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<strong>ACCT</strong> <strong>212</strong> DeVry Entire Course Latest<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 1 Discussion 1<br />
I suspect that most of us can view and appreciate most sports such as baseball, football, and basketball.<br />
What if you were to view a Cricket World Cup game? If you didn’t know the rules you probably would not<br />
have much fun. The same happens in business if you don’t understand its language – Accounting. What<br />
rules impact a business’ Accounting Information System? What types of compliance is required?<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 1 Discussion 2<br />
In this graded discussion, we will be examining the operation of the Accounting Information System (AIS)<br />
with the use of problems and exercises from your textbook. The goal is to cover all of the requirements to<br />
ensure an opportunity for your successful completion of Course Project. Let’s start with Exercise 1-17A.<br />
Read about CoffeeShop Doughnuts and select one of the four requirements to answer.<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 1 Check Point<br />
Question 1<br />
(TCO 1) The type of accounting that makes projections to determine if a company should build a new<br />
store is<br />
financial accounting.<br />
business accounting.
managerial accounting.<br />
projection accounting.<br />
Question 2.<br />
(TCO 1) The _____ is elected by the stockholders and is responsible for setting policy and appointing<br />
officers.<br />
board of directors<br />
chief executive officer (CEO)<br />
chief financial officer (CFO)<br />
advisory council<br />
Question 3.<br />
(TCO 1) The acronym GAAP stands for<br />
generally acceptable authorized pronouncements.<br />
government authorized accountant principles.<br />
generally accepted accounting principles.<br />
government audited accounting pronouncements.<br />
Question 4.<br />
(TCO 1) The accounting assumption that states that the business, rather than its owners, is the reporting<br />
unit is the<br />
entity assumption.<br />
going concern assumption.<br />
stable-monetary-unit assumption.<br />
historical cost assumption.<br />
Question 5.<br />
(TCO 1) Another way to state the accounting equation is<br />
Assets = Liabilities + Paid-in Capital – Common Stock
Assets = Liabilities + Retained Earnings<br />
Assets = Liabilities + Paid-in Capital + Retained Earnings<br />
Assets = Liabilities – Paid-in Capital – Dividends<br />
Question 6.<br />
(TCO 1) The assets of a company<br />
must equal the liabilities of the company.<br />
include property, plant, and equipment and common stock.<br />
represent economic resources that are expected to produce a future benefit.<br />
include merchandise inventory and accounts payable.<br />
Question 7.<br />
(TCO 1) Net income is computed as<br />
revenues – expenses – dividends.<br />
revenues + expenses.<br />
revenues – expenses.<br />
revenues – expenses + dividends.<br />
Question 8.<br />
(TCO 1) A company’s gross profit for the period is reported on the<br />
balance sheet.<br />
income Statement.<br />
statement of cash flows.<br />
statement of retained earnings.<br />
Question 9.<br />
(TCO 1) An investor wishing to assess a company’s overall financial position at the end of the period<br />
would probably examine the
statement of cash flows and the income statement.<br />
income Statement only<br />
balance sheet.<br />
statement of retained earnings.<br />
Question 10.<br />
(TCO 1) What is the proper order for the categories of the statement of cash flows?<br />
Financing activities, investing activities, and operating activities<br />
Operating activities, investing activities, and financing activities<br />
Operating activities, financing activities, and investing activities<br />
investing activities, financing activities, and operating activities<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 2 Discussion 1<br />
Last week, we discussed “The Language of Business” and why the accounting information system is<br />
important in business. This week, we are going to look at the mechanics of how it all works. It might be a<br />
bit easier if we started with an example which would be the Genie Car Wash, Inc. in Chapter 2 of your<br />
textbook. Pick a transaction from Genie and let us know how it impacts the accounting equation. Make<br />
sure to identify the two accounts impacted. Why is it important to record your selected transaction?<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 2 Discussion 2<br />
In this graded discussion, we will be examining the operation of the Accounting Information System (AIS)<br />
with the use of problems and exercises from your textbook. The goal is to cover all of the requirements to<br />
ensure an opportunity for your successful completion of the Course Project. As you complete the<br />
