1) the receipt of cash in advance from a customer
a.increases assets and stockholders’ equity.
b.increases assets and decreases stockholders’ equity.
c.increases assets and liabilities.
d.none of these answer choices are correct.
2) from the following list of selected accounts taken from the records of schmidt clinic,
identify those that would appear on the balance sheet.
a. common stock f. accounts payable
b. service revenue g. cash
c. land h. advertising expense
d. salaries and wages expense i. supplies
e. notes payable j. utilities expense
3) the relationship between current assets and current liabilities is important in
evaluating a company’s
a.profitability
b.liquidity
c.market value
d.solvency
4) a sales discount does not
a.provide the purchaser with a cash saving
b.reduce the amount of cash received from a credit sale
c.increase a contra revenue account
d.increase an operating expense account
5) the following partial amortization schedule is available for courtney company who
sold $300,000, five-year, 10% bonds on january 1, 2012 for $312,000 and uses annual
straight-line amortization.
which of the following amounts should be shown in cell (i)?
a.$31,200
b.$32,400
c.$30,000
d.$ 6,000
6) at january 31, 2014, the balance in goebel inc.’s supplies account was $700. during
february. goebel purchased supplies of $600 and used supplies of $800. at the end of
february, the balance in the supplies account should be
a.$700 debit.
b.$900 credit.
c.$2,100 debit.
d.$500 debit.
7) the receipt of dividends on an investment affects the stock investment account when
which of the following methods is used?
a.cost method
b.equity method
c.combination method
d.market method
8) financial information is presented below:
gross profit would be
a.$105,000
b.$ 45,000
c.$ 60,000
d.$ 15,000
9) the lifo inventory method assumes that the cost of the latest units purchased are
a.the last to be allocated to cost of goods sold
b.the first to be allocated to ending inventory
c.the first to be allocated to cost of goods sold
d.not allocated to cost of goods sold or ending inventory
10) which of the following is included in the cost of constructing a building?
a.cost of paving a parking lot
b.cost of repairing vandalism damage incurred shortly after construction is complete
c.interest incurred during construction
d.cost of removing the demolished building existing on the land when it was purchased
11) arnold company purchases a new delivery truck for $45,000. the sales taxes are
$2,500. the logo of the company is painted on the side of the truck for $1,200. the
trucks annual license is $120. the truck undergoes safety testing for $220. what does
arnold record as the cost of the new truck?
a.$49,040
b.$48,920
c.$47,500
d.$46,920
12) how do these principles apply to cash disbursements:
(a)physical controls?
(b)documentation controls?
13) ifrs allows companies to revalue plant assets to fair value. which of the following
statements is true regarding revaluation?
a.at the time a company purchases an asset it must decide whether to follow revaluation
procedures for the asset; once the election is made, it must be followed for the
remainder of the asset’s useful life
b.assets that are experiencing rapid price changes must be revalued quarterly, other
assets can be revalued on an annual basis
c.the journal entry to record a revaluation when the asset’s price has increased includes
a credit to the account revaluation surplus
d.all of the choices are correct regarding revaluation of plant assets
14) the general term employed to indicate an expense that has not been paid or revenue
that has not been received and has not yet been recognized in the accounts is:
a.contra asset
b.prepayment
c.asset
d.accrued
15) net income will result during a time period when:
a.assets exceed liabilities
b.assets exceed revenues
c.expenses exceed revenues
d.revenues exceed expenses
16) 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,
inventory purchased with cash 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
17) jackson cement corporation reported $35 million for sales when it only had $20
million of actual sales. which of the following characteristics of useful information has
jackson most likely violated?
a.comparability
b.relevance
c.faithful representation
d.consistency
18) schofield retailers accepted $50,000 of silver bank mastercard credit card charges
for merchandise sold on august 1. silver bank charges 4% for its credit card use. the
entry to record this transaction by schofield retailers will include a credit to sales of
$50,000 and a debit(s) to
a.cash for $48,000 and service charge expense for $2,000
b.accounts receivable for $48,000 and service charge expense for $2,000
c.cash for $50,000
d.accounts receivable for $50,000