The goals of the SEC include all except which one of the following?
A.prohibiting the dissemination of materially misstated information.
B.controlling the number of companies whose stock is listed on major stock exchanges.
C.regulating the operation of securities markets.
D.ensuring that full and fair information is disclosed to all investors before the
securities of a company are allowed to be bought and sold.
E.preventing the misuse of information especially by inside parties.
The following partial balance sheet is provided for Groome Company:
What is the company’s debt to assets ratio?
A.49%
B.16%
C.33%
D.Cannot be determined with the information given.
The following balance sheet information is provided for Patton Company:
Assuming 2014 cost of goods sold is $730,000, what is the company’s average days to
sell inventory? (Use 365 days in a year. Do not round your intermediate calculations.)
A.17.5 days
B.18.25 days
C.19 days
D.20.86 days
What is normally required before a reorganization plan can be implemented?
A.The plan must be presented by the company and confirmed by the court.
B.The plan must be approved by each class of creditors and each class of stockholders,
and confirmed by the court.
C.The plan must be presented by the company, approved by two-thirds of each class of
stockholders, and confirmed by the court.
D.The plan must be presented by the company, approved by three-fourths of each class
of stockholders, and confirmed by the court.
E.The plan must be approved by two-thirds of each class of creditors, approved by
two-thirds of each class of stockholders, and confirmed by the court.
Which one of the following is not a characteristic of the Public Company Accounting
Oversight Board?
A.Minimizes self-regulation in the accounting profession.
B.Has the authority to amend, modify, repeal, or reject any audit standard of the ASB.
C.Only one member can be an accountant, past or present.
D.SEC has oversight and enforcement authority over the Board.
E.Enforces auditing, quality control, and independence standards and rules.
A proxy statement must be filed with the SEC at least how many days before being
distributed?
A.30
B.60
C.10
D.90
E.7
What amount of cash must be invested today in order to have $60,000 at the end of one
year assuming the rate of return is 9%? (Do not round your PV factors.)
A.$45,454.56
B.$54,000.00
C.$55,045.88
D.$54,600.00
A company incurs research and development costs of $200,000 in 2013 of which
$50,000 of these costs relate to development activities because certain criteria have
been met which suggest that an intangible asset has been created.
What amount should be recognized as research and development expense in 2013 using
IFRS?
A.$50,000.
B.$150,000.
C.$200,000.
D.$0.
E.$250,000.
Indicate whether each of the following statements is true or false:
_____ a) A responsibility accounting system is useful for controlling operations but not
for evaluating the performance of managers.
_____ b) Return on investment is usually calculated, Contribution Margin/Operating
Assets.
_____ c) Many businesses use the return on investment of departments and other
segments in deciding how to allocate resources within the company.
_____ d) The use of return on investment in allocating resources within an organization
may motivate segment managers to improve performance.
_____ e) Return on investment for a division should be calculated based on factors the
division manager can control.
Cleary, Wasser, and Nolan formed a partnership on January 1, 2012, with investments
of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed
to (1) interest of 10% of the beginning capital balance each year, (2) annual
compensation of $10,000 to Wasser, and (3) sharing the remainder of the income or loss
in a ratio of 20% for Cleary, and 40% each for Wasser and Nolan. Net income was
$150,000 in 2012 and $180,000 in 2013. Each partner withdrew $1,000 for personal use
every month during 2012 and 2013.
What was Cleary’s total share of net income for 2012?
A.$63,000.
B.$53,000.
C.$58,000.
D.$29,000.
E.$51,000.
Revenue on account amounted to $4,000. Cash collections of accounts receivable
amounted to $2,300. Expenses for the period were $2,100. The company paid dividends
of $450. Net income for the period was
A.$200.
B.$1,450.
C.$1,850.
D.$1,900.
Cash outflows generated by capital investments include all of the following except:
A.annual depreciation of the capital asset.
B.initial investment in the capital asset.
C.increase in operating expenses.
D.increase in the amount of required working capital.
A company incurs research and development costs of $200,000 in 2013 of which
$50,000 of these costs relate to development activities because certain criteria have
been met which suggest that an intangible asset has been created.
As a result of research and development costs, what is the difference in income between
reporting using U.S. GAAP and IFRS in 2013?
A.U.S. GAAP income is $50,000 higher.
B.U.S. GAAP income is $50,000 lower.
C.IFRS income is $50,000 lower.
D.IFRS income is $150,000 lower.
E.IFRS income is $150,000 higher.
Classify each of the following costs for Harrison Company as a selling or general and
administrative period cost or as a direct or indirect product cost by entering the dollar
amount(s) in the appropriate column(s):
A. Paid $75,000 in wages for employees who assemble the company’s products.
B. Paid sales commissions of $58,000.
C. Paid $38,000 in salaries for factory supervisors.
D. Paid $88,000 in salaries for executives (president and vice presidents).
E. Recorded depreciation cost of $25,000. $13,000 was depreciation on factory
equipment and $12,000 was depreciation on the company headquarters building.
F. Paid $4,000 for various supplies that it used in the factory (oil and materials used in
machine maintenance).
G. Used $10,000 in prepaid corporate liability insurance.
Which one of the following is not a division of the SEC?
A.the Division of Corporation Finance.
B.the Division of Investment Management.
C.the Division of Compliance Information.
D.the Division of Enforcement.
E.the Division of Trading and Markets.
On December 31, 2013, Farrell Co. owed $1,500 in salaries to employees who had
worked during December but would be paid in January. If the year-end adjustment is
properly recorded on December 31, 2013, what will be the effect of the accrual on the
following items for Farrell?
A.Option A
B.Option B
C.Option C
D.Option D
Which of the following statements is false regarding providers of financing?
A.There is less pressure to provide accounting information in those countries in which
financing is primarily by banks.
B.In countries where capital stock is the primary source of financing, accounting
emphasizes the income statement.
C.Disclosures are less extensive in those countries financed primarily by stock.
D.Bankers tend to focus more on solvency and stockholders focus more on profitability.
E.As companies become more dependent on financing by stock, more information is
demanded.
If a company’s total assets decreased while liabilities and common stock were
unchanged, and no dividends were paid, then
A.cash flow from operating activities was greater than cash flow from investing
activities.
B.retained earnings were less than net income during the period.
C.revenues were less than expenses.
D.the company must have purchased assets with cash.
Falcon Company earned $15,000 of cash revenue. Which of the following choices
accurately reflects how this event affects the company’s financial statements?
A.
B.
C.
D.