sample exam 1 - final

8/17/2019 Sample Exam 1 - FINAL

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UP JPIA Sample Exam

BA 99.1 (First Exam)

Theory:

1. Statement I: A proprietorship is a business owned by one person who is often the manager/operator of the

business.Statement II: The Stockholders of a corporation enjoy unlimited liability.

A. nly Statement I is true !. "oth Statements I and II are true". nly Statement II is true #. "oth Statements I and II are false

$. !ontinuation of an accounting entity in the absence of e%idence to the contrary is an e&ample of: A. 'conomic 'ntity Assumption !. (oing !oncern )rinciple". *onetary +nit Assumption #. Time )eriod Assumption

,. -)IA !ompany has total assets of )$1 million at year end and owners e0uity of )1$ million. ow much does

-)IA owe its creditors2 A. )3$4 million !. )15$ million". )1$ million #. insufficient data

3. Assume -)IA sold merchandise for )1446444 on account. ow would this transaction affect -)IAs accounting

e0uation2 A. Increase both assets and liabilities by )1446444". Increase both assets and owners e0uity by )1446444!. Increase both liabilities and owners e0uity by )1446444#. 7o effect on the accounting e0uation because the effects cancel out

8. "alance sheet reports A. 9inancial position on a specific date". esults of operation on a specific date!. 9inancial position for a specific period#. esults of operation for a specific period

5. Income statement reports A. 9inancial position on a specific date

". esults of operation on a specific date!. 9inancial position for a specific period#. esults of operation for a specific period

;.


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14. I%y "ookstore recorded a cash collection on account by debiting !ash and crediting Accounts )ayable.


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1. A store paid )1444 for supplies and purchased additional supplies on account for ),44. The store paid )844 of

the accounts payable. 44". )1,44 #. )1>44

$4. If accounts recei%able increases during the period6 then: A. !ash collection from customers is e0ual to the sales re%enue.". Sales e%enue is less than cash collection from customers.!. !ash flow from in%esting acti%ities increases.#. Sales e%enue is greater than cash collection from customers.

$1. Assume "ebemon estaurant gains a client who prepays )1844 for a package of fi%e meals. "ebemon collects

the )1844 in ad%ance and will pro%ide the meals later. After pro%iding , meals6 what should "ebemon report on

the income statement2 A. !ash of )1844 !. Ser%ice e%enue of )1844". Ser%ice e%enue of )44 #. +nearned Ser%ice e%enue of )544

$$.


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b. Total cash paid during *arch d. !ash paid on a note payable during *archSome data from Aileens ledger: "alance Additional Information for the month Account 9eb. $> *ar.,1 of *arch

Aileen6 !apital )6444 )186444 46444wners '0uity:

In%estments by ownerEEEEEEEE. 2 146444


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'0uipment 16844Supplies $6444

Accounts )ayable 146844+nearned e%enue 86;44Tweety6 !apital >6>44Ser%ice e%enue 163;8Salaries '&pense 36534+tilities '&pense 16384 a m

) ,>61,8 ) 846;88

According to Tweetys ledger:

1. All accounts ha%e normal balances.$. Transposition errors on Accounts ecei%able and Sales e%enue accounts. According to postings made6 the

correct amounts are )116>4 and )16;38.,. The )repaid ent account is not yet adjusted for the month of -uly. The term of the contract is for nine months

starting -uly 16 $411.3. '0uipment bought on account was recorded as: #r. Supplies $444 H !r. !ash $4448. A cash collection of )$44 was recorded as debit to !ash6 )$44 and credit to Accounts )ayable6 )$44.5. Tweetys #rawing of )16844 was recorded as: #r. Tweety6 !apital 1844H !r. !ash 16844;. )ayment of salary for )344 was recorded as: #r. !ash 34H !r. Salary '&pense 34.

e0uired:1. )repare the correcting and adjusting entries.$. )repare the correct trial balance for Tweety !ompany.

$. Trial "alance figures are normal balances and adjustment information at September ,46 $411 is shown below for

'n Stage and Theater. The company follows a policy of adjusting and closing its accounts at the end of each

month.!ashEEEEEEEEE.EEEEEEEEEEEEEEEEEEEE..EE.)$86844)repaid film rentalEEEEEEEEEEEEEEEEEEEEEEE.E..E. 586444CandEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE ;86444"uildingEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE.. $146444

Accumulated #epreciation "uildingEEEEEEEEEEEEEEEEEE. 561$8)rojection e0uipmentEEEEEEEEEEEEEEEEEEEEEEEEE 46444

Accumulated #epreciation '0uipmentEEEEEEEEEEEEEEEEE. ;68447otes )ayableEEEEEEEEEEEEEEEEEEEEEEEEEEEE$446444 Accounts )ayableEEEEEEEEEEEEEEEEEEEEEEEEEE. >6844+nearned admissions re%enueEEEEEEEEEEEEEEEEEEEE.. 86$44'n6 !apitalEEEEEEEEEEEEEEEEEEEEEEEEEEEE...$446$8

Admissions e%enueEEEEEEEEEEEEEEEEEEEEEEEEE ;56;84Salaries '&penseEEEEEEEEEEEEEEEEEEEEEEEEEE.. $16$84Cight and power '&penseEEEEEEEEEEEEEEEEEEEEEEE. ;6;84

• 9ilm rental e&pense for the month is )3$6$;86 all of which had been paid in ad%ance.

• The building is being depreciated o%er a period of $4 years.

• The projection e0uipment is being depreciated o%er a period of 8 years.

• 7o entry has been made to record interest payable accrued during September. At September ,46 accrued

interest totals )16>44•


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• 'n6 the proprietor of the theater6 is paid )146844 e%ery month for his ser%ice in the the company.

e0uired:1. )repare the necessary adjusting and closing entries6 income statement and balance sheet for 'n Stage

and Theater.

2. Assume 'n uses the alternati%e method for adjustments. )repare the adjusting entries and the

re%ersing entries if needed.

EnR 53: Ivy | Justin | Roxy | Aileen | Erv | Lisa | Eirene | Terry Page 6

sample exam 1 - final

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