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(ACCT202)[2011](s)midterm~1406^_54999.pdf
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ACCT 202 Financial Accounting II Spring 2011 Midterm Exam
Date: April 6, 2010 (Wednesday) Time: 7pm C 9pm (2 Hours)
This exam paper contains TEN (10) pages (including this cover page).
Instructions:
1.
This is a CLOSED book examination.

2.
This exam contains 15 MC questions and 5 problems. ALL questions are compulsory.

3.
Answer all questions in the answer booklet provided.

4.
Write your name, student number, and lecture section number (L1: Tue & Thu 16:30-17:50; L2: Tue & Thu 13:30-14:50) on the cover of the answer booklet.

5.
START EACH QUESTION ON A NEW PAGE. Indicate the question no clearly.

6.
SHOW YOUR WORKINGS. If you do not show your workings, you may not receive full credit for a correct answer and you will not receive any partial credit for an incorrect answer.

7.
Materials, aids and instruments allowed during the examination: electronic calculators ONLY.

8.
Budget your time wisely. You have 120 minutes to get a maximum of 120 marks. On average, use 1 minute to get every 1 mark.

9.
You may keep this exam paper. Answers to this exam will be released on LMES tonight. Please report any problem in the answers immediately.


TURN OFF YOUR MOBILE PHONES!!!


Instructions: Answer all MC questions on the FIRST PAGE of the Answer Booklet. Answer each question on a NEW LINE. You are suggested to spend about 2 minutes on each question.
1. In general, companies recognize revenue
A. at completion of production.
B. at the point of sale.
C. when cash is received.
D. after all costs are recognized.
2. Revenue is recognized by the consignor when the
A. goods are shipped to the consignee.
B. consignee receives the goods.
C. consignor receives an advance from the consignee.
D. consignor receives an account sales notification from the consignee.
3. The percentage-of-completion method must be used when certain conditions exist. Which of the following is not one of those necessary conditions?
A. Estimates of progress toward completion, revenues, and costs can be estimated reliably.
B. Total contract revenue can be measured reliably.
C. The buyer can be expected to satisfy some of the obligations under the contract.
D. It is probable that the economic benefits associated with the contract will flow to the company.
4. Which of the following are recognized each period under the cost-recovery method?
A. Costs only.
B. Revenues only.
C. Both costs and revenues.
D. None of these.
5. The fair value option allows a company to
A. record income when the fair value of its investment increases.
B. value its debt investments at fair value in some years but not other years.
C. report most financial instruments at fair value by recording gains and losses as a separate component of stockholders equity.
D. All of the above are true of the fair value option.
6. Santo Corporation declares and distributes a cash dividend th