# CONNECTICUT Statewide Career & Technical Education ASSESSMENT

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1 CONNECTICUT Statewide Career & Technical Education ASSESSMENT State Department of Education Academic Office 165 Capital Avenue - Room 205 Hartford, Connecticut Accounting ACCOUNTING Sample Items by 2015 Performance Standards and Competencies State Standards

3 Identify, calculate, and record depreciation and depletion and explain the impact on the financial statements. Math Standard 4: Apply the mathematics learned to solve problems arising in everyday life, society, and the workplace. Readability Average: 11.8 What is the straight-line depreciation rate for a company car with a useful life of 150,000 miles and a total estimated depreciation of \$3,000? Question 4 A..002 cents per mile B. 2 cents per mile C. 20 cents per mile D. 2 dollars per mile Apply transactions for accounts payable and other short-term debt. Reading Standard 4: Determine the meaning of symbols, key terms, and other domain-specific words and phrases as they are used in a specific scientific or technical context relevant to grades texts and topics. Readability Average: 10.6 The sum of the accounts in the Accounts Payable Ledger equals the Question 5 A. total amount of accounts paid off during a fiscal period B. total amount of cash paid to creditors during a fiscal period C. total amount of purchases made during a fiscal period D. total amount of the Accounts Payable account in the general ledger Analyze transactions involving accruals. Reading Standard 5: Analyze how the text structures information or ideas into categories or hierarchies, demonstrating understanding of the information or ideas. Readability Average: 10.5 Which type of business would recognize revenue when it is earned? A. manufacturing Question 6 B. service C. corporation D. partnership 2

5 Performance Readability Average: 11.3 Question 10 Financial Analysis: Access the financial condition and operating results of a company and analyze and interpret financial statements and information to make informed business decisions. Calculate component percentages. Reading Standard 8: Evaluate the hypotheses, data, analysis, and conclusions in a science or technical text, verifying the data when possible and corroborating or challenging conclusions with other sources of information. A limited liability corporation has a current ratio of 2.7:1 which indicates that the corporation is in a A. good position to meet its short term liabilities B. good position to collect on their receivables C. bad position to meets its short term debt D. bad position to pay its liabilities Calculate component percentages. Readability Average: 12.2 Math Standard 4: Apply the mathematics learned to solve problems arising in everyday life, society, and the workplace. If a company paid \$12,000 in June for expenses as summarized in the pie chart below, which of the following conclusions is correct? June Expenses Utilities 30% Taxes 8% Advertising 17% Question 11 Travel 5% Rent 40% A. Rent: \$3,600 B. Utilities: \$2,600 C. Rent and Utilities: \$6,000 D. Advertising: \$2,040 4

6 Performance Special Applications: Apply appropriate accounting principles to payroll. Prepare and maintain payroll records. Reading Standard 4: Determine the meaning of symbols, key terms, and other domain-specific words and phrases as they are used in a specific scientific or technical context relevant to grades texts and topics. Readability Average: 10.1 The salaries expense account is used to Question 12 A. record the weekly payroll B. record the employer s payroll tax C. pay the employer s FICA tax D. pay the employee s Medicare tax 5

7 Answer Key for Sample Items 1 B 7 B 2 A 8 C 3 D 9 B 4 B 10 A 5 D 11 D 6 B 12 A 6

8 CONNECTICUT Statewide Career & Technical Education ASSESSMENT State Department of Education Academic Office 165 Capital Avenue - Room Hartford, Connecticut

9 ACCOUNTING COMPETENCY ANALYSIS Statewide Number Competencies by Highest Performing Average 20 Calculate component percentages Explain the need for a code of ethics in accounting and ethical responsibilities required of accountants Identify, calculate, and record depreciation and depletion and explain the impact on the financial statements Describe and record expense-related transactions Define assets, liabilities, equity, revenue, expenses, gains, and losses Analyze and describe how basic business transactions impact the accounting equation Describe career opportunities in the accounting profession Record transactions for long-term debt instruments Complete the closing process Describe methods for controlling and safeguarding cash Describe and record revenue-related transactions Determine the cost of inventory for businesses and apply appropriate valuation methods Describe the users and uses of financial information Explain the difference between the periodic and perpetual inventory methods Explain the need for adjusting entries and record basic adjusting entries Apply transactions for accounts payable and other short-term debt Analyze transactions involving accruals Prepare and maintain payroll records Discuss the information that can be obtained from analyzing financial statements Describe and record equity-related transactions Record transactions affecting accounts receivable, including uncollectible accounts, write-offs, and recoveries Describe the information provided in each financial statement and how the statements relate. 39 1