requirements of Week 2, you should review the Course Project tab in Course Home, as you could start<br />
work on the Project. The template for the Course Project is located in Doc Sharing.<br />
Let’s start with Exercise 2-16A. Select one of the nine financial transactions of the medical practice of Bob<br />
Morin, P.C. Develop a journal entry with date and explanation. Post it in this discussion and then conduct<br />
peer reviews of your classmates. The next requirement is to select one of the five questions (a-e) and<br />
post an answer. Do show your computations.<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 2 Check Point
(TCO 2) A company received cash in exchange for issuing stock. This transaction increased assets and<br />
increased expenses.<br />
increased revenues.<br />
increased liabilities.<br />
increased equity.<br />
Question 2. Question :<br />
(TCO 2) A company performed services for a customer for cash. This transaction increased assets and<br />
decreased equity.<br />
increased liabilities.<br />
increased expenses.<br />
increased revenues.<br />
Question 3. Question :<br />
(TCO 2) A company performs services for a client on account. When the company receives the cash from<br />
the customer 1 month later<br />
a revenue account is increased.<br />
a liability account is decreased.<br />
an asset account is increased.<br />
an expense account is decreased.<br />
Question 4. Question :<br />
(TCO 2) The left side of a T-account is always the<br />
increase side.<br />
decrease side.<br />
debit side.<br />
credit side.
Question 5. Question :<br />
(TCO 2) An account is increased by a debit and has a debit balance. This account is<br />
an expense account.<br />
a liability account.<br />
an asset account.<br />
both an expense account and an asset account.<br />
Question 6. Question :<br />
(TCO 2) When journalizing and posting transactions in the books<br />
the rules of debit and credit are followed to increase or decrease each account.<br />
the credit side of the transaction is entered on the left margin.<br />
it is not necessary to use both the journal and the ledger.<br />
debits in the journal can be posted as credits in the ledger.<br />
Question 7. Question :<br />
(TCO 3) Under accrual accounting, revenue is recorded<br />
when the cash is collected, regardless of when the services are performed.<br />
when the services are performed, regardless of when the cash is received.<br />
either when the cash is received or the sale is made.<br />
only if the cash is received at the same time the services are performed.<br />
Question 8. Question :<br />
(TCO 3) The event that triggers revenue recognition for the sale of goods is the<br />
date a contract is signed.<br />
date cash is received.<br />
transfer of control of the goods to the purchaser.<br />
completion of the services.
Question 9. Question :<br />
(TCO 3) The balance sheet reports<br />
assets, liabilities and stockholders’ equity.<br />
the changes in retained earnings.<br />
assets, liabilities, revenues and expenses.<br />
revenues and expenses.<br />
Question 10. Question :<br />
(TCO 3) To close the books of a company, you should<br />
debit each revenue account, credit each expense account, and debit the dividends account.<br />
credit each revenue account, debit each expense account, and debit the dividends account.<br />
debit each revenue account, credit each expense account, and credit the dividends account.<br />
debit each revenue account, debit each expenses<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 3 Discussion 1<br />
Unfortunately, a quick scan of the business news will normally result in reports of unethical business<br />
behavior. To prove this point, let’s start with a review of the news for stories about fraud and other<br />
unethical behavior in business. You can use the University Library to start your search. Once you have<br />
located an article share it with the class by developing a summary of the important information. Make sure<br />
that you give credit to your source.<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 3 Discussion 2<br />
Discussion 2 Go to Course Home and review the Course Project tab. Then download the Course Project<br />
template from Doc Sharing. In this graded discussion, we will be examining the operation of the<br />
Accounting Information System (AIS) with the use of problems and exercises from your textbook. The<br />
goal is to cover all of the requirements to ensure an opportunity for your successful completion of the<br />
Course Project.<br />
Let’s start with a review of the first three requirements of the Course Project. Explain why it is important to<br />
analyze each financial transaction of a business and to report it in the Accounting Information System.<br />
Suggestion: Revisit and review the Lecture tab in Weeks 1 and 2.
