Acct 475 Midterm

In: Business and Management

Submitted By CharleneLi
Words 2538
Pages 11
MCGILL UNIVERSITY

Desautels Faculty of Management

MID-TERM EXAMINATION

| | | STUDENT NAME | | STUDENT NUMBER |

PRINCIPLES OF AUDITING
ACCT 475-001

LECTURER: | Ralph Cecere, CPA, CA | | DATE:TIME: | Tuesday, February 25, 20142.5 Hours | | | | | |

INSTRUCTIONS:

0 This is a CLOSED BOOK examination. 1 ONLY TRANSLATION dictionaries are PERMITTED. 2 Noiseless non-programmable calculators are PERMITTED. 3 READ BOTH THE QUESTIONS & EACH REQUIRED CAREFULLY. 4 You are encouraged to use POINT form in your responses. 5 This examination consists of 6 questions on a total of 9 pages including this cover page. Please ensure that you have a complete examination paper before starting. 6 The words 'End of Exam' appear on the last page.

Question 1. (15 Marks)

You are a manager in the audit firm of Smith and Jones and you have been appointed as a new team member to the audit of a jewellery shop named Wise Ltd. (WL).

WL is a family run business and has passed successfully into the third generation. They are the number one seller of engagement rings in Canada and have a reputation for premium products and ethically traded diamonds.

You have been asked to start the audit plan for WL by Tom Brown, a partner in Smith and Jones. Tom Brown has been the audit partner on this audit for the last 15 years. It holds sentimental value for him as this is where he bought his wife Daisy's engagement ring back in 1972. You learn that Fred Ahern, your colleague, has already been a member of the audit team for the last four years and you recall Fred mentioning that he got a great deal on an engagement ring for his fiancé Meg from WL last Valentine's day. The ring had a retail price of$15,000 but he due to his relationship with William White, the owner of WL only paid $5,000 for the ring.

You are looking forward to…...

Similar Documents

Acct 210 Midterm

...Acct 210 Midterm 1. List 3 different users (stakeholders) of financial statement information. Shareholders Investors Government Agencies 2. Describe the main difference between Financial Accounting and Managerial Accounting.  Reports to those outside the organization: 1. Owners 2. Lenders 3. Tax Authorities 4. Regulators  Emphasize financial consequences of past activities  Emphasize objectivity and verifiability  Emphasizes precision  Emphasize summary data concerning the entire organization  Must follow GAAP  Mandatory for external reports Managerial Accounting:  Reports to those inside the organization for: a) Planning b) Directing and motivating c) Controlling d) Performance Evaluation  Emphasize the decision affecting the future  Emphasize relevance  Emphasize the timeliness  Emphasize detailed segment reports about departments, products, customers and employees.  Need not follow GAAP  Not mandatory 3. True or False - Accounting is not important to not-for-profit organizations. F 4. What does GAAP stand for? What is it? Generally accepted accounting principles (GAAP) refer to the standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as accounting standards or standard accounting practice. These include the standards, conventions, and rules that accountants follow in recording and summarizing and in the preparation of financial......

Words: 2604 - Pages: 11

Acct 434 Midterm Exam

...ACCT 434 Midterm Exam http://homeworkmonster.com/downloads/acct-434-midterm-exam/ ACCT 434 Midterm Exam (TCO 1) For each of the following drivers identify an appropriate activity. a. # of machines b. # of setups c. # of inspections d. # of orders e. # of runs f. # of bins or aisles g. # of engineers (TCO 2) Favata Company has the following information: Month Budgeted Sales June $60,000 July 51,000 August 40,000 September 70,000 October 72,000 In addition, the cost of goods sold rate is 70% and the desired inventory level is 30% of next month’s cost of sales. Prepare a purchases budget for July through September. (TCO 1) Merriamn Company provides the following ABC costing information: (TCO 2) A master budget (TCO 2) Dalyrymple Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is $80,000. The budgeted number of nozzles to be inserted is 40,000. What is the budgeted indirect cost allocation rate for this activity? (TCO 3) Which cost estimation method analyzes accounts in the subsidiary ledger as variable, fixed, or mixed using qualitative methods? (TCO 4) In evaluating different alternatives, it is useful to concentrate on (TCO 5) The theory of constraints is used for cost analysis when (TCO 5) Schmidt Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows: Direct materials......

