Mana Arnam

Professor Hurley

Accounting 102-002-Midterm Exam

8 November 2021

1) B) Guarantee a return to investors.

2) A) Technological controls.

3) E) Required by Sarbanes-Oxley (SOX) to be documented and certified if the company's stock is tra
on an exchange (a public company).

4)
Add $2,790 in money market fund + $21,430 of cash in bank + $200 of cash in
petty cash fund + $5,000 of U.S. Treasury bill with maturity of less than three
months on date of purchase = $29,420.
Answer is B

5) Day’s Sales uncollected ratio = Ending Accounts Receivable/Net Sales *

365
= $0.8 mills /$4.2 mills *365= 69.5 days
Answer is E

6) The journal entry is as follows:

Delivery expenses A/c Dr. $43
Merchandise inventory A/c Dr. $127
Miscellaneous expenses A/c Dr. $12
 To Cash A/c                                $182
(To record the reimbursement of the account)
 Note: All the expenses include delivery expenses, merchandise inventory and
miscellaneous expenses are debited, and cash credited for $182.

Answer is B) Credit to Cash for $182.

7) A) To be able to charge more due to fees and interest.

8) E) A note receivable.

9) (Principal of the note x Annual Interest Rate x Time expressed in fraction of

year (360 days using the "banker's rule") = Interest)
$7,500 x 0.06 = 450
450 x 90 / 360 = $112.50
Answer is B) $112.50.

10) B) July 9.

11)
$10,000 * 0.09 * 180 / 360 = $450

Answer is A) $450

12)
Answer is D) Allows firms to receive cash earlier.

13)
Accounts receivable turnover ratio = 1200,000/400,000 = 3 
Answer is C) 3.0
14)
Answer is D) The use of the direct write-off method for bad debts.

15)
Answer is E) $4,400

16)
Answer is C) Measures the decline in market value of an asset.

17)

Depreciable value = 13,000-3,000 = $10,000

Depreciation for 5th year = $10,000/2 = $5,000

Answer is C) $5,000.

18)
Answer is C) $200,700 to Land; $6,000 to Building.

19)
Answer is B) Book value.

20)
Answer is D) A debit to Cash of $42,000.
21)
Answer is E) Are revenues.
22)
15,000*0.06= 900
900*90/360=$225
Answer is A) $225

23)
Answer is D) Is a written promise to pay a specified amount on a stated future date within one
year or the company's operating cycle, whichever is longer.

24) This means they represent prepayments made for your services that you can't record as
revenue until you fulfill them at a later time
Answer is B) Debit Cash $500,000, credit Unearned Ticket Revenue $500,000.

25)
Answer is C) Debit Interest Expense $625; credit Interest Payable $625.