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ACC 291 Final Exam
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1. An aging of a company's accounts receivable
indicates that $4,500 are estimated to be
uncollectible. If Allowance for Doubtful Accounts
has a $1,200 credit balance, the adjustment to
record bad debts for the period will require a
debit to Bad Debt Expense for $4,500.
debit to Bad Debt Expense for $3,300.

credit to Allowance for Doubtful Accounts for
$4,500.
debit to Allowance for Doubtful Accounts for
$3,300.
2. On January 1, a machine with a useful life of five
years and a residual value of $40,000 was
purchased for $120,000. What is the
depreciation expense for year 2 under the
double-declining-balance method of
depreciation?
$38,400.
$48,000.
$23,040.
$28,800.
3. Jahnke Corporation issued 8,000 shares of €2
par value ordinary shares for €11 per share. The
journal entry to record the sale will include
a credit to Share Capital–Ordinary for €88,000.

a debit to Retained Earnings for €72,000.
a debit to Cash for €16,000.
a credit to Share Premium–Ordinary for
€72,000.
4. Colie Company had an increase in inventory of
$120,000. The cost of goods sold was $490,000.
There was a $30,000 decrease in accounts
payable from the prior period. Using the direct
method of reporting cash flows from operating
activities, what were Colie's cash payments to
suppliers?
$580,000.
$370,000.
$310,000.
$640,000.
5. Each of the following items may be classified as
operating or financing activities under IFRS
except

dividends paid.
dividends received.
interest paid.
all of these answer choices may be classified as
such.
6. Which of the following is not an internal control
activity for cash?
The number of persons who have access to
cash should be limited.
The functions of record keeping and maintaining
custody of cash should be combined.
Surprise audits of cash on hand should be made
occasionally.
All cash receipts should be recorded promptly.
7. Mitchell Corporation bought equipment on
January 1, 2014 .The equipment cost $180,000
and had an expected salvage value of $30,000.
The life of the equipment was estimated to be 6

years. The book value of the equipment at the
beginning of the third year would be
$50,000.
$180,000.
$150,000.
$130,000.
8. Brevard Corporation purchased a taxicab on
January 1, 2013 for $25,500 to use for its shuttle
business. The cab is expected to have a fiveyear
useful life and no salvage value. During
2014, it retouched the cab's paint at a cost of
$1,200, replaced the transmission for $3,000
(which extended its life by an additional 2 years),
and tuned-up the motor for $150. If Brevard
Corporation uses straight-line depreciation, what
annual depreciation will Brevard report for 2014?
$4,100.
$5,100.
$4,125.

$3,900.
9. On July 1, 2014, Linden Company purchased
the copyright to Norman Computer Tutorials for
$140,000. It is estimated that the copyright will
have a useful life of 5 years. The amount of
Amortization Expense recognized for the year
2014 would be
$14,000.
$25,900.
$28,000.
$13,125.
10. Thayer Company purchased a building on
January 2 by signing a long-term $2,520,000
mortgage with monthly payments of $23,100.
The mortgage carries an interest rate of 10

percent. The amount owed on the mortgage
after the first payment will be
$2,499,000.
$2,496,900.
$2,520,000.
$2,517,900.
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