Deliveries, on June 1, 2015. The following transa...
9. The equity sections From Atticus Group's 2015 and 2016 year-end balance sheets follow
the equity sections From Atticus Group's 2015 and 2016 year-end balance sheets follow
Stockholders' Equity (December 31, 2015 Common stock-$4 par value, 100,000 shares $160,000 authorized, shares issued and outstanding Paid-in capital in excess of par value, common stock 120,000 320,000 tained earnings $600,000 Total stockholders' equity
10. PR 3-5A Adjusting entries and adjusted trial balances ObJ. 2, 3, 4 Rowland Company is a small...
PR 3-5A Adjusting entries and adjusted trial balances ObJ. 2, 3, 4 Rowland Company is a small editorial services company owned and operated by Marlene Rowland. On August 31, 2016, the end of the current year, Rowland Company’s accounting clerk prepared the following unadjusted trial balance: Rowland Company Unadjusted Trial Balance August 31, 2016 Debit Balances Credit Balances Cash ............................................................ 7,500 Accounts Receivable.............................................. 38,400 Prepaid Insurance ................................................ 7,200 Supplies......................................................... 1,980 Land ............................................................ 112,500 Building ......................................................... 150,250 Accumulated Depreciation—Building.............................. 87,550 Equipment....................................................... 135,300 Accumulated Depreciation—Equipment ........................... 97,950 Accounts Payable ................................................ 12,150 Unearned Rent................................................... 6,750 Common Stock .................................................. 75,000 Retained Earnings ............................................... 146,000 Dividends ....................................................... 15,000 Fees Earned...................................................... 324,600 Salaries and Wages Expense....................................... 193,370 Utilities Expense ................................................. 42,375 Advertising Expense.............................................. 22,800 Repairs Expense.................................................. 17,250 Miscellaneous Expense ........................................... 6,075 750,000 750,000 The data needed to determine year-end adjustments are as follows: a. Unexpired insurance at August 31, $6,000. b. Supplies on hand at August 31, $480. c. Depreciation of building for the year, $7,500. d. Depreciation of equipment for the year, $4,150. e. Rent unearned at August 31, $1,550. f. Accrued salaries and wages at August 31, $3,200. g. Fees earned but unbilled on August 31, $11,330. Instructions 1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense. 2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.
11. Which of the following statements are true about E-R diagrams? I. Entities and relationships are...
Which of the following statements are true about E-R diagrams?
I. Entities and relationships are mapped to tables in the database.
II. E-R diagrams are useful for creating the initial set of normalized tables in the database.
III. An entity describes the association between two real-world objects.
IV. An E-R diagram is also known as the entity-relationship diagram.
I, II, III
I, II, IV
I, III, IV
II, III, IV
12. Expenses are costs incurred by an organization in the process of earning revenue during a given...
Expenses are costs incurred by an organization in the process of earning revenue during a given time period. Expense accounts have a direct impact on the profitability of an organization. List three expense accounts related to payroll. Describe when you would expect the account to be cleared to zero. Explain the methods you could use to reconcile these accounts.
13. IFRS QUESTIONS 1.Which of the following statements is true regarding debits and credits? a.On the...
IFRS QUESTIONS
1.Which of the following statements is true regarding debits and credits?
a.On the income statement, debits are used to increase account balances, whereas on the statement of financial position, credits are used to increase account balances.
b.The basic equation on the statement of financial position is Assets + Liabilities = Equity.
c.The rules for debit and credit and the normal of balance of Share Capital – Ordinary are the same as for liabilities.
d.On the income statement, revenues are increased by debit whereas on the statement of financial position retained is increased by a credit.
2.Which of the following accounts is reported in the Equity section of the statement of financial position?
a.Dividends.
b.Share capital – ordinary.
c.Revenues.
d.All of the choices are reported in the Equity section of the statement of financial position
3.Revenues are
a.Impacted by debits and credits in the same way that expenses are impacted by debits and credits.
b.A subdivision of equity, providing information about why equity is increased.
c.Reported on the statement of financial position as a current item.
d.All of the choices are correct regarding revenues.
4.Basic steps in the recording process include all of the following except
a.Transfer the journal information to the appropriate account in the statement of financial position.
b.Analyze each transaction for its effect on the accounts.
c.Enter the transaction information in a journal.
d.All of the choices are correct regarding the basic steps in the recording process.
5.Which of the following statements is true regarding simple and compound entries?
a.Simple entries can be prepared by anyone whereas compound entries need to be prepared by a skilled accountant.
b.Simple entries are recorded on the income statement whereas compound entries are recorded on the statement of financial position.
c.Simple entries involve one account, whereas compound entries involved 2 or more accounts.
d.An example of a compound entry would be the purchase of a machine for $400 cash and a $2,000 note payable.
6.Compound entries
a.Would include an entry to record the purchase of a computer for cash.
b.Require at least one debit and one credit entry.
c.Require that all credits be listed before the debits for entries affecting the statement of financial position.
d.Should be broken into their component parts and recorded as simple entries.