Words: 531 - Pages: 3

Acct 567 Midterm

...ACCT 567 Midterm http://homeworktimes.com/downloads/acct-567-midterm/ (TCOs A and B) Fiduciary funds are to use which of the following measurement and basis of accounting?   (TCOs A and B) Funds other than the General Fund are required to be considered to be a major fund when   (TCOs A and B) Which of the following is most correct with regard to Management’s Discussion and Analysis?   (TCOs B and C) Governmental Fund Balance is required to be displayed in which of the categories?   (TCOs B and C) The proper journal entry to record an encumbrance would include which of the following? (TCOs B and C)) Capital assets that are used by an enterprise fund should be accounted for in the following fund? (TCO E) King City receives a trust donation for the purpose of maintaining flower in city parks, but the donor does not make a specification as to how the principal must be maintained. This type of trust should be appropriately accounted for which of the following fund? (TCO E) Which fund type is the interest on Long Term Debt typically not accrued; however, it is recognized as an expenditure in the year in which interest is legally due? (TCO E) Which of the following funds or activities general journals would it be inappropriate to record depreciation of capital assets? TCO D) Under GASB Statement No. 33, when would a special revenue fund be considered to have satisfied the eligibility requirement of a reimbursement type federal grant? (TCO E) You are in a staff meeting......

Words: 609 - Pages: 3

Acct 212 Midterm Exam

...ACCT 212 Midterm Exam Solution 100% Correct Answers To Buy this Class Copy & paste below link in your Brower http://homeworklance.com/downloads/acct-212-midterm-exam-solution-100-correct-answers/ Or Visit Our Website Visit : http://homeworklance.com Email Us : lancehomework@gmail.com ACCT 212 Midterm Exam Solution 100% Correct Answers (TCO 1) The Accounting Equation is used to develop the organizations financial reports. (1) Describe what liabilities are (10 points) and (2) provide an example of a liability account. (10 points) (TCO 1) The financial statements present a company to the public in financial terms. (1) Which financial statement identifies how well the company performed during the year (10 points) and (2) explain what information this financial statement provides. (10 points) (TCO 1) The accounting profession follows a set of guidelines for measurement and disclosure of financial information called the Generally Accepted Accounting Principles (GAAP). (1) Explain what the Entity Assumption is (10 points) and (2) provide an example of its application. (10 points) (TCO 2) Transaction analysis results in the development of a journal entry. A building is purchased for $35,000. (1) Name the accounts impacted and how using the format account name/debit or credit/dollar amount (10 points) and (2) explain how the Accounting Equation is impacted. (10 points) (TCO 3) Adjusting Entries are required at the end of the period to ensure that accrual...

Words: 419 - Pages: 2

Acct 301 Midterm Exam

...ACCT 301 Midterm Exam 100% Correct Answers To Buy this Class Copy & paste below link in your Brower http://homeworklance.com/downloads/acct-301-midterm-exam-100-correct-answers/ Or Visit Our Website Visit : http://homeworklance.com Email Us : lancehomework@gmail.com ACCT 301 Midterm Exam 100% Correct Answers (TCO 1) Which pair of accounts follows the rules of debit and credit, in relation to increases and decreases, in the same manner? (TCO 2) Which of the following is not part of the recording process? (TCO 3) Two individuals at a retail store work the same cash register. You evaluate this situation as which of the following? (TCO 4) The retained earnings statement shows all of the following except which one? (TCO 5) In the annual report, where would a financial statement reader find out if the company’s financial statements give a fair depiction of its financial position and operating results? (TCO 6) Using the following balance sheet and income statement data, what is the earnings per share? (TCO 4) A useful measure of solvency is which of the following? (TCO 11) Managerial accounting does which of the following? (TCO 11) Which one of the following is not a direct material? (TCO 11) Which of the following are period costs? (TCO 11) Ranger Company reported total manufacturing costs of $65,000, manufacturing overhead totaling $13,000, and direct materials totaling $16,000. How much is direct labor cost? (TCO 11)......