<strong>ACCT</strong> <strong>212</strong> DeVry Week 3 Course Project 1 Part A Rawls Repair Corporation<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 3 Check Point<br />
(TCO 5) The two most common types of fraud impacting financial statements are<br />
fraudulent financial reporting and e-commerce fraud.<br />
misappropriation of assets and embezzlement.<br />
fraudulent financial reporting and misappropriation of assets.<br />
cooking the books and fraudulent financial reporting.<br />
Question 2. Question :<br />
(TCO 5) Which of the following is a true statement regarding fraud?<br />
Fraud is committed when an error is made.<br />
Fraud does not occur in not-for-profit organizations.<br />
The expansion of e-commerce has caused fraud to decrease.<br />
Most businesses surveyed had experienced fraud.<br />
Question 3. Question :<br />
(TCO 5) The primary way that fraud is prevented and detected is through a proper system of<br />
checks and balances.<br />
management directives.<br />
internal control.<br />
internal and external audits.<br />
Question 4. Question :<br />
(TCO 5) A fidelity bond is a(n)<br />
employment contract for a specified period of time.<br />
insurance policy that reimburses a company for employee theft.<br />
contract prohibiting former employees from working for a competitor.
promise by a company to safeguard customers’ personal information.<br />
Question 5. Question :<br />
(TCO 5) Hints of where fraud, mistakes, or financial harm can occur in a company is called<br />
the control environment.<br />
risk assessment.<br />
control procedures.<br />
the tone at the top.<br />
Question 6. Question :<br />
(TCO 5) E-commerce pitfalls include all of the following except<br />
stolen credit card numbers.<br />
phishing expedition.<br />
encryption reporting.<br />
Trojan horses.<br />
Question 7. Question :<br />
(TCO 5) When preparing a bank reconciliation, which of the following items should be added to the book<br />
balance?<br />
EFT receipts<br />
Deposits in transit<br />
Collection items<br />
Both EFT receipts and collection items<br />
Question 8. Question :<br />
(TCO 5) Which of the following is an accurate statement regarding cash receipts over the counter?<br />
The point-of-sale terminal electronically transmits a record of the sale to the store’s main computer.<br />
Employees should take the deposit to the bank.
The cashier should reconcile the electronic record of the sales per the terminal to the record of cash<br />
received.<br />
Point-of-sale terminals cannot assist in inventory control.<br />
Question 9. Question :<br />
(TCO 5) Which of the following is an incorrect statement regarding short-term investments?<br />
Short-term investments are also called marketable securities.<br />
Short-term investments are easily convertible to cash.<br />
Short-term investments must be held for less than three months.<br />
Short-term investments allow a company to invest cash and earn a return.<br />
Question 10. Question :<br />
(TCO 5) If a buyer takes advantage of a sales discount, the journal entry recorded by the seller will<br />
include a(n)<br />
debit to cash and a credit to sales discount.<br />
debit to cash and a debit to sales discount.<br />
debit to cash and debit to accounts receivable.<br />
debit to cash and debit to sales returns and allowances.<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 4 Discussion 1<br />
A review of the balance sheet of a retailer, such as Wal-Mart, will disclose that in current assets the<br />
majority investment is in inventory. With manufacturers, such as Ford, the inventory is spread between<br />
three different categories. Let’s start our discussion with some basic inventory questions. How is inventory<br />
valued? Which inventory valuation method is most popular and why? What impact on the financial reports<br />
can the selection of an inventory valuation method have?<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 4 Discussion 2<br />
Go to Course Home and review the Course Project tab. Continue to use the Course Project template from<br />
Doc Sharing. In this graded discussion, we will be examining the operation of the Accounting Information<br />
System (AIS) with the use of problems and exercises from your textbook. The goal is to cover all of the<br />
requirements to ensure an opportunity for your successful completion of the Course Project.