10 Performance Standard Standard Practice Question 1 Standard Practice Question 2 Question 3 Accounting Principles: Identify and describe generally accepted accounting principles (GAAP/IFRS) and explain how the application of these principles impacts the recording of financial transactions and the preparation of financial statements. Determine the cost of inventory for businesses and apply appropriate valuation methods. Math Standard 4: Apply the mathematics learned to solve problems arising in everyday life, society, and the workplace. What would the cost of goods sold be if the beginning inventory is \$30,000, purchases are \$10,000, ending inventory is \$20,000, sales are \$100,000, and selling expenses are \$30,000? A. \$20,000 B. \$40,000 C. \$110,000 D. \$120,000 Apply transactions for accounts payable and other short-term debt. Math Standard 8: Determine if calculations are repeated, and look both for general methods and for shortcuts. What are the proceeds on a 4 percent, 3 month, non-interest bearing note for \$4,000? A. \$3,960 B. \$3,996 C. \$4,000 D. \$4,040 Describe and record equity-related transactions. A corporation s treasury stock is reported on the balance sheet. How would the sale of treasury stock be reported? A. a decrease to the Stockholder's Equity B. a decrease to Retained Earnings C. an increase to the Stockholder's Equity D. an increase to Retained Earnings 2

11 Question 4 Performance Standard Question 5 Performance Standard Question 6 Analyze transactions involving accruals. Recording revenue that a company has not earned yet A. decreases assets B. increases liabilities C. increases owner's equity D. decreases revenues Accounting Process: Complete the various steps of the accounting cycle in order to prepare financial statements. Explain the need for adjusting entries and record basic adjusting entries. When unearned revenue is recorded, the adjusting entry would A. decrease liabilities B. increase assets C. increase liabilities D. decrease assets Financial Reports: Develop an understanding and working knowledge of financial statements. Describe the information provided in each financial statement and how the statements relate. Preparation of the statement of retained earnings precedes the A. statement of cash flows B. income statement C. notes to the financial statements D. balance sheet 3

12 Standard Practice Question 7 Describe the information provided in each financial statement and how the statements relate. Math Standard 5: Consider the available tools when solving a mathematical problem. Calculate the Net Income using the information from the records of Sosa Corporation. Sales \$150,000 Cost of Goods Sold \$60,000 Salaries Expense \$24,000 Salaries Payable \$4,000 Advertising Expense \$4,000 Prepaid Expenses \$8,000 Interest Expense \$2,000 Unearned Revenue \$4,000 Performance Standard Standard Practice Question 8 A. \$44,000 B. \$48,000 C. \$52,000 D. \$60,000 Financial Analysis: Access the financial condition and operating results of a company and analyze and interpret financial statements and information to make informed business decisions. Discuss the information that can be obtained from analyzing financial statements. Reading Standard 5: Analyze how the text structures information or ideas into categories or hierarchies, demonstrating understanding of the information or ideas. An auditor s report, graphs, and charts will provide information regarding a company's A. stocks and financial summary B. management report C. financial health and operational success D. stock analyses 4

13 Performance Standard Standard Practice Question 9 Standard Practice Question 10 Special Applications: Apply appropriate accounting principles to payroll. Prepare and maintain payroll records. Math Standard 1: Explain the meaning of a problem and look for entry points to its solution. Calculate the gross pay of an employee who receives an hourly rate of \$30, with time and a half for all hours worked in excess of 40 hours during a week. Payroll data for the current week is as follows: hours worked, 42; Federal income tax withheld, \$250; Social Security tax rate at 6.0 percent, and Medicare tax rate at 1.5 percent on all earnings. A. \$ B. \$ C. \$1, D. \$1, Prepare and maintain payroll records. Reading Standard 10: Read and comprehend science/technical texts in grades 11-CCR (college career readiness) text complexity band independently and proficiently. An employee s authorized contribution to a charitable organization that is withheld from their gross pay would be credited to A. a payable account B. a contra-asset account C. a capital account D. a drawing account 5

14 Answer Key for Sample Items 1 A 6 D 2 A 7 D 3 C 8 C 4 B 9 D 5 A 10 A 6