Words: 646 - Pages: 3

Acct 346 Midterm Exam

...ACCT 346 Midterm Exam Solution 100% Correct Answers To Buy this Class Copy & paste below link in your Brower http://homeworklance.com/downloads/acct-346-midterm-exam-solution-100-correct-answers/ Or Visit Our Website Visit : http://homeworklance.com Email Us : lancehomework@gmail.com ACCT 346 Midterm Exam Solution 100% Correct Answers (TCO 1) Managerial accounting stresses accounting concepts and procedures that are relevant to preparing reports for (TCO 1) Which of the following costs does not change when the level of business activity changes? (TCO 1) You own a car and are trying to decide whether or not to trade it in and buy a new car. Which of the following costs is an opportunity cost in this situation? (TCO 1) Shula’s 347 Grill has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: materials, $4,080; hourly labor (variable), $5,200; rent (fixed), $1,700; depreciation, $800; and other fixed costs, $600. Each steak dinner sells for $14.00 each. What is the budgeted fixed cost per unit? (TCO 1) Which of the following costs is not part of manufacturing overhead? (TCO 1) Product costs (A) are also called manufacturing costs (B) are considered an asset until the finished goods are sold. (c) become an expense when the goods are sold. (d) All of the above answers are correct. (TCO 1) Red Runner’s Work in Process Inventory account has a beginning balance of $50,000 and an ending balance......

Words: 589 - Pages: 3

Acct 550 Midterm Exam

...ACCT 550 Midterm Exam 100% Correct Answers To Buy this Class Copy & paste below link in your Brower http://homeworklance.com/downloads/acct-550-midterm-exam-100-correct-answers/ Or Visit Our Website Visit : http://homeworklance.com Email Us : lancehomework@gmail.com ACCT 550 Midterm Exam 100% Correct Answers (TCO A) The quality of information that gives assurance that is reasonably free of error and bias and is complete is TCO A) Issuance of common stock for cash affects which basic element of financial statements? (TCO B) Retained earnings at 1/1/1X was $150,000 and at 12/31/1X it was $200,000. During 2010, cash dividends of $50,000 were paid and a stock dividend of $30,000 was issued. Both dividends were properly charged to retained earnings. You are to provide the missing closing entry. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment. (TCO D) The balance sheet contributes to financial reporting by providing a basis for all of the following except (TCO A) The cash method of accounting (TCO A) Which of the following is an ingredient of relevance? TCO A) Information is neutral if it (TCO A) Which of the following is not a basic element of financial statements? (TCO A) Issuance of common stock for cash affects which basic element of financial statements? (TCO A) What is the quality of information that enables users to......

Words: 1008 - Pages: 5

Acct 551 Midterm Exam

...ACCT 551 Midterm Exam http://www.homeworkwarehouse.com/downloads/acct-551-midterm-exam/ ACCT 551 Midterm Exam 1. Question:: (TCO C) The cost of an intangible asset includes all of the following except 2. Question: : (TCO C) Which of the following is not an intangible asset? 3. Question: : (TCO C) The intangible asset goodwill may be 4. Question: : (TCO C) ELO Corporation purchased a patent for $90,000 on September 1, 2008. It had a useful life of ten years. On March 1, 2010, ELO spent $17,500 to successfully defend the patent in a lawsuit. ELO feels that as of that date, the remaining useful life is five years. What amount should be reported for patent amortization expense for 2010? 5. Question: : (TCO C) Floyd Company purchases Haeger Company for $800,000 cash on January 1, 2011. The book value of Haeger Company’s net assets, as reflected on its December 31, 2010 balance sheet, is $620,000. An analysis by Floyd on December 31, 2010 indicates that the fair value of Haeger’s tangible assets exceeded the book value by $60,000, and the fair value of identifiable intangible assets was equal to book value. How much goodwill should be recognized by Floyd Company when recording the purchase of Haeger Company? 6. Question: : (TCO D) An employee’s net (or take-home) pay is determined by gross earnings minus amounts for income tax withholdings and the employee’s 7. Question: : (TCO D) Assume that a manufacturing corporation has (1) good quality control, (2) a one-year......

Words: 1148 - Pages: 5

Acct 504 Midterm Solution

...ACCT 504 Midterm Solution http://www.homework-bank.com/downloads/acct-504-midterm-solution/ ACCT 504 Midterm Solution 1. Question: (TCO A, B, C) Which of the following statements concerning users of accounting information is incorrect? 2. Question: (TCO C) Issuing shares of stock in exchange for cash is an example of a(n): 3. Question: (TCO C) Which activities involve putting the resources of the business into action to generate a profit? 4. Question: (TCO A) The cost of assets consumed or services used is also known as: 5. Question: (TCO C) Edwards Company recorded the following cash transactions for the year: 6. Question: (TCO A) On a classified balance sheet, prepaid insurance is classified as: 7. Question: (TCO A) An intangible asset: 8. Question: (TCO A) These are selected account balances on December 31, 2007. -Land (location of the corporation’s office building) $200,000 -Land (held for future use) 300,000 -Corporate Office Building 1,200,000 -Inventory 400,000 -Equipment 900,000 -Office Furniture 200,000 -Accumulated Depreciation 600,000 What is the total NET amount of property, plant, and equipment that will appear on the balance sheet? 9. Question: (TCO B) For 2010, Landford Corporation reported net income of $30,000; net sales $400,000; and average share outstanding 6,000. There were no preferred stock dividends. What was the 2010 earnings per share? 10. Question: (TCO B) Liondale Corporation had beginning retained earnings of $2,292,000 and......

