1) which of the following items will increase inventoriable costs for the buyer of
goods?
a.purchase returns and allowances granted by the seller
b.purchase discounts taken by the purchaser
c.freight charges paid by the seller
d.freight charges paid by the purchaser
2) a purchase invoice is a document that
a.provides support for goods purchased for cash
b.provides evidence of incurred operating expenses
c.provides evidence of credit purchases
d.serves only as a customer receipt
3) the board of directors of yancey company declared a cash dividend of $1.50 per
share on 42,000 shares of common stock on july 15, 2012. the dividend is to be paid on
august 15, 2012, to stockholders of record on july 31, 2012. the effects of the journal
entry to record the declaration of the dividend on july 15, 2012, are to
a.decrease stockholders equity and increase liabilities
b.decrease stockholders equity and decrease assets
c.increase stockholders equity and increase liabilities
d.increase stockholders equity and decrease assets
4) under u.s. gaap
a.property, plant, and equipment may not be revalued
b.component depreciation is not required
c.research and development costs are expensed as incurred
d.all of the choices are correct
5) norlan company does not ring up sales taxes separately on the cash register. total
receipts for october amounted to $14,700. if the sales tax rate is 5%, what amount must
be remitted to the state for october’s sales taxes?
a.$700
b.$735
c.$35
d.it cannot be determined
6) under the allowance method of accounting for uncollectible accounts,
a.the cash realizable value of accounts receivable is greater before an account is written
off than after it is written off
b.bad debts expense is debited when a specific account is written off as uncollectible
c.the cash realizable value of accounts receivable in the balance sheet is the same before
and after an account is written off
d.allowance for doubtful accounts is closed each year to income summary
7) the golden petting zoo operates a drive-through tourist attraction in colorado. the
company adjusts its accounts at the end of each month. the selected accounts appearing
below reflect balances after adjusting entries were prepared on april 30. the adjusted
trial balance shows the following:
other data:
1>three months’ rent had been prepaid on april 1.
2>the fencing is being depreciated at $6,000 per year.
3>the unearned ticket revenue represents tickets sold for future zoo visits. the tickets
were sold at $4.00 each on april 1. during april, twenty of the tickets were used by
customers.
instructions:
(a)calculate the following:
1>monthly rent expense.
2>the age of the fencing in months.
3>the number of tickets sold on april 1
(b)prepare the adjusting entries that were made by the golden petting zoo on april 30.
8) thayer company purchased a building on january 2 by signing a long-term
$4,200,000 mortgage with monthly payments of $38,500. the mortgage carries an
interest rate of 10 percent. the entry to record the mortgage will include a
a.debit to the cash account for $4,200,000
b.credit to the cash account for $4,200,000
c.debit to the mortgage payable account for $4,200,000
d.credit to the mortgage payable account for $4,200,000
9) on january 1 weiss corporation had 60,000 shares of no-par common stock issued
and outstanding. the stock has a stated value of $5 per share. during the year, the
following transactions occurred:
instructions
(a)prepare the entries, if any, on each of the three dates that involved dividends.
(b)how are dividends and dividends payable reported in the financial statements
prepared at december 31?
10) during 2012, ronald corporation reported net sales of $2,000,000, net income of
$1,200,000, and depreciation expense of $100,000. ronald also reported beginning total
assets of $1,000,000, ending total assets of $1,500,000, plant assets of $800,000, and
accumulated depreciation of $500,000. ronalds asset turnover ratio is
a.2 times
b.1.6 times
c.1.3 times
d.0.96 times
11) a credit is not the normal balance for which account listed below?
a.common stock account
b.revenue account
c.liability account
d.dividends account
12) which one of the following is not a principle of sound accounts receivable
management?
a.determine to whom to extend credit
b.delay cash receipts from receivables if necessary
c.monitor collections
d.determine a payment period
13) hutchinson company had retained earnings of $10,000 on the balance sheet but
disclosed in the footnotes that $2,000 of retained earnings was restricted for plant
expansion and $1,000 was restricted for bond repayments. cash of $2,000 had been set
aside for the plant expansion. how much of retained earnings is available for dividends?
a.$7,000
b.$8,000
c.$10,000
d.$5,000
14) 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,
treasury stock 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
15) an accounts payable clerk also has access to the approved supplier master file for
purchases. the control principle of
a.establishment of responsibility is violated
b.independent internal verification is violated
c.documentation procedures is violated
d.separation of duties is violated
16) which one of the following would not cause a bank to debit a depositor’s account?
a.bank service charge
b.collection of a note receivable
c.wiring of funds to other locations
d.checks marked nsf
17) all of the following statements about financial statement gains and losses on
investments are true except
a.the account “market adjustments – available-for-sale” is reported on the balance sheet
b.unrealized losses on trading securities are reported on the income statement
c.unrealized losses on available-for-sale securities are reported on the income statement
d.the account “market adjustments – trading” is reported on the balance sheet