AY2324 Semester 1
ACC1701 Midterm Test Review
QUESTIONS ONLY
NOTE: This document contains selected questions from the Midterm Test. These are the questions that
many students did not perform well in. The teaching team is unable to extract and provide individual
feedback on your performance in the midterm test. As such, the purpose of releasing the selected questions
is to help highlight the areas that students are weak in. These questions will give a good indication of the
areas of improvements for the final exam. For the answers and solutions, please refer to the separate
“Midterm Review – Questions & Solutions” file on Canvas.
Questions#1 - #3 are related to EarthAware Company.
The Statement of Financial Position for EarthAware Company is presented below:
Additional information for EarthAware’s 2023 operations revealed that the company had revenues of
$97,000 for the year and $10,000 of dividends were also declared and paid. All sales and expenses incurred
during the year were made on credit.
Question #: 1
Based on the information given, what is EarthAware’s Accounts Receivable balance as at 31st December
2022?
A. 11,000
B. 8,600
C. 10,000
D. 19,600
AY2324S1 ACC1701 – Midterm Test Review – Questions Only
Page 1 of 8
Question #: 2
Based on the information given, how much is EarthAware’s expenses for the year of 2023?
A. 87,000
B. 94,300
C. 84,300
D. 89,700
Question #: 3
Based on the information given, how much cash did EarthAware receive in 2023 from its customers?
A. 98,400
B. 99,400
C. 108,000
D. 97,000
Questions #4 & #5 are related to NachoCheez Company.
On Dec 31, the balances in NachoCheez Company’s general ledger accounts resulted in the following totals:
Assets of $317,600, Liabilities of $223,400, and Equity of $100,500. The total assets do not equal total
liabilities plus equity. Upon further checking, the following errors were discovered:
(i) Supplies worth $1,200 was purchased but was not included in assets because it got debited to Supplies
Expense even though they were not consumed during the year.
(ii) In recording a credit Sales of $25,700, NachoCheez incorrectly credited $27,500 into the Sales Revenue
account. It debited the Accounts Receivable account correctly.
(iii) A new cheese equipment purchased on credit for $31,600 was incorrectly credited to the Payables
account as $36,100. It debited the PPE (Property, Plant &Equipment) account correctly.
(iv) Cash received in advance from customers in the amount of $3,400 was incorrectly credited into
Accounts Payable. It debited the cash account correctly.
Question #: 4
What is NachoCheez’s correct total liabilities balance?
A. 218,900
B. 215,500
C. 220,000
D. 224,500
AY2324S1 ACC1701 – Midterm Test Review – Questions Only
Page 2 of 8
Question #: 5
What is NachoCheez’s correct total equity balance?
A. 97,500
B. 98,700
C. 99,900
D. 103,300
Questions #6 – #8 are related to NachoCheez Company.
The following shows the trial balance of A-Games Corporation as at 31st May 2023.
In the month of June 2023, the following transactions occurred for A-Games.
(i) Sold inventory for $15,000, of which $5,000 was sold for cash and the remaining was sold on credit.
The inventory cost A-Games $8,000.
(ii) Purchased $18,000 worth of inventory on credit.
(iii) Hired a part time student for $600 in June. The student agreed to be paid in cash on July 3rd.
(iv) Paid interest on its debt in the amount of $350 in cash.
Question #: 6
The general journal entry made by A-Games to record the sales transaction in June (refer to transaction (i)
in the question) will include a:
A. Credit to Inventory for $8,000
B. Credit to Cost of Goods Sold for $10,000
C. Credit to Inventory for $15,000
D. Debit to Accounts Receivable for $15,000
AY2324S1 ACC1701 – Midterm Test Review – Questions Only
Page 3 of 8
Question #: 7
What is the Net Income of A-Games for the 6 months period ending June 30, 2023?
A. 50,900
B. 43,500
C. 42,900
D. 36,850
Question #: 8
What is the total amount of assets A-Games should report at June 30, 2023?
A. 391,900
B. 359,250
C. 383,900
D. 479,650
Question #: 9
The following information is available for GoldenSprint Inc. before closing the accounts:
Retained earnings
Sales Revenue
Unearned Revenue
Cost of Goods Sold
Salaries Expense
General Admin Expenses
Rent Expense
Prepaid Salaries
Expected Credit Loss
Dividends
25,000
100,000
6,500
76,000
21,000
11,000
8,000
7,500
2,000
2,500
The closing entry will include a:
A. Credit to Retained Earnings for $15,500
B. Credit to Retained Earnings for $20,500
C. Debit to Retained Earnings for $18,000
D. Debit to Retained Earnings for $20,500
AY2324S1 ACC1701 – Midterm Test Review – Questions Only
Page 4 of 8
Questions #10 & #11 are related to GoGurt Corporation.
GoGurt Corporation uses the allowance method of accounting for uncollectible accounts. The following
summary schedule was prepared from an aging of accounts receivable outstanding on December 31 of the
current year:
GoGurt Corporation
Schedule of Accounts Receivable by Age
Classifcation of Receivables
Amount
Estimated % Uncollectible
85,000
Current
1%
65,000
1-30 days past due
5%
42,000
31-60 days past due
10%
13,000
61-90 days pastdue
20%
15,000
Over 90 days past due
30%
220,000
Total
The following additional information is available for the current year:
(i) Loss allowance at January 1 is $12,500 (normal balance).