7.The entire group of accounts maintained by a company is the
a.Journal.
b.Statement of financial position.
c.Ledger.
d.T-account.
8.Accounts maintained within the ledger that appear on the statement of financial position include all of the following except
a.Salaries expense.
b.Interest payable.
c.Supplies.
d.Share capital – ordinary.
9.The chart of accounts
a.Lists the accounts and account numbers that identify their location in the ledger.
b.Uses a numbering system that identifies the accounts and usually starts with the income statement accounts followed by the statement of financial position accounts.
c.Is usually limited to approximately twenty to thirty accounts for most large companies.
d.All of the choices are true regarding the chart of accounts.
10.Posting
a.Accumulates the effects of ledger entries and transfers them to the general journal.
b.Is done only for income statement activity; activity related to the statement of financial position does not require posting.
c.Is done at least once per year.
d.Is done by posting all the debits and credits of one entry before moving on to the next entry.
11.The trial balance
a.Is a listing of all the accounts and their balances in the order the accounts appear on the statement of financial position.
b.Has as its primary purpose to prove (check) that all journal entries were made for the period.
c.Can be used to uncover errors in journalizing and posting.
d.Is used to prepare the statement of financial position while the general ledger is used to prepare the income statement.
12.Numerous errors may exist even though the trial balance columns agree. Which of the following is not one of these types of errors?
a.A transaction is not journalized.
b.Transposition error related to the statement of financial position.
c.A journal entry is posted twice.
d.A journal entry to purchase $100 worth of equipment is posted as a $1,000 purchase.
13.Which of the following statements is false concerning use of currency signs?
a.Currency signs do not appear in journals or ledgers.
b.Currency signs are generally only shown for the first item in a column and for the column total.
c.Currency signs are not typically used in the trial balance.
d.All of the choices are correct regarding currency signs.
14.Which of the following statements is true regarding the recording process?
a.Because IFRS (International Financial Reporting Standards) rely more on fair value and less on historical cost than U.S. GAAP, the double-entry accounting system is not widely used by companies who use IFRS.
b.Both IFRS (International Financial Reporting Standards) and U.S. GAAP use the same general rules of debits and credits and the steps in the recording process.
c.A trial balance using IFRS (International Financial Reporting Standards) is organized by first showing the accounts from the statement of financial position followed by accounts from the income statement; a tribal balance using U.S. GAPP is organized using the opposite order.
d.All of the choices are correct regarding the recording process.
15.Under U.S. GAPP
a.Currency signs are generally used in the journal, ledger, trial balance, and financial statements.
b.Share Capital – Ordinary is referred to as Retained Earnings.
c.The statement of financial position is often called the statement of changes in financial position.
d.The rules of debits and credits, and the steps in the recording process are the same as under IFRS (International Financial Reporting Standards).
14. For the past several years, Emily Page has operated a part-time consulting business from her...
For the past several years, Emily Page has operated a part-time consulting business
from her home. As of June 1, 2010, Emily decided to move to rented quarters and to
operate the business, which was to be known as Bottom Line Consulting, on a full-time
basis. Bottom Line Consulting entered into the following transactions during June:
June 1. The following assets were received from Emily Page: cash, $20,000; accounts
receivable, $4,500; supplies, $2,000; and office equipment, $11,500. There were
no liabilities received.
1. Paid three months rent on a lease rental contract, $6,000.
2. Paid the premiums on property and casualty insurance policies, $2,400.
4. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $2,700.
5. Purchased additional office equipment on account from Office Depot Co.,$3,500.
6. Received cash from clients on account, $3,000.
10. Paid cash for a newspaper advertisement, $200.
12. Paid Office Depot Co. for part of the debt incurred on June 5, $750.
June 12. Recorded services provided on account for the period June 1 12, $5,100.
14. Paid part-time receptionist for two weeks salary, $1,100.
17. Recorded cash from cash clients for fees earned during the period June 1 16, $6,500.
18. Paid cash for supplies, $750.
20. Recorded services provided on account for the period June 1320, $3,100.
24. Recorded cash from cash clients for fees earned for the period June 17 24, $5,150.
26. Received cash from clients on account, $6,900.
27. Paid part-time receptionist for two weeks salary, $1,100.
29. Paid telephone bill for June, $150.
30. Paid electricity bill for June, $400.
30. Recorded cash from cash clients for fees earned for the period June 25 30, $2,500.
30. Recorded services provided on account for the remainder of June, $1,000.
30. Emily withdrew $5,000 for personal use.
Instructions
1. Journalize each transaction in a two-column journal, referring to the following chart
of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.)
11 Cash 31 Emily Page, Capital
12 Accounts Receivable 32 Emily Page, Drawing
14 Supplies 41 Fees Earned
15 Prepaid Rent 51 Salary Expense
16 Prepaid Insurance 52 Rent Expense
18 Office Equipment 53 Supplies Expense
19 Accumulated Depreciation 54 Depreciation Expense
21 Accounts Payable 55 Insurance Expense
22 Salaries Payable 59 Miscellaneous Expense
23 Unearned Fees
2. Post the journal to a ledger of four-column accounts.
15. 101.Which of the following is not a benefit of activity-based costing? a.More accurate product...
