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1) the going concern assumption assumes that the business
a.will be liquidated in the near future
b.will be purchased by another business
c.is in a growth industry
d.will remain in operation for the foreseeable future
2) a note receivable is a negotiable instrument which
a.eliminates the need for a bad debts allowance
b.can be transferred to another party by endorsement
c.takes the place of checks in a business firm
d.can only be collected by a bank
3) the management discussion and analysis (md & a) section of an annual report covers
various financial aspects of a company.
4) on a bank statement, paid checks are shown as
a.credits
b.debits
c.assets
d.liabilities
5) wilmas vegetable market had the following transactions during 2012:
1>issued $25,000 of par value common stock for cash.
2>recorded and paid wages expense of $10,000.
3>acquired land by issuing common stock of par value $50,000.
4>declared and paid a cash dividend of $1,000.
5>sold a long-term investment (cost $3,000) for cash of $3,000.
6>recorded cash sales of $20,000.
7>bought inventory for cash of $2,000.
8>acquired an investment in ibm stock for cash of $6,000.
9>converted bonds payable to common stock in the amount of $10,000.
10>repaid a 6 year note payable in the amount of $11,000.
what is the net cash provided by investing activities?
a.$6,000
b.$16,000
c.($3,000)
d.$3,000
6) whicch of the following would not be subtracted from the balance per books on a
bank reconciliation?
a.outstanding checks
b.nsf checks
c.check printing charge
d.service charges
7) at october 1, 2014, metz industries had an accounts payable balance of $70,000.
during the month, the company made purchases on account of $50,000 and made
payments on account of $80,000. at october 31, 2014, the accounts payable balance is
a.$70,000 debit
b.$10,000 credit
c.$40,000 credit
d.$80,000 credit
8) on november 1, 2011, love company places a new asset into service. the cost of the
asset is $27,000 with an estimated 5-year life and $3,000 salvage value at the end of its
useful life. what is the depreciation expense for 2012 if love company uses the
straight-line method of depreciation?
a.$1,200
b.$4,800
c.$800
d.$2700
9) the periodic inventory system is used most commonly by companies that sell
a.low-priced, high-volume merchandise
b.high-priced, high-volume merchandise
c.high-priced, low-volume merchandise
d.high-priced, low and high-volume merchandise
10) harden corporation engaged in the following transaction. assume that the harden
corporation uses the indirect method to depict cash flows. indicate where, if at all,
dividends received on securities held would be classified on the statement of cash
flows.
a.operating activities section
b.investing activities section
c.financing activities section
d.does not represent a cash flow
11) a retail store credited the sales account for the sales price and the amount of sales
tax on sales. if the sales tax rate is 5% and the balance in the sales account amounted to
$315,000, what is the amount of the sales taxes owed to the taxing agency?
a.$300,000
b.$315,000
c.$15,750
d.$15,000
12) the following totals for the month of march were taken from the payroll register of
kern company.
the entry to record accrual of employers payroll taxes would include a
a.debit to payroll tax expense for $4,320
b.debit to payroll tax expense for $12,240
c.credit to fica taxes payable for $2,232
d.credit to payroll tax expense for $4,320
13) the financial statements of the melton manufacturing company reports net sales of
$400,000 and accounts receivable of $50,000 and $30,000 at the beginning of the year
and end of year, respectively. what is the average collection period for accounts
receivable in days?
a.65.1
b.36.5
c.27.4
d.45.6
14) which receivables accounting and reporting issue is not essentially the same for ifrs
and gaap?
a.the use of allowance accounts and the allowance method
b.how to record discounts
c.how to record factoring
d.all of the above are essentially the same for ifrs and gaap
15) on january 1, rodgers company purchased as an investment a $1,000, 7% bond for
$1,040. the bond pays interest on january 1 and july 1. what is the entry to record the
interest accrual on december 31?
16) 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. the change in the cash realizable value from the balance at
12/31/11 to 12/31/12 was
a.$50,000 increase
b.$59,000 increase
c.$42,000 increase
d.$51,000 increase
17) during an accounting period, a business has numerous transactions affecting each of
the following accounts. state for each account whether it is likely to have (a) debit
entries only, (b) credit entries only, or (c) both debit and credit entries.
18) external users of accounting information include
a.the financial accounting standards board
b.the shareholders of ferragamo
c.the marketing department at olivetti
d.the ceo of air italy
19) if $30,000 is put in a savings account paying interest of 4% compounded annually,
what amount will be in the account at the end of 5 years?
a.$25,644
b.$36,000
c.$35,096
d.$36,500
20) a person who wants to determine the balance of a particular account should refer to
the
a.ledger.
b.source document.
c.chart of accounts.
d.journal.