Words: 980 - Pages: 4

Acct 346 Midterm Exam

...ACCT 346 Midterm Exam http://www.tutoriallance.com/shop/uncategorized/acct-346-midterm-exam/ For any inquiry email us: Tutoriallance@gmail.com Visit Website For More Tutorials : http://www.tutoriallance.com/ (TCO 1) Managerial accounting stresses accounting concepts and procedures that are relevant to preparing reports for (TCO 1) Which of the following costs does not change when the level of business activity changes? (TCO 1) You own a car and are trying to decide whether or not to trade it in and buy a new car. Which of the following costs is an opportunity cost in this situation? (TCO 1) Shula’s 347 Grill has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: materials, $4,080; hourly labor (variable), $5,200; rent (fixed), $1,700; depreciation, $800; and other fixed costs, $600. Each steak dinner sells for $14.00 each. What is the budgeted fixed cost per unit? (TCO 1) Which of the following costs is not part of manufacturing overhead? (TCO 1) Product costs (A) are also called manufacturing costs (B) are considered an asset until the finished goods are sold. (c) become an expense when the goods are sold. (d) All of the above answers are correct. (TCO 1) Red Runner’s Work in Process Inventory account has a beginning balance of $50,000 and an ending balance of $40,000. Direct materials used are $70,000 and direct labor used totals $35,000. Cost of goods sold totals $135,000. Manufacturing...

Words: 571 - Pages: 3

Acct 551 Midterm Exam

...ACCT 551 Midterm Exam http://www.homeworkwarehouse.com/downloads/acct-551-midterm-exam/ ACCT 551 Midterm Exam 1. Question:: (TCO C) The cost of an intangible asset includes all of the following except 2. Question: : (TCO C) Which of the following is not an intangible asset? 3. Question: : (TCO C) The intangible asset goodwill may be 4. Question: : (TCO C) ELO Corporation purchased a patent for $90,000 on September 1, 2008. It had a useful life of ten years. On March 1, 2010, ELO spent $17,500 to successfully defend the patent in a lawsuit. ELO feels that as of that date, the remaining useful life is five years. What amount should be reported for patent amortization expense for 2010? 5. Question: : (TCO C) Floyd Company purchases Haeger Company for $800,000 cash on January 1, 2011. The book value of Haeger Company’s net assets, as reflected on its December 31, 2010 balance sheet, is $620,000. An analysis by Floyd on December 31, 2010 indicates that the fair value of Haeger’s tangible assets exceeded the book value by $60,000, and the fair value of identifiable intangible assets was equal to book value. How much goodwill should be recognized by Floyd Company when recording the purchase of Haeger Company? 6. Question: : (TCO D) An employee’s net (or take-home) pay is determined by gross earnings minus amounts for income tax withholdings and the employee’s 7. Question: : (TCO D) Assume that a manufacturing corporation has (1) good quality control, (2) a one-year......

Words: 1148 - Pages: 5

Acct 301 Midterm Exam

...ACCT 301 Midterm Exam Click Link Below To Buy: http://hwaid.com/shop/acct-301-midterm-exam/ Midterm Exam 1 1. (TCO 1) Suppose your company sold $25,000 in merchandise to a customer for cash. How does this transaction impact the accounting equation? 2. (TCO 2) Suppose your company sold $50,000 in merchandise to a customer for cash. How does this transaction impact the accounting equation? 3. (TCO 3) Rationalization is one of the components of the fraud triangle. What types of rationalization could a person use to justify misconduct? How can a company protect itself from rationalization as a part of fraud? 4. (TCO 4) What is horizontal analysis of financial statements? How does horizontal analysis differ from vertical analysis? 5. (TCO 3) Separation of duties is a key feature in an internal control system. Why is separation of duties such an important internal control? Give an example of separation of duties as an internal control. 6. (TCO 1) Describe the balance sheet. Why is this statement important to the company, creditors, and investors? 7. (TCO 4) Name and describe one liquidity ratio. What does this ratio measure? What is the formula for this ratio? ACCT 301 Midterm Exam 2 1. (TCO 1) The retained earnings statement shows all of the following except which one? 2. (TCO 1) Management’s views on the company’s short-term debt paying ability, expansion financing, and results of operations are found in which of the following? 3. (TCO 4) For 2010...

