1) which one of the following events would not require a journal entry on a
corporations books?
a.2-for-1 stock split
b.100% stock dividend
c.2% stock dividend
d.$1 per share cash dividend
2) the following accounts show balances on the adjusted trial balance. which of these
account balances will not appear the same on the balance sheet?
a.retained earnings
b.accounts receivable
c.common stock
d.notes payable
3) classic floors has the following inventory data:
assuming that a perpetual inventory system is used, what is the cost of goods sold on a
lifo basis for july?
a.$620.80
b.$315.20
c.$936.00
d.$464.00
4) benedict company compiled the following financial information as of december 31,
2012:
benedicts assets on december 31, 2012 are:
a.$470,000
b.$340,000
c.$160,000
d.$190,000
5) for which of the following errors should the appropriate amount be subtracted from
the balance per bank on a bank reconciliation?
a.check for $43 recorded as $34
b.deposit of $500 recorded by bank as $50
c.a returned $200 check recorded by bank as $20
d.check for $35 recorded as $53
6) from an accounting standpoint, all of the following are contingencies that must be
evaluated for off-balance sheet purposes except
a.product warranties
b.general business risks
c.money-back guarantees for products
d.environmental cleanup obligations
7) presented below are various receivable transactions entered into by renner tool
company. indicate whether the receivables are reported as accounts receivable, notes
receivable, or other receivables on the balance sheet.
a.advanced $1,000 to a trusted employee.
b.accepted a $2,000 promissory note from a customer as payment on account.
c.determined that a $10,000 income tax refund is due from the irs.
d.sold goods to a customer on account for $5,000.
e.recorded $500 accrued interest on a note receivable due next year.
f.loaned a company officer $4,000.
8) dick and jane smith invested $10,000 in a savings account paying 5% annual interest
when their son, jason, was born. they also deposited $500 on each of his birthdays until
he was 20 (including his 20th birthday). dick and jane have obtained the following
values related to the time value of money to help them with their planning process for
their compounded interest decisions.
to the closest dollar, how much was in the savings account on his 20th birthday (after
the last deposit)?
a.$53,066
b.$43,066
c.$30,000
d.$26,533
9) ervay company has $750,000 of bonds outstanding. the unamortized premium is
$10,800. if the company redeemed the bonds at 101, what would be the gain or loss on
the redemption?
a.$3,300 gain
b.$3,300 loss
c.$7,500 gain
d.$7,500 loss
10) the cost of goods sold during the year was $275,000. merchandise inventory
decreased by $10,000 during the year and accounts payable decreased by $5,000 during
the year. using the direct method of reporting cash flows from operating activities, cash
payments for merchandise total
a.$280,000
b.$270,000
c.$260,000
d.$290,000
11) reed company acquires 80 holmes 10%, 5 year, $1,000 bonds on january 1, 2012 for
$82,000. this includes a brokerage commission of $2,000. if reed sells all of its holmes
bonds for $83,200 and pays $2,400 in brokerage commissions, what gain or loss is
recognized?
a.gain of $3,200
b.loss of $1,200
c.gain of $1,200
d.gain of $4,800
12) the vintage laundry company purchased $6,500 worth of laundry supplies on june 2
and recorded the purchase as an asset. on june 30, an inventory of the laundry supplies
indicated only $2,000 on hand. the adjusting entry that should be made by the company
on june 30 is:
a.debit laundry supplies expense, $2,000; credit laundry supplies, $2,000
b.debit laundry supplies, $4,500; credit laundry supplies expense, $4,500
c.debit laundry supplies, $2,000; credit laundry supplies expense, $2,000
d.debit laundry supplies expense, $4,500; credit laundry supplies, $4,500
13) intangible assets are the rights and privileges that result from ownership of
long-lived assets that
a.must be generated internally
b.are depreciated over their useful life
c.have been exchanged at a gain
d.do not have physical substance
14) a company would not acquire treasury stock
a.in order to reissue shares to officers
b.as an asset investment
c.in order to increase trading of the companys stock
d.to have additional shares available to use in acquisitions of other companies
15) when applying the lower of cost or market rule to inventory valuation, market
generally means
a.current replacement cost
b.original cost
c.resale value
d.original cost, less physical deterioration
16) a disadvantage of the corporate form of organization is
a.professional management
b.tax treatment
c.ease of transfer of ownership
d.lack of mutual agency
17) under the cost method of accounting for dividends
a.investment revenue is credited when dividends are received
b.the investment account is credited when the investee reports a net income
c.the investment account is credited when dividends are received
d.investment revenue is credited when the investee reports a net income
18) the following information is available for finley company:
the receivables turnover ratio for 2012 is
a.8.3 times
b.3.9 times
c.7.9 times
d.10.0 times