1) which of the following activities is not a component of the operating cycle?
a.sale of merchandise
b.payment of employees salaries
c.collection of cash from merchandise sales
d.purchase of merchandise
2) carryable cds has the following inventory data:
a physical count of merchandise inventory on november 30 reveals that there are 100
units on hand. cost of goods sold under lifo is
a.$876
b.$1,692
c.$842
d.$1,726
3)
4) which of the following statements is not true about a 2-for-1 stock split?
a.the market value of the stock will probably decrease
b.a stockholder with 5 shares before the split owns 10 shares after the split
c.par value per share is reduced to half of what it was before the split
d.total paid-in capital increases
5) berman inc. has 4,000 shares of 8%, $50 par value, cumulative preferred stock and
50,000 shares of $1 par value common stock outstanding at december 31, 2011, and
december 31, 2012. the board of directors declared and paid a $12,000 dividend in
2011. in 2012, $48,000 of dividends are declared and paid. what are the dividends
received by the common stockholders in 2012?
a.$28,000
b.$24,000
c.$20,000
d.$16,000
6) if disposal of a plant asset occurs during the year, depreciation is
a.not recorded for the year
b.recorded for the whole year
c.recorded for the fraction of the year to the date of the disposal
d.not recorded if the asset is scrapped
7) gross profit does not appear
a.on a merchandising company income statement
b.on a service company income statement
c.to be relevant in analyzing the operation of a merchandising company
d.on the income statement if the periodic inventory system is used because it cannot be
calculated
8) which statement is false?
a.taking a physical inventory involves actually counting, weighing, or measuring each
kind of inventory on hand
b.no matter whether a periodic or perpetual inventory system is used, all companies
need to determine inventory quantities at the end of each accounting period
c.an inventory count is generally more accurate when goods are not being sold or
received during the counting
d.companies that use a perpetual inventory system must take a physical inventory to
determine inventory on hand on the balance sheet date and to determine cost of goods
sold for the accounting period
9) a problem with the specific identification method is that
a.inventories can be reported at actual costs
b.management can manipulate income
c.matching is not achieved
d.the lower of cost or market basis cannot be applied
10) use the following data to calculate the current ratio.
a.1.86 : 1
b.2.00 : 1
c.3.38 : 1
d.2.93 : 1
11) why do pension and mutual funds invest in debt and equity securities?
a.they have excess cash
b.they want to generate earnings from investment income
c.they invest for strategic reasons
d.they invest for speculative reasons