(ii) Accounts receivable written off during the period is $13,000.
(iii) Amount recovered from previously written off accounts is $1,300
Question #: 10
How much Expected Credit Loss should GoGurt report for the current year ending December 31?
A. 15,900
B. 15,400
C. 14,600
D. 11,400
Question #: 11
The journal entries that GoGurt would have recorded for the recovery of the previously written off accounts
(refer to transaction (iii) in the question) would include the following entry:
A. Dr Accounts Receivable
$1,300
Cr Loss Allowance
$1,300
B. Dr Accounts Receivable
$1,300
Cr Expected Credit Loss
$1,300
C. Dr Expected Credit Loss
$1,300
Cr Loss Allowance
$1,300
D. Dr Cash
$1,300
Cr Loss Allowance
$1,300
AY2324S1 ACC1701 – Midterm Test Review – Questions Only
Page 5 of 8
Question #: 12
SukaFood Company reported the following amounts in its last financial statements:
•
•
•
•
•
Sales revenue $1,680,000
Cost of goods sold $642,000
Net Income $421,000
Net Accounts Receivables at the beginning of the year $86,000
Net Accounts Receivables at the end of the year $102,000
Calculate SukaFood's average collection period. (round intermediate and final answers to 2 decimal places.
Choose the closest answer)
A. 22.16 days
B. 81.47 days
C. 33.06 days
D. 20.43 days
Question #: 13
This question is worth 2 marks.
The Income Statement and Statement of Financial Position for MuchoFlo Pte. Ltd. for the year ended
December 31, 2023 are shown below:
AY2324S1 ACC1701 – Midterm Test Review – Questions Only
Page 6 of 8
During 2023, MuchoFlo had received payment in advance from its customers in the amount of $69,000 for
services to be performed in 2024. MuchoFlo’s new accounting intern however, had incorrectly recorded the
whole amount to Sales Revenue. The accounting intern had also incorrectly credited the Other Payables
account when recording depreciation expense for 2023. During the external audit, MuchoFlo’s auditors
discovered the errors and made the necessary corrections, the corrected balances are:
A. Assets $1,793,000; Liabilities $652,000; Equity $1,141,000
B. Assets $1,862,000; Liabilities $721,000; Equity $1,141,000
C. Assets $1,931,000; Liabilities $721,000; Equity $1,210,000
D. Assets $1,862,000; Liabilities $797,000; Equity $1,065,000
Question #: 14
In preparing its bank reconciliation for the month of October, Shanti Speed Services Inc. has available the
following information for the month of October:
Cash balance per company books on October 31
(before reconciliation)
Deposit in transit at month-end
Outstanding checks at month-end
Direct transfer from Shanti's customer to its bank
account. (Shanti was never informed of this
payment)
Bank service fees and charge
Interest Income from Bank
NSF check
$286,850
27,500
48,630
14,580
350
1,240
18,500
The bank statement balance of Shanti Speed Services Inc. on October 31 is:
A. 304,950
B. 283,820
C. 307,980
D. 262,690
Question #: 15
Pines Company wrote a check for $1,606 to its supplier, which was paid by the bank. However, Pines had
recorded it in the accounting records as $1,660. How should this error be treated on the bank reconciliation?
A. Add $54 to the bank balance during the reconciliation.
B. Deduct $54 from the bank balance during the reconciliation.
C. Add $54 to the book balance during the reconciliation.
D. Deduct $54 from the book balance
AY2324S1 ACC1701 – Midterm Test Review – Questions Only
Page 7 of 8
Question #: 16
Lotus Inc. has received news that its customer LianHua Company has gone bankrupt, and so Lotus is writing
off LianHua's account receivable. If the credit balance on Lotus's Loss Allowance (Allowance for Bad Debt)
account is less than the amount of write-off, then the entry to record the write-off against the allowance
account results in which of the following:
A. No effect on Lotus's expenses of the current period.
B. An increase in Lotus's expenses of the current period.
C. An decrease in Lotus's expenses of the current period.
D. A reduction of Lotus's current assets.
Questions #17 & #18 are related to Feastival Company.
Feastival Company had the following transactions in the month of October 2023:
•
Provided event planning services in October for $150,000, of which $127,000 was collected in cash
and the remaining on credit.
•
Collected $12,000 cash as advance payment from a client for services that will be performed in
November.
•
Engaged a lighting company and paid $5,250 cash for an event that started on October 1 and will last
till December 31, 2023.
•
Salaries incurred in October was $34,000, but only 90% had been paid out in cash, the remaining will
be paid in early November.
•
Incurred general admin expenses of $30,000 on credit.
•
Paid $24,000 cash on existing accounts payable.
Question #: 17
This question is worth 2 marks.
What is Feastival Company's accrual-basis net income for the month of October 2023?
A. $84,250
B. $79,150
C. $67,150
D. $96,250
Question #: 18
This question is worth 2 marks.
What is Feastival Company's cash-basis net income for the month of October 2023?
A. $84,250
B. $79,150
C. $67,150
D. $96,250
END OF MIDTERM REVIEW
AY2324S1 ACC1701 – Midterm Test Review – Questions Only
Page 8 of 8