ACCT 212 Week 4 Midterm (Version 1: Fall 2018)
- Question: (TCO 1) The Accounting Equation is … to develop the organization’s financial reports. (1) Describe what owners’ equity values would … 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 … found in owners’ equity. (10 points)
- 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: (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 (10 points) and (2) provide an example of its application. (10 points)
- 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 (10 points), and (2) explain how the Accounting Equation is impacted. (10 points)
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- 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) 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 (10 points) and (2) provide examples of how your two selected internal control procedures will meet the goal of safeguarding assets and promoting ethical business practices. (15 points)
- 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)
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.
