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Final

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Department
Administrative Studies
Course
ADMS 2500
Professor
All Professors
Semester
Fall

Description
Topic A Question - Gral Answer Questions Case Answer 1 B 31 C 2 A 32 B 3 A & C 33 C 4 A 34 D 5 A 35 B 6 B 36 D* 7 A 37 C 8 D 38 B* 9 B 39 B 10 A 40 C* 11 D 41 D 12 B 42 B* 13 B 43 B* (or D) 14 A 44 B* (or d) 15 C 45 D 16 D 46 B 17 B 47 C 18 A 48 A 19 C 49 B 20 B 50 D 21 A 22 B 23 C * Some problems are 24 C expected with these 25 C answers. 26 A 27 D 28 D 29 C 30 A 6 Questions – Mid term 1 (Lab 2 question 1) Courtland Corp. had the following transactions in April: a. Sold instruments to customers for $6,000; received $1,200 in cash and the rest on account. b. Determined that the cost of the instruments sold was $4,200. c. Purchased $3,000 of new instruments inventory; paid $1,200 in cash and the rest on account. d. Paid $300 in wages for the month. e. Received a $300 bill for utilities that will be paid in May. f. Received $2,000 from customers as deposits on orders of new instruments to be sold to customers in May. You may complete the following statements to help you answer the questions: Cash Basis Income Statement Accrual Basis Income Statement Revenues Revenues Cash Sales Sales to customers Customer Deposits Expenses Expenses Cost of sales Inventory Purchases Wages expense Wages Paid Utilities expense Utilities Expense Net Income Net Income Cash Basis Income Statement: Accrual Basis Income Statement: The cash sales should be $1,200 The sales to customers should be $6,000, The customer deposits should be $2,000 The cost of sales should be $4,200 The inventory purchases should be $1,200 The wages expense should be $300 The wages paid should be $300, The utilities expense should be $300 The utilities expense should be &0 The net income should be $1,200 The net income should be $1,700 Cash Basis Income Statement Accrual Basis Income Statement Revenues Revenues Cash Sales 1,200 Sales to customers 6,000 Customer Deposits 2,000 Expenses Expenses Cost of sales 4,200 Inventory Purchases 1,200 Wages expense 300 Wages Paid 300 Utilities expense 300 Utilities Expense 0 Net Income 1,200 Net Income 1,700 1) The cash sales should be: A. $6,000 B. $1,200 C. $2,000 D. $3,200 Correct answer B $1,200 2) The inventory purchases should be: A. $1,200 B. $3,000 C. $4,200 D. Not enough data to answer Correct answer A $1,200 3) The utilities expense paid should be: A. $0 B. $150 C. $300 D. Not enough data to answer Correct answers A $0 or C $300 4) The sales to customers should be: A. $6,000 B. $1,200 C. $2,000 D. $3,200 Correct answer A $6,000 5) The net income reported in the accrual basis income statement should be: A. $1,200 B. $1,400 C. $1,700 D. $2,000 Correct answer A $1,200 6) Will the cash basis net income always be greater than the accrual basis net income? A. Yes only if using Canadian GAAP B. No regardless of standards used, Canadian GAAP or IFRS C. Yes only if using IFRS D. Not enough data to answer Correct answer B: cash basis net income can be greater or smaller than the accrual basis net income, it all depends on the transactions of the period. 2 Questions – Mid term 1 (Lab 4 question 2) 7) Choose the term that best matches the following description: At year-end, wages payable of $3,600 had not been recorded or paid. A. Accrued Expense B. Accrued Revenue C. Deferred Expense D. Deferred Revenue The correct answer is A: Accrued Expense 8) Choose the term that best matches the following description: At year-end, service revenue of $2,000 was collected in cash but was not yet earned. A. Accrued Expense B. Accrued Revenue C. Deferred Expense D. Deferred Revenue The correct answer is D: Deferred Revenue 2 Questions – Mid term 1 (DVD Questions: 8, 11, 16, 17, 1 and 3) 9) You are interviewing for the position of Manager of Accounting for a medium- sized import/export business. The owner of the business explains that the present Manager of Accounting’s salary is not fixed but instead is based on the business’s profits. The owner explains this practice is consistent with the way the managers of all departments in the business are paid. You observe that continuing such an arrangement is likely to A. align managers’ interests with the owner’s and ensure the most accurate financial reporting B. increase the risk of reported earnings not presenting fairly the results of operations C. violate matching D. be illegal The correct answer is B 10) Choosing to combine the cost of paper clips with other office products in a single account for financial reporting purposes is an example of A. Materiality B. compliance with regulatory requirements C. Convenience D. Consistency The correct answer is A 3 Questions – Mid term 2 (Lyryx lab 5 Question 1) The following transactions were selected from among those completed by The Grayson Group in 2011: April 3: Sold 37 Stereos to Jack for $3,000; terms 3/10, n/30. April 6: Jack paid in full the amount due for the purchase on April 3. April 13: Sold two Matresses to George, who charged the $500 