1) in the month of may, lopat company inc. wrote checks in the amount of $27,750. in
june, checks in the amount of $37,974 were written. in may, $25,404 of these checks
were presented to the bank for payment, and $32,649 in june. what is the amount of
outstanding checks at the end of june?
a.$5,325
b.$2,346
c.$7,671
d.$10,650
2) which of the following statements best describes the behavior over time of the
components of equal mortgage payments?
a.the proportion of interest expense to payment of principal remains the same
b.interest expense increases and payment of principal decreases
c.payment of principal increases and interest expense decreases
d. both payment of principal and interest expense decrease
3) which of the following items does not appear in the statement of cash flows under
the direct method?
a.cash payments to suppliers
b.cash collections from customers
c.depreciation expense
d.cash from the sale of equipment
4) if a gain of $10,000 is incurred in selling (for cash) office equipment having a book
value of $100,000, the total amount reported in the cash flows from investing activities
section of the statement of cash flows is
a.$90,000
b.$110,000
c.$100,000
d.$10,000
5) a common measure of profitability is the
a.current ratio
b.current cash debt coverage ratio
c.return on common stockholders equity ratio
d.debt to total assets
6) can financial statements be prepared directly from the adjusted trial balance?
a.they cannot. the general ledger must be used
b.yes, adjusting entries have been recorded in the general journal and posted to the
ledger accounts
c.no, the adjusted trial balance merely proves the equality of the total debit and total
credit balances in the ledger after adjustments are posted. it has no other purpose
d.they can because that is the only reason that an adjusted trial balance is prepared
7) bonds that may be exchanged for common stock at the option of the bondholders are
called
a.options
b.stock bonds
c.convertible bonds
d.callable bonds
8) ratios are used as tools in financial analysis
a.instead of horizontal and vertical analyses
b.because they can provide information that may not be apparent from inspection of the
individual components of the financial statements
c.because even single ratios by themselves are quite meaningful
d.because they are prescribed by gaap
9) if the single amount of $1,000 is to be received in 3 years and discounted at 6%, its
present value is
a.$839.62
b.$943.46
c.$890.00
d.$879.09
10) presented below are selected transactions for the tinker company for 2013.
journalize all entries required as a result of the above transactions. tinker company uses
the straight-line method of depreciation and has recorded depreciation through
december 31, 2012.
11) equipment with a cost of $320,000 has an estimated salvage value of $20,000 and
an estimated life of 4 years or 15,000 hours. it is to be depreciated using the
units-of-activity method. what is the amount of depreciation for the first full year,
during which the equipment was used 3,300 hours?
a.$80,000
b.$90,400
c.$66,000
d.$75,000
12) a buyer borrows money at 12% interest to pay a $6,000 invoice with terms 1/10,
n/30 on the 10th day of the discount period. the loan is repaid on the 30th day of the
invoice. what is the buyers net savings for this total event?
a.$0
b.$20.00
c.$20.40
d.$40.00
13) if $20,000 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.$16,439
b.$24,000
c.$24,310
d.$24,333
14) if a debt investment is sold, the investment account is
a.debited for the book value of the bonds at the sale date
b.credited for the cost of the bonds at the sale date
c.credited for the fair value of the bonds at the sale date
d.debited for the cost of the bonds at the sale date
15) to record estimated uncollectible accounts using the allowance method, the
adjusting entry would be a
a.debit to accounts receivable and a credit to allowance for doubtful accounts
b.debit to bad debts expense and a credit to allowance for doubtful accounts
c.debit to allowance for doubtful accounts and a credit to accounts receivable
d.debit to loss on credit sales and a credit to accounts receivable