1) receiving payment of a portion of an accounts receivable will
a.not affect total assets.
b.increase liabilities.
c.increase stockholders equity.
d.decrease net income.
2) rice company reported the following on its income statement:
an analysis of the income statement revealed that interest expense was $80,000. rice
company’s times interest earned was
a.8 times
b.7.25 times
c.6.25 times
d.4.4 times
3) carson company on july 15 sells merchandise on account to tayler co. for $1,500,
terms 2/10, n/30. on july 20 tayler co. returns merchandise worth $600 to carson
company. on july 24 payment is received from tayler co. for the balance due. what is the
amount of cash received?
a.$900
b.$882
c.$870
d.$1,500
4) which of the following ratios may be used to measure a companys quality of
earnings?
a.price-earnings ratio
b.return on assets ratio
c.current ratio
d.times interest earned ratio
5) borrowing money and issuing shares of stock are
a.operating activities.
b.investing activities.
c.financing activities.
d.none of these answer choices are correct.
6) nilson company gathered the following reconciling information in preparing its
august bank reconciliation:
the adjusted cash balance per books on august 31 is
a.$8,320
b.$8,020
c.$4,620
d.$4,920
7) on january 1, 2012, $1,000,000, 10-year, 10% bonds, were issued for $970,000.
interest is paid annually on january 1. if the issuing corporation uses the straight-line
method to amortize discount on bonds payable, the monthly amortization amount is
a.$9,700
b.$3,000
c.$808
d.$250
8) parker company issued ten-year, 9%, bonds payable in 2012 at a premium. during
2012, the companys accountant failed to amortize any of the bond premium. the
omission of the premium amortization will
a.not affect net income for 2012
b.cause retained earnings at the end of 2012 to be overstated
c.cause net income for 2012 to be overstated
d.cause net income for 2012 to be understated
9) a decline in a companys gross profit could be caused by all of the following except
a.selling products with a lower markup
b.clearance of discontinued inventory
c.paying lower prices to its suppliers
d.increasing competition resulting in a lower selling price
10) the economic entity assumption states that economic events
a.of different entities can be combined if all the entities are corporations
b.must be reported to the securities and exchange commission
c.of a sole proprietorship cannot be distinguished from the personal economic events of
its owners
d.of every entity can be separately identified and accounted for
11) which of the following accounts has a normal credit balance?
a.prepaid rent
b.notes receivable
c.rent revenue
d.rent expense
12) a _________________ buys and sells inventory rather than performing services as
their primary source of revenue.
13) presented here are selected transactions for the foyle company during april. foyle
uses the periodic inventory system.
instructions
journalize the april transactions for foyle company.
14) journalize the following business transactions in general journal form. identify each
transaction by number. you may omit explanations of the transactions.
1)received $50,000 from stockholders.
2)purchased equipment for $75,000, paying $15,000 in cash and giving a note payable
for the remainder.
3)paid $3,000 rent for the month.
4)recorded $12,500 of services provided on account.
5)paid wages of $9,500.
6)received $7,000 in cash for services provided.
7)collected $2,000 from customers on account.
15) the entry to record the declaration of a stock dividend increases
_________________, and decreases ________________.
16) the ledger accounts of the get fit gym at july 31, 2014 are shown below:
instructions
prepare a trial balance with the ledger accounts arranged in the proper financial
statement order. include the appropriate heading.