sales amount on her credit card. The credit card company charges The Grayson Group a 2% credit card fee. April 17: Sold 10 Desks to Susan for $2,000; terms 2/10, n/30. May 12: Susan returned 5 of the items purchased on April 17; the item was defective, and credit was given to the customer. May 15: Susan paid the account balance in full. Assume that sales discounts and credit card fees (discounts) are treated as contra revenues; compute the following values to achieve the net sales for the two months ended May 31: Sales Revenue Less: Sales returns and allowances Sales discount Credit card fees (discounts) Net sales Solution: Sales Revenue 5,500 Less: Sales returns and allowances (1,000) Sales discount ( 90) Credit card discounts ( 10) Net sales 4,400 11) The sales revenue amount should be: A. $500 B. $2,000 C. $3,000 D. $5,500 The correct answer is D: $5,500 12) The sales discounts amount should be: A. $40 B. $90 C. $130 D. Cannot be calculated with the data provided The correct answer is B: $90 13) The credit card discounts amount should be: A. $0 B. $10 C. $20 D. Cannot be calculated with the data provided The correct answer is B: $10 3 Questions – Mid term 2 (Lyryx lab 5 Question 6) 14) Choose the term that best matches the following description: The expense associated with estimated uncollectable accounts receivable. A. Bad debt Expense B. Allowance Method C. Percentage of Credit Sales Method D. Sales Returns and Allowances Correct answer A: Bad Debt Expense 15) Choose the term that best matches the following description: Bases bad debt expense on the historical perspective of credit sales that result in bad debts A. Bad debt Expense B. Allowance Method C. Percentage of Credit Sales Method D. Sales Returns and Allowances The correct answer is C: 'Percentage of Credit Sales Method' 16) Choose the term that best matches the following description: A cash discount offered to encourage prompt payment of an account receivable A. Installment Method B. Percentage of Completion Method C. Completed Contract Method D. Sales (or Cash) Discount The correct answer is D: 'Sales (or Cash) Discount' 2 Questions – Mid term 2 (Lyryx lab 8 Question 6) 17) If the contract rate on the bond is 7% and the market interest rate at the time of sale is 6%, then the bond will sell at: A. Par B. Premium C. Discount D. Unable to answer with the data provided The correct answer is B: Premium 18) If the contract rate on the bond is 7% and the market interest rate at the time of sale is 7%, then the bond will sell at: A. Par B. Premium C. Discount D. Unable to answer with the data provided The correct answer is A: par 2 Questions – Mid term 2 (Lyryx lab 9 Question 2) Bentley Inc. showed the following shareholders' equity as at December 31, 2011. In addition, the following information was known: a. The preferred shares had sold for an average price of $15. b. The common shares had sold for an average price of $6. c. Retained earnings at December 31, 2010, was $460,000. During 2011, net income earned was $700,000. The board of directors declared a total cash dividend of $335,000. Use this information to complete the shareholders' equity below. Bentley Inc. Shareholders’ Equity December 31, 2011 Contributed Capital: Common shares; unlimited shares authorized; _______ shares issued and outstanding…….. Preferred shares, $1.50 non-cumulative; 250,000 shares authorized; 190,000 shares issues and outstanding ……………………………………… Total contributed Capital…………………………… Retained Earnings……………………………………….. Total Shareholders’ equity………………………………. $5,625,000 19) The number of common shares issued should be: A. less than 250,000 B. between 250,000 and 300,000 C. more than 300,000 D. There is not enough data to answer The correct answer is C: 325,000 shares 20) The contributed capital from preferred shares should be: A. less than $2,000,000 B. between $2,000,000 and $3,500,000 C. more than $3,500,000 D. There is not enough data to answer The correct answer is B: $2,850,000 3 Questions - after Mid term 2 (Lyryx lab 11 Question 7) The records at the end of May 2011 for JenCo showed the following for a particular kind of merchandise: Inventory, April 30, 2011, at FIFO: 20 units @ $12 = $240 Inventory, April 30, 2011, at Weighted-Average: 20 units @ $8 = $160 Transactions Units Unit Cost Total Cost Purchase, May 9, 2011 50 $15 $750 Purchase, May 20, 2011 42 $17 $714 Sale, May 21, 2011 90 Sale, May 27, 2011 7 21) Compute the inventory turnover ratio under the FIFO costing method and a periodic inventory system (round to two decimal places). A. 5.85 times B. 7.45 times C. 5.85 days D. 7.45 days The correct answer is A: 5.85 times per year Inventory TurnoverCost of Goods Sold* $1,704 - $255 Ratio = = $1,449 Average Inventory = = 5.85 ($240 + $255) / 2 $247.5 Cost of Goods Sold* = = ( Beginning Inventory + (Purchases during the period) ) - Ending Inventory = ( $240 + ($750 + $714) ) - (15 units × $17) = $1,704 - $255 = $1,449 22) Compute the inventory turnover ratio under the Weighted-Average costing method and a periodic inventory
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