101.Which of the following is not a benefit of activity-based costing?
a.More accurate product costing
b.Enhanced control over overhead costs
c.Better management decisions
d.Less costly to use
102.Each of the following is a limitation of activity-based costing except that
a.it can be expensive to use.
b.it is more complex than traditional costing.
c.more cost pools are used.
d.some arbitrary allocations continue.
103.The presence of any of the following factors would suggest a switch to ABC except when
a.product lines differ greatly in volume.
b.overhead costs constitute a minor portion of total costs.
c.the manufacturing process has changed significantly.
d.production managers are ignoring data provided by the existing system.
104.Which of the following is a limitation of activity-based costing?
a.More cost pools
b.Less control over overhead costs
c.ABC can be expensive to use
d.Poorer management decisions
105.Which of the following is true about activity-based costing?
a.Less cost pools
b.Same base as traditional costing
c.More costly to use
d.Eliminates arbitrary allocations
106.Each of the following is a limitation of activity-based costing except that
a.it can be expensive to use.
b.it decreases control over overhead costs
c.it is complex and can be difficult to understand
d.some arbitrary allocations continue.
107.The presence of any of the following factors would suggest a switch to ABC except when
a.product lines differ greatly in volume.
b.overhead costs constitute a major portion of total costs.
c.the manufacturing process has changed significantly.
d.production managers are using data provided by the existing system
108.Activity-based costing uses
a.one plantwide pool and a single cost driver.
b.departmental pools and a single cost driver.
c.numerous cost pools and numerous cost drivers.
d.one plantwide pool and numerous cost drivers
109.Which of the following statements is false?
a.ABC can weaken control over overhead costs.
b.Under ABC, companies can trace many overhead costs directly to activities.
c.ABC allows some indirect costs to be identified as direct costs.
d.managers become more aware of their responsibility to control the activities that generate costs.
110.Which of the following is a value-added activity?
a.Inventory storage
b.Machining
c.Building maintenance
d.Bookkeeping
16. Multiple Choice Questions 1) A computer ________ is a collection of computers that communicate with.
Multiple Choice Questions
1) A computer ________ is a collection of computers that communicate with one another over transmission lines or wirelessly.
A) database
B) application
C) network
D) server
2) Which of the following is the distinguishing feature of a LAN as compared to a WAN?
A) single location
B) number of users
C) bandwidth
D) hardware requirements
3) Computers that reside in different geographic locations are connected using a(n) ________.
A) WAN
B) LAN
C) URL
D) IP address
4) A private internet that is used exclusively within an organization is called a(n) ________.
A) Ethernet
B) intranet
C) cloud
D) server
5) A ________ is a set of rules that programs on two communicating devices follow.
A) codec
B) URL
C) packet
D) protocol
6) To enable the seamless flow of data across the networks that comprise an internet, an elaborate scheme called a ________ is used.
A) layered protocol
B) virtual private network
C) three-tier system
D) remote access system
7) A ________ is a special-purpose computer that receives and transmits wired traffic on the LAN.
A) codec
B) modem
C) switch
D) port
8) Which of the following is the device that connects a computer's or printer's circuitry to network wires?
A) port
B) switch
C) router
D) NIC
9) Most LAN connections are made using ________.
A) Sc/TP cable
B) UTP cable
C) STP cable
D) F/TP cable
10) For a printer or laptop to connect to a wireless LAN, it must have a ________.
A) hyperlink
B) UTP cable
C) WNIC
D) DSL
17. 11-M.2 Mastery Problem (Review of Chapters 9. 10. and 11). Journalizing and posungan Journals and...
11-M.2 Mastery Problem (Review of Chapters 9. 10. and 11). Journalizing and posungan Journals and selected accounts payable, accounts receivable, and general ledger accounts for inn Solutions are given in the Working Papers.
18. Amount due to “untraceable shareholders” may be
? Amount due to “untraceable shareholders” may be
transferred to P&L A/c
kept as general reserve
transferred to CRR
shown as “Current Liabilities” in the balance sheet
19. Is a football jersey number a quantitative or a categorical variable? Support your answer with a...
Is a football jersey number a quantitative or a categorical variable? Support your answer with a detailed explanation
20. Mr Robert commenced business on 1st January, 2011 with a capital of $100,000 in cash. On the same...
Q: Mr Robert commenced business on 1st January, 2011 with a capital of $100,000 in cash. On the same date he opened the bank account in ADCB and deposited $20,000. During the month of January 2011 the following transactions took place: Jan 1 Bought goods for cash 70,000 2 Sold goods to Steve Co. (Credit) 38,000 15 Sold goods for cash 9,000 21 Steve Co. paid by cheque 35,000 22 Stationery bill paid by cheque 2,000 22 Telephone bill by cash 500 31 Paid rent by cash 2,000 31 Paid salaries by cash 3,000 Withdrew cash personal use 5,000 Required: Make journal entries for the transactions.