ACCT 212 Week 8 Final Exam (Explanatory)

1. (TCO 3)At
the end of the period it is necessary to close all temporary accounts.
(1) Explain why this process is required (10 points) and (2) provide an
example of the closing of an expense account, Salary Expense in the form
of a journal entry. (10 points) (Points : 20)

2. (TCO 2)As
required to complete Course Project 1, one must follow the cycle that
includes 10 steps to complete the accounting cycle. (1) Explain how the
debit/credit rules are used when developing journal entries (10 points)
and (2) provide an example of the application of the debit/credit rules
in the form of a journal entry. (10 points)(Points : 20)

3. (TCO 5)Internal
Control Procedures are required to safeguard company assets and to
ensure ethical operation of the business. (1) Explain how limited access
can satisfy the purpose of internal control (10 points) and (2) provide
an example of how this control could be implemented. (10
points) (Points : 20)

4. (TCO 4)Inventory
valuation methods determine the cost of goods sold and the inventory
balance. (1) Explain how the First in First out (FIFO) method is applied
(10 points) and (2) provide an example of the impact that this method
of inventory valuation will have on Gross Profit. (10 points) (Points :
20)

5. (TCO 1)To
evaluate the financial operation and health of a business ratio
analysis is used. (1) Provide the formula for the Current Ratio and
explain how it is computed (10 points) and (2) provide an example of how
this ratio can be used in decision-making in business. (10
points) (Points : 20)

6. (TCO 6)BagODonuts
Company bought a used delivery truck on January 1, 2010, for $19,200.
The van was expected to remain in service 4 years (30,000 miles).
BagODonuts’ accountant estimated that the truck’s residual value would
be $2,400 at the end of its useful life. The truck traveled 8,000 miles
the first year, 8,500 miles the second year, 5,500 miles the third
year, and 8,000 miles in the fourth year…(Points : 25)

7. (TCO 7)ABC
Inc. was incorporated on 1/15/12. Their corporate charter authorized
the following capital stock: Preferred Stock: 7%, par value $100 per
share, 100,000 shares. Common Stock: $1 par value, 500,000
shares….(Points : 25)

8. (TCO 5)Fraud
is an intentional misrepresentation of facts, made for the purpose of
persuading another party to act in a way that causes injury or damage to
that party. In our readings and discussions we have seen several
examples of fraud in business. Using that experience (1) provide an
example of a common fraudulent practice in business with an explanation
of how the practice works and (2) name and describe each of the elements
of the Fraud Triangle.

9. (TCO 5)Internal
Control Procedures are in place to protect the assets of every business
as mentioned in the textbook and our discussions. Of the seven
internal control procedures, list five of these controls and describe
how each procedure is implemented (Points : 25)

10. (TCO2)Below
are the accounts of Super Pool Service, Inc. The accounts have normal
balances on June 30, 2012. The accounts are listed in no particular
order…(Points : 25)

11. (TCO4)Linda’s Lampshades started business on Jan. 1, 2001. They had the following inventory transactions :….(Points : 25)