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1) given the data below for a firm in its first year of operation, determine net income
under the cash basis of accounting.
a.$18,000
b.$27,000
c.$20,000
d.$11,000
2) adjustments would not be necessary if financial statements were prepared to reflect
net income from:
a.monthly operations
b.fiscal year operations
c.interim operations
d.lifetime operations
3) whitmore corporation issues a £1,200,000, 10%, 10-year mortgage on december 31,
2011. the terms call for semi-annual installment payments of £96,290.the entry to
record the first installment payment will include
a.a debit to interest payment of £96,290
b.a debit to mortgage notes payable of £23,710
c.a debit to interest expense of £120,000
d.a credit to cash of £96,290
4) using the following balance sheet and income statement data, what is the total
amount of working capital?
a.$9,000
b.$7,000
c.$5,000
d.$2,000
5) of the items below, the one that appears first on the statement of cash flows is
a.noncash investing and financing activities
b.net increase (decrease) in cash
c.cash at the end of the period
d.cash at the beginning of the period
6) equipment with a cost of $150,000 has an estimated salvage value of $10,000 and an
estimated life of 4 years or 10,000 hours. it is to be depreciated by the units-of-activity
method. what is the amount of depreciation for the first full year, during which the
equipment was used 2,700 hours?
a.$37,500
b.$35,000
c.$37,800
d.$36,250
7) comparisons of data within a company are an example of the following comparative
basis
a.industry averages
b.intercompany
c.intracompany
d.interregional
8) horizontal analysis is a technique for evaluating a series of financial statement data
over a period of time
a.that has been arranged from the highest number to the lowest number
b.that has been arranged from the lowest number to the highest number
c.to determine which items are in error
d.to determine the amount and/or percentage increase or decrease that has taken place
9) the face value of a note refers to the amount
a.that can be received if sold to a factor
b.borrowed plus interest received at maturity from the maker
c.at which the note receivable is recorded
d.remaining after a service charge has been deducted
10) an accountant has debited an asset account for $800 and credited a liability account
for $700. which of the following would be an incorrect way to complete the recording
of the transaction?
a.credit an asset account for $100.
b.credit another liability account for $100.
c.credit a stockholders equity account for $100.
d.debit a stockholders equity account for $100.
11) ramirez company acquires land for $260,000 cash. additional costs are as follow.
ramirez will record the acquisition cost of the land as
a.$274,640
b.$277,200
c.$275,920
d.$260,000
12) a $200 petty cash fund has cash of $28 and receipts of $170. the journal entry to
replenish the account would include
a.debit to cash for $170
b.credit to petty cash for $170
c.debit to petty cash for $172
d.credit to cash for $172
13) anderson inc. sells $600 of merchandise on account to baltic company with credit
terms of 2/10, n/30. if baltic company remits a check taking advantage of the discount
offered, what is the amount of baltic company's check?
a.$588
b.$600
c.$540
d.$560
14) during 2012, jennifer industries reported cash provided by operations of
$280,000,000, cash used in investing of $343,000,000, and cash used in financing of
$45,000,000. in addition, cash spent for fixed assets during the period was
$138,000,000. average current liabilities were $325,000,000 and average total liabilities
were $858,000,000. no dividends were paid. based on this information, what was
jennifer's current cash debt coverage ratio?
a.1.16 times
b.2.03 times
c.0.82 times
d.0.86 times
