ACCT 212 Week 4 Mid-term (Version 3: Summer 2018)

1. Question: (TCO 1) The Accounting Equation is … to develop the organization’s financial reports. (1) Describe what assets value would be if Liabilities are $12,000 and Owners’ Equity is $50,000 by showing the Accounting Equation, and (2) provide an example of two asset accounts that could contain the value.
2. Question: (TCO 1) The Accounting Equation is … to develop the organization’s financial reports. (1) Describe what liabilities value would be if Assets are $50,000 and Owners’ Equity is $25,000 by showing the Accounting Equation and (2) provide an example of two liability accounts.
3. Question: (TCO 1) The Accounting Equation is … 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 and (2) provide an explanation of what accounts could … found in owners’ equity.
4. Question: (TCO 1) The financial statements present a company to the public in financial terms. (1) Which financial statement should … prepared first and why, and (2) explain what information this financial statement provides.
5. Question: (TCO 1) The financial statements present a company to the public in financial terms. (1) Which financial statement requires input from the Income Statement and Statement of Retained Earnings, and (2) explain what information this financial statement provides.

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1. 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, and (2) identify the three major parts of this statement.
2. 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 Stable-Monetary-Unit Assumption is and (2) provide an example of its application.
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 Going-concern Assumption is and (2) provide an example of its application.
4. 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 and (2) provide an example of its application.
5. Question: (TCO 2) Transaction analysis results in the development of a journal entry. In the start-up of a business, the owner contributes $750,000 of cash. (1) Name the accounts impacted and how to use the format account name/debit or credit/dollar amount, and (2) explain how the Accounting Equation is …
6. Question: (TCO 2) Transaction analysis results in the develop ment of a journal entry. A building is purchased for $535,000. (1) Name the accounts impacted and how to use the format account name/debit or credit/dollar amount, and (2) explain how the Accounting Equation is …
7. 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, and (2) explain how the Accounting Equation is impacted.
8. Question: (TCO 3) Adjusting Entries are … at the end of the period to ensure that accrual accounting principles are applied. The rent is prepaid for three months at $1,200 per month. Develop the adjusting entry at the end of the first month that rent should … applied. (1) Name the accounts impacted and how to use the format account name/debit or credit/dollar amount, and (2) explain how the Accounting Equation is impacted.
9. Question: (TCO 3) Adjusting Entries are … 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, and (2) explain how the Accounting Equation is impacted.
10. Question: (TCO 3) Adjusting Entries are … at the end of the period to ensure that accrual accounting principles are applied. The building that houses the business is … at an annual rate of $14,000. Develop the adjusting entry for year end. (1) Name the accounts impacted and how to use the format account name/debit or credit/dollar amount, and (2) explain how the Accounting Equation is impacted.
11. Question: (TCO 5) Internal Controls are … to safeguard assets and to ensure ethical business practices. (1) Identify and explain the reason for any two of the five components of internal control and (2) provide examples of how your two selected components of internal control will meet the goal of safeguarding assets and promoting ethical business practices.
12. Question: (TCO 5) Internal Controls are … to safeguard assets and to ensure ethical business practices. (1) Identify and explain the reason for any two of the seven internal control procedures and (2) provide examples of how your two selected internal control procedures will meet the goal of safeguarding assets and promoting ethical business practices.
13. 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 and (2) provide examples of how your selected security measure will strengthen internal control.
14. 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)
    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 … 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
15. 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. (Use the format shown on page 251 of your textbook.) (25 points)
    Prepare a bank reconciliation using B & B’s Restaurant Supply Inc.’s information for August 31
    A NSF check from Johnny Jones for $3,164.
    Two deposits made on August 31 were not on the bank statement, totaling $2,897.
    The bank collected an EFT payment for Rent for $2,600.
    August 31 balance in Cash was $2,005.
    The owner had written check #1598 for $500 and recorded this check as $5,000.
    The balance on the bank statement as of August 31 was $5,316.
    Bank service charge of $28 was shown on the bank statement.
    Checks #1572, 1606, 1116, and 1242 for $419, $126, $650, and $1,105, respectively, were not shown on the bank statement, even though the company had sent the checks.
16. Question: 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. (Use the format shown on page 251 of your textbook.) (25 points)
    Use the information below to prepare the bank reconciliation for Collier Cleaners for the month of September.
    The bank statement indicated bank service charges of $63.
    Outstanding checks as of September 30 amounted to $1,405.
    Deposits in transit as of September 30 amounted to $2,769.
    The ending balance per the September bank statement is $40,753.
    Collier Cleaners bookkeeper mistakenly recorded a $1,610 cash disbursement as $1,160 for Office Supplies on check #2402.
    The bank mistakenly recorded a deposit of $2,800 as $280 on February 17.
    The bank made an EFT payment on behalf of the company for Insurance for $3,200.
    Bank collected rent of $3,000 and a note, for $16,450, including interest of $450.
    The ending cash balance per the books for September before any adjustments was 28,900.