Let’s start with Exercise 3-22A and practice developing journal entries to make adjustments. Select one of<br />
the six transactions and develop the adjusting journal entry. If you are using an example found in the<br />
textbook do mention the page number.<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 4 Checkpoint<br />
Question :<br />
(TCO 4) The cost of the inventory that the business has sold to customers is called<br />
inventory.<br />
cost of goods sold.<br />
purchases.<br />
gross profit.<br />
Question 2. Question :<br />
(TCO 4) The cost of inventory that is still on hand and has not been sold to customers is called<br />
cost of goods sold, an expense that appears on the balance sheet.<br />
inventory, a current asset that appears on the income statement.<br />
inventory, a current asset that appears on the balance sheet.<br />
purchases, an expense that appears on the income statement.<br />
Question 3. Question :<br />
(TCO 4) The inventory system that uses computer software to keep a running record of inventory on hand<br />
is the<br />
cost of goods sold inventory system.<br />
periodic inventory system.<br />
perpetual inventory system.<br />
hybrid inventory system.<br />
Question 4. Question :<br />
(TCO 4) The cost of inventory is the
purchase price.<br />
sum of all the costs incurred to bring the inventory to its intended use.<br />
sum of all the costs incurred to bring the inventory to its intended use, plus any discounts and allowances.<br />
sum of all the costs incurred to bring the inventory to its intended use, less any discounts and allowances.<br />
Question 5. Question :<br />
(TCO 4) ABC Auto Sales sells new Lexus vehicles. ABC will most likely use the _____ method to cost its<br />
ending inventory.<br />
first-in, first-out<br />
last-in, first-out<br />
specific-unit-cost<br />
weighted-average<br />
Question 6. Question :<br />
(TCO 4) To determine cost of goods sold under the FIFO method<br />
the first costs into inventory are the first costs assigned to cost of goods sold.<br />
the last costs into inventory are the first costs assigned to cost of goods sold.<br />
the average cost of the inventory must be determined.<br />
the company must first determine the specific units sold.<br />
Question 7. Question :<br />
(TCO 4) Under the _____ method, ending inventory is based on the costs of the most recent purchases.<br />
average-cost<br />
FIFO<br />
LIFO<br />
specific-identification<br />
Question 8. Question :
(TCO 4) The _____ principle states that the financial statements of a business must report enough<br />
information for outsiders to make knowledgeable decisions about the business.<br />
Consistency<br />
historical cost<br />
disclosure<br />
conservatism<br />
Question 9. Question :<br />
(TCO 4) The lower-of-cost-or-market rule requires a company to report inventories at the lower of<br />
historical cost or current sales price.<br />
historical cost or current replacement cost.<br />
current replacement cost or sales invoice price.<br />
FIFO cost or LIFO cost.<br />
Question 10. Question :<br />
(TCO 4) The inventory turnover ratio<br />
is determined by dividing cost of goods sold by net sales.<br />
shows how many times the company sold its average level of inventory.<br />
should be high for a company that sells high-priced inventory items.<br />
will be lower for companies that have many low-priced items in their inventory<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 4 Midterm Exam<br />
1. Question : (TCO 1) The Accounting Equation is used to develop the organization’s financial reports. (1)<br />
Describe what owners’ equity values would be if Assets are $100,000 and Liabilities are $27,000 by<br />
showing the Accounting Equation (10 points) and (2) provide an explanation of what accounts could be<br />
found in owners’ equity. (10 points)<br />
Question 2. Question : (TCO 1) The financial statements present a company to the public in financial<br />
terms. (1) Which financial statement identifies where cash was generated and where it was spent during<br />
the year (10 points), and (2) identify the three major parts of this statement. (10 points)
Question 3. Question : (TCO 1) The accounting profession follows a set of guidelines for measurement<br />
and disclosure of financial information called the Generally Accepted Accounting Principles (GAAP). (1)<br />
Explain what the Going-concern Assumption is (10 points) and (2) provide an example of its application.<br />
(10 points)<br />
Question 4. Question : (TCO 2) Transaction analysis results in the development of a journal entry.<br />
Supplies are purchased on account agreeing to pay $500 within 30 days. (1) Name the accounts<br />
impacted and how to use the format account name/debit or credit/dollar amount (10 points), and (2)<br />
explain how the Accounting Equation is impacted. (10 points)<br />
Question 5. Question : (TCO 3) Adjusting Entries are required at the end of the period to ensure that<br />
