1) which of the following statements is not considered a disadvantage of the corporate
form of organization?
a.additional taxes
b.government regulations
c.limited liability of stockholders
d.separation of ownership and management
2) the following information is available for bradshaw corporation and newell
corporation:
based on this information, the earnings per share calculations (rounded to two decimals)
suggest:
a.lower performance in 2011 than in 2012 for bradshaw corporation
b.higher performance in 2012 than in 2011 for bradshaw corporation
c.fewer earnings available to bradshaw’s common stockholders in 2012 than in 2011
d.an increase in the average number of common shares outstanding between 2011 and
2012 for bradshaw corporation
3) the following information is related to december 31, 2011 balances.
during 2012 sales on account were $145,000 and collections on account were $86,000.
also, during 2012 the company wrote off $8,000 in uncollectible accounts. an analysis
of outstanding receivable accounts at year end indicated that bad debts should be
estimated at $54,000. bad debt expense for 2012 is:
a.$17,000
b.$ 9,000
c.$54,000
d.$ 1,000
4) fornelli corporation borrowed $360,000 from central bank on may 31, 2011. the
three-year, 7% note required annual payments of $137,178 beginning may 31, 2012.
interest expense for the year ended december 31, 2011 was
a.$14,700
b.$16,800
c.$25,200
d.$0
5) when a service has been performed, but no cash has been received, which of the
following statements is true?
a.no journal entry is made.
b.the entry includes a debit to accounts payable.
c.the entry includes a credit to unearned revenue.
d.the entry includes a debit to accounts receivable.
6) which of the following statements is true?
a.amounts received from issuing stock are revenues
b.amounts paid out as dividends are not expenses
c.amounts paid out as dividends are reported on the income statement
d.amounts received from issued stock are reported on the income statement
7) use the following information regarding black company and red company to answer
the question which amount is equal to red company’s “days in inventory” for 2011 (to
the closest decimal place)?
a.67.8 days
b.38.4 days
c.28.1 days
d.41.5 days
8) at the end of its first year, the trading securities portfolio consisted of the following
common stocks.
the unrealized loss to be recognized under the fair value method is
a.$4,200
b.$8,200
c.$4,600
d.$4,000
9) the payment of a liability
a.decreases assets and stockholders equity.
b.increases assets and decreases liabilities.
c.decreases assets and increases liabilities.
d.decreases assets and liabilities.
10) the concept that a business has a reasonable expectation of remaining in business
for the foreseeable future is called the
a.economic entity assumption
b.monetary unit assumption
c.periodicity assumption
d.going concern assumption
11) free cash flow represents
a.cash provided by operations less adjustments for capital expenditures and dividends
b.a measurement of a companys cash generating ability
c.a measure of solvency
d.all of the above
12) the adjusted trial balance for hamilton corp. at the end of the current year, 2012,
contained the following accounts.
the total long-term liabilities reported on the balance sheet are
a.$1,365,000
b.$1,350,000
c.$1,465,000
d.$1,450,000
13) the following information is available for cooke corporation:
what is the net increase in cash and equivalents?
a.$1,640
b.$1,220
c.$670
d.$2,190
14) the only accounts that are closed are temporary accounts.
15) in a single-step income statement, all data are classified under two categories: (1)
revenues, or (2) expenses. if the income statement is recast in a multiple-step format,
what additional information or intermediate components of income would be
presented?
16) shellan kamp company identifies the following items for possible inclusion in the
physical inventory. indicate whether each item should be included or excluded from the
inventory taking.
1>goods shipped on consignment by shellan kamp to another company.
2>goods in transit from a supplier shipped fob destination.
3>goods shipped via common carrier to a customer with terms fob shipping point.
4>goods held on consignment from another company.
17) selected transactions for the sleezer company are listed below. list the number of the
transaction and then describe the effect of each transaction on assets, liabilities, and
stockholders equity.
sample: made initial cash investment in the business.
the answer would beincrease in assets and increase in stockholders equity.
1)paid monthly utility bill.
2)purchased new display case for cash.
3)paid cash for repair work on security system.
4)billed customers for services performed.
5)received cash from customers billed in transaction 4 .
6)dividends paid to owners.
7)incurred advertising expenses on account.
8)paid monthly rent.
9)received cash from customers when service was rendered.
18) the five subdivisions of stockholders equity are ______________,
_______________, _________________, __________________, and
_________________.