Ac550 Exam

1. | Question : | (TCO A) Listed below are several information, characteristics, and accounting principles and assumptions. Match the letter of each with the appropriate phrase that states its application. | | | Student Answer: | | : Historical cost principle | | 1 : Earnings process completed and realized or realizable | | | | : Going concern principle | | 2 : Cost of providing financial information versus the benefits derived from its use | | | | : Matching principle | | 3 : Accruals and deferrals in adjusting and closing process | | | | : Monetary unit | | 4 : Business enterprise assumed to have a long life | | | | : Revenue recognition principle | | 5 : Stable dollar assumption | | | | : Full disclosure principle | | 6 : Notes as part of necessary information to a fair presentation | | | | : Reliability characteristic | | 7 : Valuing assets at amount originally paid for them | | | | : Cost-benefit relationship | | 8 : The impact of an item on the overall financial operations of a company | | | | : Materiality constraint | | 9 : Presentation of error-free information with representational faithfulness | | | | | | Comments: | | | | 2. | Question : | (TCO B) Adjusting Entries: Unearned rent at 1/1/10 was $5,300 and at 12/31/10 was $6,000. The records indicate cash receipts from rental sources during 2010 amounted to $60,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. For each journal entry write Dr. for debit and Cr. for credit. | | | Student Answer: | | Unearned Rent Revenue 59,300 Rent Revenue 59,300 Cash receipts $60,000 Beginning balance 5,300 Ending balance (6,000) Rent revenue $59,300 | | | | Comments: | | | | 3. | Question : | (TCO B) Adjusting Entries: Data relating to the balances of various accounts affected by adjusting or closing entries appear below. (The entries which caused the