accrual accounting principles are applied. The building that houses the business is depreciated at an<br />
annual rate of $14,000. Develop the adjusting entry for year end. (1) Name the accounts impacted and<br />
how to use the format account name/debit or credit/dollar amount (10 points), and (2) explain how the<br />
Accounting Equation is impacted. (10 points)<br />
1. Question : (TCO 5) Internal Controls are required to safeguard assets and to ensure ethical business<br />
practices. (1) Identify and explain the reason for any two of the five components of internal control (10<br />
points) and (2) provide examples of how your two selected components of internal control will meet the<br />
goal of safeguarding assets and promoting ethical business practices. (15 points)<br />
Question 2. Question : (TCO 5) The bank account as a control device helps to protect cash. One of the<br />
requirements is to conduct periodic bank statement reconciliations. Using the following data, complete the<br />
bank statement reconciliation. (Use the format shown on page 251 of your textbook.) (25 points)<br />
Use the information below to prepare the bank reconciliation for Collier Cleaners for the month of<br />
September.<br />
•????????The bank statement indicated bank service charges of $63.<br />
•????????Outstanding checks as of September 30 amounted to $1,405.<br />
•????????Deposits in transit as of September 30 amounted to $2,769.<br />
•????????The ending balance per the September bank statement is $40,753.<br />
•????????Collier Cleaners bookkeeper mistakenly recorded a $1,610 cash disbursement as $1,160 for<br />
Office Supplies on check #2402.<br />
•????????The bank mistakenly recorded a deposit of $2,800 as $280 on February 17.
•????????The bank made an EFT payment on behalf of the company for Insurance for $3,200.<br />
•????????Bank collected rent of $3,000 and a note, for $16,450, including interest of $450.<br />
•????????The ending cash balance per the books for September before any adjustments was 28,900.<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 5 Discussion 1<br />
In the spotlight about FedEx Corporation, you get a feel for the amount of investment in assets and the<br />
resulting liabilities that are required to operate a competitive corporation. Even small businesses require<br />
plant, property, and equipment to compete and normally rely on some form of debt to finance themselves.<br />
Let’s start up a company that sells auto parts, like Napa or Auto Zone. What assets would we require?<br />
How might we finance them?<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 5 Discussion 2<br />
Go to Course Home and review the Course Project tab. Continue to use the Course Project template from<br />
Doc Sharing. In this graded discussion, we will be examining the operation of the Accounting Information<br />
System (AIS) with the use of problems and exercises from your textbook. The goal is to cover all of the<br />
requirements to ensure an opportunity for your successful completion of the Course Project. Let’s start<br />
with Exercise 3-30A. For the Anderson Production Company, select one adjusting and one closing entry<br />
requirement. Develop the journal entry for review by your peers. Make sure to reference any page<br />
numbers of examples you are using. Hint: Revisit the Week 2 Lecture.<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 5 Course Project 1 Part B Rawls Repair Corporation<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 5 Checkpoint<br />
Question :<br />
(TCO 6) An asset with no physical form, but that has special rights to current and expected future benefits<br />
is a(n)<br />
intangible asset.<br />
natural resource.<br />
plant asset.<br />
fixed asset.<br />
Question 2. Question :
(TCO 6) The process of depreciating an asset over its useful life is an application of the _____ principle.<br />
full disclosure<br />
revenue recognition<br />
historical cost<br />
matching<br />
Question 3. Question :<br />
(TCO 6) All of the following are classified as natural resources and are depleted except for<br />
land.<br />
timber.<br />
minerals.<br />
oil.<br />
Question 4. Question :<br />
(TCO 6) When an investor owns between 20% and 50% of the outstanding stock of another company, the<br />
_____ method is used to account for stock investments.<br />
market value<br />
equity<br />
consolidated<br />
historical cost.<br />
Question 5. Question :<br />
(TCO 6) Which of the following is not necessary to know in computing the future value of an annuity?<br />
Amount of the initial payment<br />
Interest rate<br />
Length of time between investment and payment<br />
Year the payments begin
Question 6. Question :<br />
(TCO 6) All of the following are reported as current liabilities except<br />
bonds payable.<br />
sales tax payable.<br />
accounts payable.<br />
unearned revenues.<br />
Question 7. Question :<br />
(TCO 6) Failure to record an accrued liability causes a company to<br />
overstate income.<br />
