Which of the following events would not require an end-of-year adjusting entry?
A.Purchasing supplies for cash
B.Providing services on account
C.Purchasing a 12-month insurance policy on July 1
D.All of these would require an end-of-year adjustment
Which of the following is not a way for a country to use IFRS?
A.Require foreign companies listed on that country’s stock exchange to use IFRS for
consolidated financial statements.
B.Allow foreign companies listed on that country’s stock exchange to use IFRS.
C.Allow that country’s companies listed on its stock exchange to use IFRS.
D.Adopt IFRS as that country’s national GAAP.
E.All of these are ways a country can use IFRS.
The capital account balances for Donald & Hanes LLP on January 1, 2013, were as
follows:
Donald and Hanes shared net income and losses in the ratio of 3:2, respectively. The
partners agreed to admit May to the partnership with a 35% interest in partnership
capital and net income. May invested $100,000 cash, and no goodwill was recognized.
What is the balance of Donald’s capital account after the new partnership is created?
A.$84,000.
B.$100,000.
C.$140,000.
D.$176,000.
E.$200,000.
Cost of goods sold/average inventory is the formula for which of these analytical
measures?
A.Number of day’s sales in inventory
B.Return on investment
C.Inventory turnover
D.Debt to assets ratio
Treadwell Company borrowed $32,000 of cash from a local bank. Which of the
following choices accurately reflects how this event affects the company’s financial
statements?
A.
B.
C.
D.
On October 1, 2014, Balkan, Inc. accepted from another corporation a 1-year note
receivable in the amount of $15,000, with an interest rate of 6%. On December 31,
2014, Balkan accrued the interest income earned to date. How did this accrual affect
Balkan’s financial statements?
A.Option A
B.Option B
C.Option C
D.Option D
Maynard Company’s balance sheet and income statement are provided below:
The company paid cash dividends of $2.00 per share during 2014. On December 31,
2014, the stock was listed on the stock exchange at a price of $78.25 per share.
Required:
Compute the following ratios for 2014:
(a) Accounts receivable turnover
(b) Average days to collect receivables
(c) Inventory turnover
(d) Average days to sell inventory
(e) Debt to assets ratio
(f) Debt to equity ratio
(g) Net margin
(h) Asset turnover
(i) Return on investment
(j) Dividend yield
Round your answers to one decimal place.
Varghese Company paid cash to purchase land. As a result of this accounting event
A.total assets decreased.
B.total assets were unaffected.
C.total equity decreased.
D.none of these.
Cleary, Wasser, and Nolan formed a partnership on January 1, 2012, with investments
of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed
to (1) interest of 10% of the beginning capital balance each year, (2) annual
compensation of $10,000 to Wasser, and (3) sharing the remainder of the income or loss
in a ratio of 20% for Cleary, and 40% each for Wasser and Nolan. Net income was
$150,000 in 2012 and $180,000 in 2013. Each partner withdrew $1,000 for personal use
every month during 2012 and 2013.
What was Wasser’s capital balance at the end of 2013?
A.$201,000.
B.$263,520.
C.$264,540.
D.$304,040.
E.$313,780.
In countries where there is less pressure for public accountability and information
disclosure:
A.information needs can be satisfied by requesting information from internal company
sources.
B.public offerings of stock shares are the primary source of financing for companies.
C.accounting information is prepared to meet the needs of taxing authorities.
D.accounting standards emphasize accounting for high inflation situations.
E.the accounting focus is on recent market economy reforms.
Which one of the following statements describes an ordinary annuity?
A.Series of cash inflows of varying amounts collected at the end of each period
B.Series of cash flows of equal amounts collected at the end of each period
C.Series of cash flows of varying amounts collected at the beginning of each period
D.Series of cash flows of equal amounts collected at the beginning of each period
As of December 31, 2013, Gant Corporation had a current ratio of 1.29, quick ratio of
1.05, and working capital of $18,000. The company uses a perpetual inventory system
and sells merchandise for more than it cost. On January 1, 2014, Gant paid $250 for
transportation in cost on merchandise it had received. Which of the following
statements is incorrect?
A.Grove’s current ratio will remain the same.
B.Grove’s quick ratio will increase.
C.Grove’s working capital will remain the same.
D.Grove’s quick ratio will increase and its current ratio will remain the same.
Lilly’s Corporation has working capital of $620,000, and Harmon Corporation has
working capital of $840,000. Which of the following statements is incorrect?
A.Since working capital is an absolute amount, other factors such as size of the
company and materiality will help to determine liquidity of these two companies.
B.Since Harmon’s working capital exceeds Lilly’s working capital, it is safe to conclude
that Harmon is more liquid than Lilly.
C.If Lilly Corporation is smaller than Harmon or has lower current liabilities; Lilly
could be more liquid than Harmon.
D.None of these answers is correct.
The following information relates to Cruz Manufacturing for 2013:
Based on this information, what is the company’s cost of goods sold for 2013?
A.$86,000
B.$120,000
C.$114,000
D.$170,000
Withdrawals from the partnership capital accounts are typically not used
A.to reward partners for work performed in the business.
B.to reduce the partners’ capital account balances at the end of an accounting period.
C.to record interest earned on a partner’s capital balance.
D.to reduce the basic investment that has been made in the business.
E.to record the partnership’s payment of a partner’s personal expense such as income
tax.