Acc/291 Week 1

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Name:_______________ Part I Open-ended question (10 points; 20% of exam) ID:____________ For Quick Start the first month in business has ended. In the last days of December 2005, they already received contributed capital of € 6,000 and they obtained a five-year bank loan of € 24,000 at an annual rate of interest of 10 percent. Interest has to be paid each year on October 31. On December 31, 2005 various store equipment was purchased at a total cost of € 12,000, paid in cash. It is expected that the equipment has to be replaced after five years. Assume that the residual value is 0. On January 3 a store location was found and three months' rent was paid in advance, totalling € 3,300. Business operations began on January 3. Additional operating facts for January are as follows: New and second hand books were bought and paid, totaling € 3,200. Cash sales of € 4,000. In addition a second hand encyclopedia was sold for € 1,750 payment of which will not be received until May. In advance, cash…show more content…
21 T/?/F An absorption income statement would show a cost of goods sold of £ 64,000. 22 T/?/F The break-even point in units for March 2002 is 45,000 Stringmints. 23 T/?/F The cash budget is part of the financial budget. 24 T/?/F Publishing annual reports exclusively via the Internet increase information asymmetries between different investors. 25 A Dutch insurance company has recently introduced a touch-screen based system that helps car mechanics in solving engine related problems, by storing detailed knowledge about engines, failures and suggested solutions. 25 T/?/F This system is an example of an Executive Information System. 26 Dutch Real Estate agents often hire 3D experts to create enhanced graphical representations of buildings, based on the original drawings. This way the potential buyers can get a clear image of what the building is going to look like in real life. 26 T/?/F This is an example of a virtual

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