overstate assets.<br />
understate liabilities.<br />
understate owners’ equity.<br />
Question 8. Question :<br />
(TCO 6) If the market interest rate is greater than the stated interest rate, bonds will sell<br />
at face value.<br />
at a discount. at a premium.<br />
at market value.<br />
Question 9. Question :<br />
(TCO 6) Bonds that mature at a single specified future date are called<br />
term bonds.<br />
coupon bonds.<br />
serial bonds.<br />
debentures.<br />
Question 10. Question :
(TCO 6) The financing option that has the lowest risk to a company is financing by<br />
retained earnings.<br />
issuing stock.<br />
issuing bonds payable.<br />
issuing notes payable.<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 6 Discussion 1<br />
When forming a company, the options are sole proprietor, partnership, and corporation. Most choose<br />
corporation. Why is the corporate form seen to be best? What rights do the stockholders have?<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 6 Discussion 2<br />
Let’s start with gaining an understanding of the Statement of Cash Flows. From Exercise 12-17A, select<br />
one of the journal entries and explain how the accounts in the journal entry impact the statement of cash<br />
flows.<br />
Acct <strong>212</strong> DeVry Week 6 Checkpoint<br />
Question 1:<br />
(TCO 7) The authority structure of a corporation would show the<br />
board of directors delegating to the stockholders.<br />
president delegating to the board of directors.<br />
chief financial officer delegating to the board of directors.<br />
stockholders delegating to the board of directors.<br />
Question 2. Question :<br />
(TCO 7) The basic unit of ownership for a corporation is<br />
dividends.<br />
stock.<br />
retained earnings.<br />
capital.
Question 3. Question :<br />
(TCO 7) The price that the stockholder pays to acquire stock from the corporation is the<br />
Par price.<br />
Authorized price.<br />
Offering price.<br />
issue price.<br />
Question 4. Question :<br />
(TCO 7) Stock that a corporation purchases from shareholders is called<br />
treasury stock.<br />
authorized stock.<br />
issued stock.<br />
outstanding stock.<br />
Question 5. Question :<br />
(TCO 7) The authority to declare a dividend lies with the<br />
CFO.<br />
Shareholders.<br />
SEC.<br />
Board of Directors.<br />
Question 6. Question :<br />
(TCO 7) If stock is issued for an asset other than cash, the asset should be recorded on the books of the<br />
corporation at<br />
fair market value.<br />
cost.<br />
par value of the stock.
zero.<br />
Question 7. Question : (TCO 1) The main purpose of the statement of cash flows is to<br />
provide information about the cash receipts and cash payments during a period.<br />
provide information about the investing and financing activities during a period.<br />
prove that revenues exceed expenses if there is a net income.<br />
assist banking relationships.<br />
Question 8. Question : (TCO 1) The best gauge of a company’s ability to produce ample cash to continue<br />
as a going concern is net cash provided by<br />
operating activities.<br />
investing activities.<br />
financing activities.<br />
analytical activities<br />
Question 9. Question : (TCO 1) Which of the three types of activities reported on the statement of cash<br />
flows is the most critical?<br />
Investing activities<br />
Operating activities<br />
Financing activities<br />
Investing and financing activities<br />
Question 10. Question : (TCO 1) Usually, the most important category on the statement of cash flows is<br />
cash flows from<br />
operating activities.<br />
investing activities.<br />
financing activities.<br />
noncash activities.<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 7 Discussion 1
If you were to get a physical from your doctor and he or she only took your blood pressure prior to stating<br />
that you are in good health, would you be concerned? If you have noticed in your readings, starting in<br />
Chapter 3, there has been explanation of the methods by which you could determine the financial health<br />
of a company. Name one and explain how it is computed. Which financial statement(s) does the input<br />
come from? Most importantly, what does it tell you about the financial performance or health?<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 7 Discussion 2<br />
Let’s start with Exercise 13-19A by preparing a common-size income statement for the McMahon Music<br />
Co. Do this in Excel. Do not post your spreadsheet in the discussion, but rather, place a screenshot of it.<br />
How did you format the cells? Any suggestions on where to obtain assistance with building the<br />
spreadsheet?<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 7 Course Project 2 McDonough Products<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 7 Checkpoint<br />
Question 1:<br />
(TCO 1) The primary focus of horizontal analysis is<br />
Percentage changes in comparative financial statements.<br />
