I don't know why question NO. 30 choose D instead of B. Can anyone help?

Midterm Exam Instructions The midterm exam will be held during our regular class time. The midterm exam has 30 multiple-choice questions similar to those in Orion assignments. A calculator might be helpful for the exam. If you forget to bring a calculator, you cannot use a smart phone to do calculations. Make sure you know your 3-digit secret ID number posted on Blackboard. If you do not know the ID number, your Scantron cannot be processed. You will be responsible for the consequence caused by this error. Read and follow the exam instructions on the first page of the exam. You must have a Baruch ID during the exam time. On your Baruch ID, stick a post-it note with your 3 digit ID number. Exam proctors will verify your ID number during the exam time. 1 PRACTICE MIDTERM EXAM ACC 2101 - Fall 2016 NAME (PRINT) _______________________________ Exam ID Number _______________________________ By signing your name below, you are acknowledging your compliance with the Baruch College Code of Academic Integrity and all policies related to it. ___________________________________________ Signature Instructions for Scantron form: 1. In the NAME box, print your name in INK (last name, first name) 2. In the SUBJECT box, print your section number (e.g., BTA, BTB, BTC, etc.) 3. In the ID NUMBER box, print six zeros + 3 digit IDposted on Blackboard. For example, if your exam ID is 123. Then print 000000123. Then fill in the bubbles below each of the 9 digits. Make sure fill in all these zeros; otherwise your Scantron may not be processed correctly. 4. In the TEST FORM box, mark the version of your exam (A, B, or C) Failure to follow these instructions will result in a 5% penalty to your exam grade. Other instructions: Before the exam: 1. Do not open the exam until instructed to do so by the proctor. During the exam: 2. This exam has 30 questions. Make sure you have a complete exam. 3. You will not be allowed to go to the restroom or leave your seat during the exam. 4. You may not use cell phones, laptops, or other wireless devices during the exam. 5. You must keep your photo ID available. A proctor will come by to check your ID at some point during the exam. 6. Proctors cannot answer questions. 7. Mark the Scantron sheet with a # 2 pencil. Note that only the Scantron sheet will be graded. 8. Choose the best answer for each question. At the end of the exam: 9. At the end of the exam, we will give a 10 minute warning and a 5 minute warning. After the 5 minute warning is given, you will not be allowed to leave the room and must remain seated until every exam has been collected. 10. Stop writing immediately when time is called. Continuing to work after time is called will result in an immediate 10% penalty to your exam grade. In order to be fair to all the students, this rule will be very strictly enforced. 11. The exam and Scantron sheet must be handed in together at the end of the exam. Otherwise, your exam will not be graded. 2 1. Which of the following accounts has a credit balance? A. Salaries Expense B. Land C. Prepaid Rent D. Income Tax Payable 2. The primary difference between accrual-basis and cash-basis accounting is: A. Cash-basis accounting is allowed for financial reporting purposes but not accrual-basis accounting B. Accrual-basis accounting violates both the revenue recognition and matching principles C. The timing of when revenues and expenses are recorded D. Adjusting entries are only a necessary part of cash-bas is accounting 3. Receiving assets from customers before services are performed res lutes in: A. Prepaid Assets B. Services Revenue C. Unearned Revenues D. Accounts Receivable 4. Which of the following statements regarding financial reports is not correct? A. An income statement shows revenues and expenses B. A balance sheet contains assets , liabilities , and stockholders ' equity information C. A statement of cash flows shows cash inflows and outflows from operating, investing and financing activities D. A statement of stockholders ' equity reports revenues , net income, and dividends information 5. Which of the following accounting principles states that expenses are recognized in the same period as the revenues they help to generate? A. Conservatism B. Matching principle C. Revenue recognition D. Accounting equation 3 6. If the beginning balance of retained earnings equals $12,000, the ending balance of retained earnings equals $15,000, and dividends for the year equal $1,000, then net income for the year equals: A. B. C. D. $3,000 $4,000 $2,000 $1,000 7. A company receives a $50,000 cash deposit from a customer on October 15 but will not provide services until November 20. Which of the following statements is true? A. The company records service revenue on October 15. B. The company records cash collection on November 20. C. The company records unearned revenue on October 15. D. The company records nothing on October 15. 