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ACCOUNTING 110 : ACC110

ACCOUNTING 110 : ACC110

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Published by ahoffm05
Accounting management decisions exam and soluions
Accounting management decisions exam and soluions

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Published by: ahoffm05 on Aug 11, 2010
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01/15/2013

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Indicative Exam
FACULTY OF BUSINESS
 
INDICATIVE EXAMINATIONACC110 ACCOUNTING 2
 SUBJECT CONVENOR:DAY & DATE: TIME:WRITING TIME: Three (3) hours READING TIME: Ten (10) minutesMATERIALS SUPPLIED BY UNIVERSITY: 5 x 6 page answer bookletsGeneral Purpose Answer SheetMATERIALS PERMITTED IN EXAMINATION: Battery operated calculator (must be no printeron calculator)2B Pencil/EraserNUMBER OF QUESTIONS:
50 multiple choice
questions as follows:
 Part A
: 50 questions (1 mark each)
Part B
: 5 questions (10 marks each)INSTRUCTIONS TO CANDIDATES:1. Enter your name and student number and sign in the space provided at the bottom of this page and complete relevant details on the General Purpose Answer Sheet.2. No written material, reference books or notes will be permitted into the examinationroom.3. Candidates are to attempt
all
questions.4. All questions in Part A are to be answered on the General Purpose Answer Sheet.Questions for Part B must be answered in the Answer Booklets provided. Answer eachquestion in a
separate
answer booklet.5. The General Purpose Answer Sheet must be completed in 2B pencil. The lettered boxcorresponding to the most correct answers must be filled in completely. To change ananswer erase completely and remark.6. Candidates are advised to show all workings in Part B clearly labelling them as such.7. Total marks for this paper equal 100.
This examination is worth 60% of the final assessment.
 INSTRUCTIONS TO INVIGILATORS:
The examination paper must not be retained by the candidate.STUDENT NAME: STUDENT NO:STUDENT SIGNATURE:PART A – MULTIPLE CHOICE
This part consists of fifty multiple choice questions. All questions must be attempted.
1. All amounts paid to acquire a non-current asset and to get it ready for its intended useare referred to as:
 
A. capital expendituresB. salvage expendituresC. the cost of an assetD. revenue expendituresE. none of the above.2. Patents and copyrights are examples of:A. current assetsB. property, plant and equipmentC. intangible assetsD. tangible assetsE. none of the above.3. Two hundred hectares of land are purchased for $120,000. Additional costs include$5,000 agent’s commission, $10,000 for removal of an old building, $6,000 for paving,and an $800 survey fee. What is the cost of the land?A. $141,800B. $141,000C. $135,000D. $135,800E. none of the above.4. Jackson Constructions paid $42,000 for equipment with a fair market value of $46,000.Jackson Constructions will record equipment at:A. $42,000B. $46,000C. either $42,000 or $46,000D. $44,000E. none of the above.5. Cycle World made a lump-sum purchase of land, buildings, and equipment for$630,000. The estimated market values for the items are respectively, $210,000,$322,000, and $168,000. Cycle World should debit the equipment account for:A. $289,800B. $189,000C. $151,200D. $168,000E. none of the above.6. If a capital expenditure is mistakenly recorded as a revenue expenditure, the effect is to:A. understate net profit, owner’s equity, and assetsB. overstate net profit and owner’s equity, and understate assetsC. understate net profit and owner’s equity, and overstate assetsD. overstate net profit, owner’s equity, and assetsE. none of the above.7. The process of allocating a non-current asset’s cost to expense over the period the assetis used is called:
 
A. amortisationB. depreciationC. depletionD. direct write-off E. none of the above.8. Which depreciation method generally results in the greatest depreciation expense in thefirst full year of an asset’s life?A. straight-lineB. units-of-productionC. reducing-balanceD. either straight-line or reducing-balanceE. none of the above.9. On 1 January 20X5, Bark Manufacturing purchased a machine for $27,500, and expectsto use the machine for a total of 32,000 hours over the next four years. Bark set theresidual value on the machine at $3,500. Bark used the machine for 6,000 hours in20X5 and 7,200 hours in 20X6.What is the depreciation expense for 20X5 if Bark uses reducing-balance depreciation(at 1.5 times the straight-line rate)?A. $9,000B. $10,312.50C. $6,875D. $6,000E. none of the above.10. Which of the following statements is true?A. Accumulated depreciation is that portion of an asset’s cost that has already beenrecorded as an expense.B. Depreciation is a process of valuation.C. Depreciation represents the cash a business has set aside to replace assets as theybecome fully depreciated.D. Accumulated depreciation is classified as a liability account on the balance sheet.E. none of the above.11. On 1 January 20X5, Homes Real Estate purchased a $45,000 vehicle to chauffeurclients to prospective homes. Homes plans on driving the vehicle for five years or100,000 miles. Expected residual value is $10,000.Homes Real Estate drove the vehicle 25,000 miles in 20X7. The depreciation expensefor 20X7 using the units-of-production/use method is:A. $6,480B. $8,750C. $6,200D. $2,880E. none of the above.12. Ronnie’s Wings acquired equipment on 1 January 20X3, for $300,000. The equipmenthad an estimated useful life of 10 years and an estimated salvage value of $25,000. On

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