the balance sheet only.<br />
the changes in individual financial statement amounts as a percentage of some related total.<br />
the change in key financial statement ratios over a certain time frame.<br />
Question 2. Question :<br />
(TCO 1) Horizontal analysis of financial statements is an<br />
analysis tool.<br />
analysis theory<br />
analysis principle.<br />
analysis requirement.<br />
Question 3. Question :<br />
(TCO 1) A vertical analysis is primarily concerned with
the dollar amount of the change in various financial statement amounts from year to year.<br />
individual financial statement items expressed as a percentage of a base (which represents 100%).<br />
percentage changes in the balances shown in comparative financial statements.<br />
the change in key financial statement ratios over a specified period of time.<br />
Question 4. Question :<br />
(TCO 1) Common-size analysis is also known as<br />
trend analysis.<br />
ratio analysis.<br />
vertical analysis.<br />
matrix analysis.<br />
Question 5. Question : (TCO 1) On a common-size balance sheet each item is expressed as a<br />
percentage of<br />
current assets.<br />
operating income.<br />
total assets.<br />
net income.<br />
Question 6. Question :<br />
(TCO 1) Benchmarking financial statements represents a form of<br />
horizontal analysis.<br />
vertical analysis.<br />
gross profit analysis.<br />
trend analysis.<br />
Question 7. Question :<br />
(TCO 1) On a statement of cash flows of a struggling company, net income would ordinarily be
less than depreciation expense.<br />
more than depreciation expense.<br />
greater than cash provided by operating activities.<br />
more than cash provided by operating activities.<br />
Question 8. Question :<br />
(TCO 1) On a statement of cash flows, an increase or decrease in inventory is considered<br />
an operating activity.<br />
an investing activity.<br />
a financing activity.<br />
an investing or financing activity.<br />
Question 9. Question : (TCO 1) The ratio that measures the number of times that operating income can<br />
cover interest expense is the<br />
leverage.<br />
rate of return on total assets.<br />
debt ratio.<br />
Times-interest-earned ratio.<br />
Question 10. Question :<br />
(TCO 1) If economic value added (EVA) is negative<br />
Stockholders’ wealth has decreased.<br />
Stockholders’ wealth has increased.<br />
Stockholders’ wealth has stayed the same.<br />
Stockholders’ earnings per share have increased.<br />
<strong>ACCT</strong> <strong>212</strong> DeVry Week 8 Final Exam 100% Correct Answers
(TCO 1) To evaluate the financial operation and health of a business ratio analysis is used. (1) Provide<br />
the formula for the Acid-test (or Quick) Ratio and explain how it is computed (10 points) and (2) provide<br />
an example of how this ratio can be used in decision-making in business.<br />
(TCO 3) At the end of the period it is necessary to close all temporary accounts. (1) Explain why this<br />
process is required (10 points) and (2) provide an example of the closing of an expense account,<br />
Supplies Expense in the form of a journal entry<br />
(TCO 2) As required to complete Course Project 1, one must follow the cycle that includes 10 steps to<br />
complete the accounting cycle. (1) Explain how to construct an Unadjusted Trial Balance (10 points) and<br />
(2) provide an example of the application of the debit/credit rules in the development of the trial balance.<br />
(TCO 5) Internal Control Procedures are required to safeguard company assets and to ensure ethical<br />
operation of the business. (1) Explain how limited access can satisfy the purpose of internal control (10<br />
points) and (2) provide an example of how this control could be implemented.<br />
(TCO 4) Inventory valuation methods determine the cost of goods sold and the inventory balance. (1)<br />
Explain how the Last in First out (LIFO) method is applied (10 points) and (2) provide an example of the<br />
impact that this method of inventory valuation will have on Gross Profit.<br />
(TCO 6) BagODonuts Company bought a used delivery truck on January 1, 2010, for $19,200. The van<br />
was expected to remain in service 4 years (30,000 miles). BagODonuts’ accountant estimated that the<br />
truck’s residual value would be $2,400 at the end of its useful life. The truck traveled 8,000 miles the first<br />
year, 8,500 miles the second year, 5,500 miles the third year, and 8,000 miles in the fourth year.<br />
1. Calculate depreciation expense for the truck for each year (2010-2013) using the:<br />
a. Straight-line method.<br />
b. Double-declining balance method.<br />
c. Units of Production method.<br />
(For units-of-production and double-declining balance, round to the nearest two decimals after each step<br />
of the calculation.)<br />
2. Which method best tracks the wear and tear on the van?<br />
3. Which method would BagODonuts prefer to use for income tax purposes? Explain in detail why<br />
BagODonuts prefers this method.
