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Business > QUESTIONS & ANSWERS > ACCT 212 Midterm Exam (All)

ACCT 212 Midterm Exam

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ACCT 212 Midterm Exam ACCT Midterm Question 1.: (TCO 1) The Accounting Equation is used to develop the organization's financial reports. (1) Describe what owners' equity values would be if Assets are $100,000 and Liabilities are $27,000 by showing the Accounting Equation (10 points) and (2) provide an explanation of what accounts could be found in owners' equity. (10 points) Question 2. Question : (TCO 1) The financial statements present a company to the public in financial terms. (1) Which financial statement identifies where cash was generated and where it was spent during the year (10 points), and (2) identify the three major parts of this statement. (10 points) Question 3. Question : (TCO 1) The accounting profession follows a set of guidelines for measurement and disclosure of financial information called the Generally Accepted Accounting Principles (GAAP). (1) Explain what the International Financial Reporting Standards (IFRS) are (10 points) and (2) provide an example of its application. (10 points) Question 4. Question : (TCO 2) Transaction analysis results in the development of a journal entry. Supplies are purchased on account agreeing to pay $500 within 30 days. (1) Name the accounts impacted and how to use the format account name/debit or credit/dollar amount (10 points), and (2) explain how the Accounting Equation is impacted. (10 points) Question 5. Question : (TCO 3) Adjusting Entries are required at the end of the period to ensure that accrual accounting principles are applied. At the beginning of the month, $1,350 of office supplies were purchased. There was not a beginning balance and the one purchase was the only one for the month. At the end of the month, $500 of supplies remained. Develop the adjusting entry. (1) Name the accounts impacted and how using the format account name/debit or credit/dollar amount (10 points), and (2) explain how the Accounting Equation is impacted. (10 points) Question : (TCO 5) E-commerce creates its own risks, and therefore special internal controls. (1) Identify and explain one pitfall and one security measure for an online business (10 points) and (2) provide examples of how your selected security measure will strengthen internal control. (15 points) Question 2. Question : (TCO 5) The bank account as a control device helps to protect cash. One of the requirements is to conduct periodic bank statement reconciliations. Using the following data, complete the bank statement reconciliation for J & J Flooring, Inc. (Use the format shown on page 251 of your textbook.) (25 points) · The bank statement indicated a service charge of $56. · J & J made a deposit on May 31, but this deposit did not appear on the bank statement, $1,451. · A credit memo in the bank statement indicated a bank collection of a note for $1,300 with interest received of $16. This item was dated May 18. · Also included in the bank statement was a debit memo for a NSF check for $314 from Barney Smythe. · Checks #1406 for $1,342, #1610 for $1,609, and #1825 for $857 were written by J & J and sent to the respective companies, but these checks do not appear on the bank statement. · The balance on the bank statement as of May 31 was $13,019. · The Cash account on Janus’ books showed an amount of $9,716.

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