8. On July 1, 2015, Herzog Mining lends cash and accepts a $9,000 note receivable that offers 10% interest and is due in nine months. Herzog reported its financial statements at the end of fiscal year on December 31, 2015 (An adjusting entry for interest revenue was recorded). How would Herzog record the transaction on April 1, 2016, when the borrower pays Herzog the correct amount owed? A. B. C. D. 4 9. A summary of Max Company's December 31, 2015, accounts receivable aging schedule is presented below: Age Group 0 - 60 days 61 - 90 days 91 - 120 days over 120 days Amount Estimated Percentage Uncollectible 0.5% 1% 10% 50% $60,000 22,000 3,000 1,000 On January 1, 2015, the allowance for uncollectible accounts had a credit balance of $1,000. During 2015, $950 of accounts receivable were written off as uncollectible. What is Max Company's uncollectible accounts expense for 2015? A. $1,320 B. $1,270 C. $320 D. $2,320 10. A company purchased inventory for $800 per unit. The inventory was marked up to sell for $1,000 per unit. The entries to record the sale for cash and the cost of a unit of inventory would include debits to which of the following accounts? A. B. C. D. Sales, $1,000; Inventory, $800 Cash, $1,000; Cost of Goods Sold, $800 Cash, $800; Cost of Goods Sold, $1,000 Sales, $800; Inventory, $800 11. On July 1, 2015, Rents-A-Lot Inc. paid $96,000 for 24 months of rent on their warehouse. On December 31, 2015, what would be the amount of rent expense in the 2016 financial statements for Rents-A-lot under both the cash-basis and accrual-basis accounting? A. Cash-basis = $36,000; Accrual-basis = $36,000. B. Cash-basis = $0; Accrual-basis = $48,000. C. Cash-basis = $96,000; Accrual-basis = $24,000. D. Cash-basis = $0; Accrual-basis = $24,000. 5 12. At December 31, Amy Jo's Appliances had account balances in Accounts Receivable of $311,000 and $970 (debit) in Allowance for Uncollectible Accounts. An analysis of Amy Jo's December 31 accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for the year should be: A. $6,220. B. $6,450. C. $5,250. D. $7,190. 13. The following data was extracted from the records of Winsam Company: Sales revenue 450 units @ $35 per unit Purchases 400 units @ $20 per unit Beginning inventory 100 units @ $16 per unit Winsam's most recent income statement showed cost of goods sold of $8,800. Which method was used for valuing inventory? A. B. C. D. FIFO LIFO Average-cost Specific identification 14. On July 1, 2015, Rotan Corporation paid $72,000 cash for a three year insurance premium. What adjusting entry should Rotan record on December 31, 2015? Assume that no other adjusting entries have been recorded yet this year. A. B. C. D. Insurance expense Cash 72,000 Prepaid insurance Cash 72,000 Insurance expense Prepaid insurance 12,000 Insurance expense Cash 12,000 72,000 72,000 12,000 12,000 6 15. Which of the following would increase assets and increase liabilities? A. Provide services to customers on account. B. Purchase office supplies on account. C. Pay dividends to stockholders. D. Record salaries expense for salaries to be paid the following period. 16. On September 6, 2015, Larson paid suppliers $60,000 for inventory previously purchased on account. What journal entry should Larson record on September 6? A. B. C. D. Accounts payable Cash 60,000 Inventory expense Cash 60,000 Cash Accounts payable 60,000 Cash Accounts receivable 60,000 60,000 60,000 60,000 60,000 17. The following information relates to inventory for Shoeless Joe Inc. Under a perpetual inventory system, at what amount would Shoeless report gross profit using LIFO cost flow assumptions? A. $110. B. $80. C. $175. D. $120. 