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(ACCT102)[2010](sum)quiz~jyu^_10015.pdf
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ACCT 102 - Introduction to Accounting

Quiz 2 C Summer 2010




NAME: .

STUDENT #: .






General Instructions:

1. Please verify that there are 10 pages including this cover page.

2. Please use non-erasable pen for answering all questions.

3. You have about 90 minutes to write the quiz.

4. Please do NOT engage in any dishonest behaviors during the quiz. Otherwise, you will get zero mark for the quiz.


Multiple Choice Questions (20 Marks)
Please choose the ONLY ONE correct answer to each question.

1. Nelson Company purchased equipment on July 1 for $27,500 and decided to depreciate the equipment on the straight-line method over its useful life of five years. Assuming the equipment's salvage value is $3,500, the amount of monthly depreciation expense Nelson should recognize is: ( ) A. $2,400 B. $ 200 C. $4,800 D. $ 400 E. $ 450
(27,500 - 3,500) / 60 months = $400
2. Beginning inventory plus net purchases is: ( ) A. Cost of goods sold. B. Merchandise available for sale. C. Ending inventory. D. Sales. E. Shown on the balance sheet.
3. A depreciation method that produces larger depreciation expense during the early years of an asset's life and smaller expense in the later years is a (an): ( ) A. Accelerated depreciation method. B. Book value depreciation method. C. Straight-line depreciation method. D. Units-of-production depreciation method. E. Unrealized depreciation method.
4. Intangible assets include: ( ) A. Patents. B. Copyrights. C. Trademarks. D. Goodwill. E. All of these.

5. A company borrowed $10,000 by signing a 180-day promissory note at 11%. The maturity value of the note is: A. $12,050 B. $12,275 C. $10,550 D. $12,825 E. $13,100
$10,000 + ($10,000 x 0.11 x 180/360) = $10,550
6. A company estimates that warranty expense will be 4% of sales. The company's sales for the current period are $185,000. The current period's entry to record the warranty expense is: A.
B.
C.
D.
E. No entry is recorded until the items are returned for warranty repairs.
7. Teller purchased merchandise from TechCom on October 17 of the current year and TechCom accepted Teller's $4,800, 90-day, 10% note. What entry should TechCom make on January 15 of the next year when the note is paid? A.
B.
C.
D.
E.

Interest earned during January: $4,800 x .10 x 15/360 = $20
equals: ( ) A. $(217,000). B. $375,000. C. $157,500. D. $217,500. E. $532,500.

Cr: Merchandise

5


Cr: Cash

2,45

tr
flects a:



A. Purchase. B. Return. C. Sale. D. Payment of the accouE. Purchase and recognition of a cash discount taken.
worth of merchandise. On December 8, it paid the balance in full, taking a 2% discount. The amount of the cash paid on December 8 equals: ( ) A. $200. B. $1,564C. $1,568. D. $1,600. E. $1,800.
$215,000. The