US 420 MiDTERM SPRING iame: student Number Department: Section 1: Each question is worth 5 points 1- The financial statement that summarixes information about the cash infloss and cutflows during a period is the.... A. Incorne stavement. B. Owner's equity statement. C. Balance sheeL. D. Audit report: E. Statement of cash flows. 2- The agrecment of the detit ase credit totak of the trial balance gives assurance that: 1. Equal debits and credits have becn reconded for all transactions II. The addition of the account balusees in the trial balasce bas been performed correctly; III. Prove that the company has reconded all tranuctions conect. Which ond(s) of the them followiag is(arc) true? A. Only IB. Only II C. Ooly III D. I and II E. II wad III 3. Which of the following explanations related widh aceral bosis accounting is wnong? A. Cimpinies rocond merwes whes they are samed lied record experbes when they are B. Coeppaip rownd revemes when they roctive the cash and they reoord expenses whes the cash is paid. C. It is oose of the tno tyses of acsounting metbods and is rroord hoeping. D. Rruencing regardleis of monetary inflows and cuiffows E. Dee profitability of itie eotmpany applying ascrual busis acceunting can be measured much becter atca compared with applying the eath basia accountine. 4. Adiestinenes for accrued espencex: A. docreas fiatilities and derrease erponies. B. incrase liabilities and increase expceies. C, incrale assres and increase revenues. D. Heenase assets and incrase expcases. E derrease expense and decrease liabilities. 5. Which of the fallowing explanatian related with the as a abed triat balance is wrung? A. This is nufficieit for the greparntion of firancial ieterenents. B. This is the trial halatice prepared before the adjusing entries C. This fis the trial talance projured after the adjusing entries. D. This is propared by waing the ledper accounts nocondel during the adiuatment process. It It gives te the chance of checking the equalipy of debits and credith. 6- The conpany tas 10,000 dotlan of revenues and 7,500 dollas of expenies Which of the followings tatitieent is thie for cloiliag tainsctions? A 2,500 dollan of retemse will be posted io lincoune Sormary account B. 7,00 sollars of expane will be potind lo credit side of income Summary account C. 10,000 sctarr of reveme will be posed to debt side of Incceme Summay twcount D. The company hiss a lass of 2,500 dollan F. I0.000 dollars of tevenue will be posted to credit side on Income Summary account