(TCO 7) ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital<br />
stock:<br />
Preferred Stock: 7%, par value $100 per share, 100,000 shares.<br />
Common Stock: $1 par value, 500,000 shares.<br />
The following transactions occurred during the year:<br />
1/19/12 – Issued 100,000 shares of common stock for $17 cash per share.<br />
1/31/12 – Issued 3,000 shares of preferred stock for $115 cash per share.<br />
11/1/12 – Repurchased 30,000 shares of common stock for $22 cash per share.<br />
12/1/12 – Declared and paid a total dividend of $95,000.<br />
Required:<br />
1. Prepare the journal entry for each transaction listed above.<br />
2. In your own words, explain the main differences between common and preferred stock.<br />
(Points : 25)<br />
(TCO 5) Fraud is an intentional misrepresentation of facts, made for the purpose of persuading another<br />
party to act in a way that causes injury or damage to that party. In our readings and discussions we have<br />
seen several examples of fraud in business. Using that experience (1) provide an example of a common<br />
fraudulent practice in business with an explanation of how the practice works and (2) name and describe<br />
each of the elements of the Fraud Triangle.<br />
(TCO 5) Internal Control Procedures are in place to protect the assets of every business as mentioned in<br />
the textbook and our discussions. Of the seven internal control procedures, list five of these controls and<br />
describe how each procedure is implemented. (5 points each with 2 points for listing and 3 points for a<br />
description)<br />
(TCO 2) Below are the accounts of Super Pool Service, Inc. The accounts have normal balances on June<br />
30, 2012. The accounts are listed in no particular order.<br />
Account<br />
Balance<br />
Common stock $5,100<br />
Accounts payable $4,400
Service revenue $17,100<br />
Land $28,800<br />
Note payable $9,500<br />
Cash $5,200<br />
Dividends $6,100<br />
Utilities expense $2,100<br />
Accounts receivable $10,600<br />
Delivery expense $700<br />
Retained earnings $25,600<br />
Salary expense $8,200<br />
Prepare the company’s trial balance as of June 30, 2012, listing accounts in proper sequence, as<br />
illustrated in the chapter. For example, Accounts Receivable comes before Land. List the expense with<br />
the largest balance first, the expense with the next largest balance second, and so on.<br />
(TCO4) Linda’s Lampshades started business on Jan. 1, 2001. They had the following inventory<br />
transactions:<br />
Journals – Jan. 2001<br />
Purchases<br />
Supplier Date Received Quantity Unit Cost Amount<br />
Donna 01/10/01 110 12.00 1320.00<br />
Thomas 01/15/01 160 14.00 2240.00<br />
Cindy 01/18/01 150 15.00 2250.00<br />
Sales<br />
Customer Date shipped Quantity Sel. Price Amount<br />
Norilene 01/16/01 200 25.00 5000.00<br />
1. Calculate the ending inventory, using the perpetual inventory method:
A. Using FIFO<br />
B. Using LIFO<br />
C. Using Average Cost<br />
2. Prepare the following statement<br />
Using<br />
FIFO LIFO Average Cost<br />
Sales<br />
Cost of Sales<br />
Gross Profit<br />
(Points : 25)