ACCT201 Final Exam 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.
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in good form and written in places indicated. Be neat with your answers.
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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.
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Grading Schedule -- For Instructor’s Use Only:
Point structure
Version …
Questions 1-32
Number
correct
3.125 points each
1
Score
ACCT201 Final Exam 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. The cost of a purchased building includes all of the following except
a.
b.
c.
d.
closing costs.
real estate broker's commission.
remodeling costs.
All of these are included.
2. Equipment was purchased for $150,000. Freight charges amounted to $7,000 and
there was a cost of $20,000 for building a foundation and installing the equipment. It
is estimated that the equipment will have a $30,000 salvage value at the end of its
5-year useful life. Depreciation expense each year using the straight-line method will
be
a.
b.
c.
d.
$35,400.
$29,400.
$24,600.
$24,000.
3. A company purchased factory equipment for $350,000. It is estimated that the
equipment will have a $35,000 salvage value at the end of its estimated 5-year
useful life. If the company uses the double-declining-balance method of depreciation,
the amount of annual depreciation recorded for the second year after purchase
would be
a.
b.
c.
d.
$140,000.
$84,000.
$126,000.
$60,480.
4. A company sells a plant asset which originally cost $240,000 for $80,000 on
December 31, 2012. The Accumulated Depreciation account had a balance of
$96,000 after the current year's depreciation of $24,000 had been recorded. The
company should recognize a
a.
b.
c.
d.
$160,000 loss on disposal.
$64,000 gain on disposal.
$64,000 loss on disposal.
$40,000 loss on disposal.
5. On October 1, 2012, Pennington Company issued an $80,000, 10%, nine-month
interest-bearing note. If the Pennington Company is preparing financial statements
at December 31, 2012, the adjusting entry for accrued interest will include a:
a.
b.
c.
d.
credit to Notes Payable of $2,000.
debit to Interest Expense of $2,000
credit to Interest Payable of $4,000.
debit to Interest Expense of $3,000.
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ACCT201 Final Exam 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.
6. Shaw Company sells 3,000 units of its product for $500 each. The selling price
includes a one-year warranty on parts. It is expected that 3% of the units will be
defective and that repair costs will average $50 per unit. In the year of sale,
warranty contracts are honored on 60 units for a total cost of $3,000. What amount
will be reported on Shaw Company's balance sheet as Warranty Liability on
December 31, 2012?
a.
b.
c.
d.
$3,000
$4,500
$1,500
It cannot be determined.
7. An aging of a company's accounts receivable indicates that $10,000 are estimated to
be uncollectible. If Allowance for Doubtful Accounts has a $1,100 credit balance, the
adjustment to record bad debts for the period will require a
a.
b.
c.
d.
credit to Allowance for Doubtful Accounts for $10,000.
debit to Bad Debts Expense for $10,000.
debit to Allowance for Doubtful Accounts for $8,900.
debit to Bad Debts Expense for $8,900.
8. Haven Company uses the percentage of sales method for recording bad debts
expense. For the year, cash sales are $600,000 and credit sales are $2,200,000.
Management estimates that 1% is the sales percentage to use. What adjusting entry
will Haven Company make to record the bad debts expense?
a. Bad Debts Expense
Accounts Receivable
b. Bad Debts Expense
Accounts Receivable
c. Bad Debts Expense
Allowance for Doubtful
Accounts
d. Bad Debts Expense
Allowance for Doubtful
Accounts
28,000
28,000
22,000
22,000
28,000
28,000
22,000
22,000
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ACCT201 Final Exam 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. Using the following information:
Accounts receivable
Allowance
Cash realizable value
12/31/11
$525,000
(35,000)
$490,000
During 2012, sales on account were $145,000 and collections on account were
$100,000. Also during 2012, the company wrote off $8,000 in uncollectible accounts.
An analysis of outstanding receivable accounts at year end indicated that
uncollectible accounts should be estimated at $40,000.
The change in the cash realizable value from the balance at 12/31/11 to 12/31/12
was a
a.
b.
c.
d.
$45,000
$32,000
$37,000
$40,000
increase.
increase.
increase.
increase.
10. In 2012, Boyle Company had credit sales of $900,000 and granted sales discounts
of $20,000. On January 1, 2012, Allowance for Doubtful Accounts had a credit
balance of $22,000. During 2012, $37,500 of uncollectible accounts receivable were
written off. Past experience indicates that 3% of net credit sales become
uncollectible. What should be the adjusted balance of Allowance for Doubtful
Accounts at December 31, 2012?
a.
b.
c.
d.
$26,400
$33,100
$10,900
$11,500
Answer Key
1. D
2. B
3. B
4. C
5. B
6. C
7. D
8. D
9. B
10. C
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