Words: 761 - Pages: 4

Acct 504 Midterm 2016

...ACCT 504 Midterm 2016 Click Link Below To Buy: http://hwcampus.com/shop/acct-504-midterm-2016/ Question : (TCOs A, B, and C) Shareholders want answers to all of the following questions except: How does the company compare in profitability with competitors? Did the company meet its operating expense budget? Will the company be able to pay its liabilities as they come due? Is the company earning a satisfactory return? Points Received: 3 of 3 Comments: Question 2. Question : (TCO C) Paying cash dividends is an example of a(n) operating activity. investing activity. financing activity. non-cash financing activity. Instructor Explanation: Chapter 1 Points Received: 0 of 3 Comments: Question 3. Question : (TCO C) Buying a new plant would be an example of which type of activity? Operating Financing Investing None of the above Instructor Explanation: Chapter 1 Points Received: 3 of 3 Comments: Question 4. Question : (TCO A) Which of the following should not be classified as a current liability? Accounts Payable A note payable due in 15 months Income Tax Payable Unearned Revenue Instructor Explanation: Chapter 3 Points Received: 0 of 3 Comments: Question 5. Question : (TCO B) For 2012, LBJ Corporation reported net income of $75,000; net sales $750,000; and weighted average shares outstanding of 7,500. There were no preferred stock dividends. What was the 2012 earnings per share? $100.00 $50.00 $10.00 $110.00 Instructor Explanation:......

Words: 884 - Pages: 4

Acct 555 Midterm Exam

...ACCT 555 Midterm Exam To Buy This material Click below link http://www.uoptutors.com/acct-555/acct-555-midterm (TCO F) Which of the following procedures should an auditor generally perform regarding subsequent events? (TCO A) An auditor reads the letter of transmittal accompanying a county’s comprehensive annual financial report and identifies a material inconsistency with the financial statements. The auditor determines that the financial statements do not require revision. Which of the following actions should the auditor take? (TCO F) An auditor’s independence is considered impaired if the auditor has: (TCO B) When an independent CPA is associated with the financial statements of a publicly held entity but has not audited or reviewed such statements, the appropriate form of report to be issued must include a(an): (TCO F) Which is not a characteristic of the reliability of evidence? (TCO C) According to PCAOB standards, the nature and extent of required planning activities for an issuer audit are influenced by all of the following factors, except for: (TCO F) Analytical procedures must be used during which phase(s) of the audit? Test of controls OR planning OR completion (TCO F) In a financial statement audit, inherent risk is evaluated to help an auditor assess which of the following? (TCO F) The primary purpose of performing analytical procedures in the planning phase of an audit is to (TCO G) The most widely used profitability ratio is (TCO G) Which ratio......

Words: 1043 - Pages: 5

Acct 555 Midterm Exam

...ACCT 555 Midterm Exam To Buy This material Click below link http://www.uoptutors.com/acct-555/acct-555-midterm (TCO F) Which of the following procedures should an auditor generally perform regarding subsequent events? (TCO A) An auditor reads the letter of transmittal accompanying a county’s comprehensive annual financial report and identifies a material inconsistency with the financial statements. The auditor determines that the financial statements do not require revision. Which of the following actions should the auditor take? (TCO F) An auditor’s independence is considered impaired if the auditor has: (TCO B) When an independent CPA is associated with the financial statements of a publicly held entity but has not audited or reviewed such statements, the appropriate form of report to be issued must include a(an): (TCO F) Which is not a characteristic of the reliability of evidence? (TCO C) According to PCAOB standards, the nature and extent of required planning activities for an issuer audit are influenced by all of the following factors, except for: (TCO F) Analytical procedures must be used during which phase(s) of the audit? Test of controls OR planning OR completion (TCO F) In a financial statement audit, inherent risk is evaluated to help an auditor assess which of the following? (TCO F) The primary purpose of performing analytical procedures in the planning phase of an audit is to (TCO G) The most widely used profitability ratio is (TCO G) Which ratio......

Words: 1043 - Pages: 5