Accounting Competency Exam Sample Exam

9. Clemente Co. owned all of the voting common stock of Snider Co. On January 2, 2009, Clemente sold some equipment to Snider for $125,000. The equipment had cost $140,000. At the time of the sale, the balance in accumulated depreciation was $40,000. The equipment had a remaining useful life of five years and a $0 salvage value. Straight-line depreciation is used by both Clemente and Snider. At what amount should the equipment (net of depreciation) be included on the consolidated balance sheet dated December 31, 2009?

1. The Allowance for uncollectible accounts currently has a credit balance of $900. After analyzing the accounts in the accounts receivable subsidiary ledger, the company's management estimates that uncollectible accounts will be $15,000. What will be the amount of uncollectible accounts expense reported on the income statement?

f. The midpoint range for straight-line depreciation of transmission equipment is 22 years. The $771 million capitalized in the first quarter would be depreciated for a full year ($35,045,455). The $610 million in the second quarter would be depreciated for 9/12 of the year ($20,795,455). The $743 million

Assume that Franklin Company uses the following journals: Cash Receipts (CR), Cash Payments (CP), Revenue (R), Purchases (P), and General (G). Assume that it uses Accounts Receivable and Accounts Payable Subsidiary Ledgers as well as a General Ledger. Indicate by letters which journal would be used for each transaction. Also indicate if the entry requires a posting to a subsidiary ledger.

Financial statements are commonly called balance sheets, income statement, statement of owner’s equity, or statement of cash flows.

Disagree. The statement of cash flows is required. It is the fourth basic financial statement.

| |financial statements related to cash and cash equivalents, receivables, and inventories. | | |

6. Governmental accounting and reporting with direct impact on entities ability to collect financial information accurately,

1) Which one of the following items is not generally used in preparing a statement of cash flows?

5. Machinery was acquired at the beginning of the year. Depreciation recorded during the life of the machinery could result in (Page 1002)

What correcting entry should you prepare? 54 A. Office Expense Accounts Payable 54 54 B. Accounts Payable Office Expense 54 28 C. Accounts Payable Office Expense 28 D. No entry is needed

A. accounting functions must be performed by an "outsider" (rather than by an employee of the business) in order to avoid conflicts of interest

Accounting  Financial Accounting  General Ledger  Master Records  G/L Accounts  Individual Processing  Centrally

These characteristics can enhance relevant and faithfully represented financial information. Comparability can help users find similarities and differences among events and conditions. Verifiability implies a consensus among different measurers. Timeliness is very important, if information is timely, it can help users to make a decision as soon as possible. Understandability is used to measure whether the financial information is categorized and presented in a clarified and concise way for users to understand easily. (IASB 2010)

b. Trace the line item “Balance per Bank Statement” – Accuracy and Existence (AU-C 315.A114 a-iii, b-i)