ACCT 212 Midterm………………(ACCT 212 Financial Accounting – DeVry)

1.

Question :

(TCO 1) The Accounting Equation
is used to develop the organizations financial reports. (1) Describe what
owners’ equity is (10 points) and (2) provide an example of an owners’
equity account. (10 points)

2.

Question :

(TCO 1) The financial statements
present a company to the public in financial terms. (1) Which financial
statement identifies how well the company performed during the year (10
points) and (2) explain what information this financial statement provides.
(10 points)

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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 Entity Assumption is (10 points) and (2)
provide an example of its application. (10 points)

4.

Question :

(TCO 2) Transaction analysis
results in the development of a journal entry. Supplies are purchased on
account agreeing to pay $2,500 within 30 days. (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)

5.

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 $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 $100 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)

6.

Question :

(TCO 5) Internal Controls are
required 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)

7.

Question :

(TCO 5) The bank account as a
control device that 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 Acorn Plumbing, Inc. (Use
the format shown on page 255 of your textbook) (25 points)

·The bank statement indicated a service charge of $56.
·Acorn 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 dated 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 Acorn 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
$13,119.
·The Cash account on Acorn’s books showed an amount of
$9,816.