7 Use the following information to answer questions 18-20: Calistoga Produce estimates uncollectible accounts expense using the percentage of receivables method and expects % of all A/R not collectible. The company reported accounts receivable and allowance for uncollectible accounts of $471,000 and $1,650 respectively, at December 31, 2015. During 2016, Calistoga's credit sales and collections were $315,000 and $319,000, respectively, and $1,720 in accounts receivable were written off. 18. Calistoga's accounts receivable at December 31, 2016 are: A. $467,000. B. $473,280. C. $465,280. D. $469,280. 19. After recording the adjusting entry for uncollectible accounts at December 31, 2016, what is Calistoga's balance in the allowance for uncollectible accounts? A. $2,256. B. $2,326. C. $2,396. D. $1,505. 20. Calistoga's 2016 uncollectible accounts expense is: A. $2,256. B. $2,326. C. $2,396. D. $1,720. 21. On November 1, 2015, J&J Inc. received $12,000 from a customer for services to be performed evenly over the period November 1, 2015 - January 31, 2016. What adjusting entry should J&J record on December 31, 2015? Assume that no other adjusting entries have been recorded yet this year. A. B. C. D. Unearned service revenue Service revenue 8,000 8,000 Service revenue Cash 12,000 Cash Service revenue 12,000 12,000 12,000 Cash Unearned service revenue 8,000 8,000 8 22. The owner of a business paid cash from his personal checking account to purchase an automobile for his personal use. From the point of view of the business, this transaction: A. B. C. D. Increased liabilities and increased expenses. Decreased assets and increased expenses. Increased assets and increased owners' equity. Is not a transaction recognized by the business. 23. On April 1, Robert LLC purchased two units of inventory, A and B. The cost of unit A was $650, and the cost of unit B was $625. On April 30, Robert LLC had not sold the inventory. The market value of unit A was now $685 while the market value of unit B was $550. The adjustment associated with the lower-of-cost-or-market method on April 30 will be: A. B. C. D. 24. Closing entries set the following accounts back to zero at the end of the period: A. B. C. D. Assets, liabilities, and stockholders' equity Revenues and expenses All permanent accounts Revenues, expenses, and dividends 9 25. Given the following data, calculate the total gross profit using the average-cost method, if the selling price was $20 per unit. Date Item 1/1 Beginning inventory 3/5 Purchase of inventory 5/30 Purchase of inventory 12/31 Ending inventory A. B. C. D. Unit 40 units at $12 per unit 18 units at $14 per unit 24 units at $18 per unit 20 units $851.71 $634.78 $359.60 $283.90 26. On January 2, 2016, Larson Inc. consulted on the design of a computer system and billed the customer $2,200 for services rendered. Larson expects the customer to pay in one month. What journal entry would Larson record on January 2? A. B. C. D. Cash Service revenue 2,200 Cash Unearned revenue 2,200 Accounts receivable Service revenue 2,200 2,200 2,200 2,200 No journal entry necessary. 27. An owner makes an investment of cash into the business. For the business, this transaction would include a: A. B. C. D. Debit to Cash and a credit to Notes Payable. Debit to Cash and a credit to Common Stock. Debit to Retained Earnings and a credit to Cash. Debit to Common Stock and a credit to Retained Earnings. 10 28. Consider the following events for Betterment Incorporated: January 1 Betterment purchases gasoline for $200 on account. January 7 Betterment advertises lawn mowing services for $100 per lawn. January 9 Betterment signs up 8 customers who pay a total of $800 cash. January 12 Betterment mows the lawns of the 8 customers and all gasoline purchased on January 1 is used. January 13 Betterment pays for the gasoline purchased on January 1. Under accrual-basis accounting, what is the appropriate day to record the expenses related to the gasoline? A. January 1 B. January 12 C. January 13 D. January 7 29. Sooner Company has had a net income of $7,400, $4,500, $8,100, and $9,000 over the first four years of the company's existence. If the average annual amount of dividends paid over the last four years is $2,100, what is the ending retained earnings balance? A. $20,600 B. $29,000 C. $37,400 D. $29,150 30. Niva Company has the following information for their inventories A, B, C, and D: The necessary adjustment associated with the lower-of-cost-or-market method would be: A. Inventory 675 Cost of Goods Sold 675 B. C. D. Cost of Goods Sold Inventory 675 Inventory Cost of Goods Sold 475 Cost of Goods Sold Inventory 475 675 475 475 11 SCRATCH PAPER 12