1) the inventory turnover is calculated by dividing
a.cost of goods sold by the ending inventory
b.cost of goods sold by the beginning inventory
c.cost of goods sold by the average inventory
d.average inventory by cost of goods sold
2) *the work sheet is:
a.part of the journal
b.a financial statement
c.part of the ledger
d.none of the above
3) which of the following is not an internal control procedure for cash?
a.only designated personnel are authorized to handle cash
b.the same individual receives the cash and pays the bills
c.surprise audits of cash on hand should be made occasionally
d.access to cash is limited
4) the primary purpose of the statement of cash flows is to
a.provide information about the investing and financing activities during a period
b.prove that revenues exceed expenses if there is a net income
c.provide information about the cash receipts and cash payments during a period
d.facilitate banking relationships
5) on friday of each week, prawn company pays its factory personnel weekly wages
amounting to $55,000 for a five-day work week.
instructions:
(a)prepare the necessary adjusting entry at year end, assuming december 31 falls on
wednesday.
(b)prepare the journal entry for payment of the week’s wages on the payday which is
friday, january 2 of the next year.
6) income from operations appears on
a.both a multiple-step and a single-step income statement
b.neither a multiple-step nor a single-step income statement
c.a single-step income statement
d.a multiple-step income statement
7) cash flows from operating activities, as reported on the statement of cash flows under
the indirect method, would include
a.receipts from the sale of investments
b.net income
c.payments for dividends
d.receipts from the issuance of capital stock
8) in order to compute the present value of an annuity, it is necessary to know the
1>discount rate.
2>number of discount periods and the amount of the periodic payments or receipts.
a.1
b.2
c.both 1 and 2
d.something in addition to 1 and 2
9) the specific identification method of costing inventories is used when the
a.physical flow of units cannot be determined
b.company sells large quantities of relatively low cost homogeneous items
c.company sells large quantities of relatively low cost heterogeneous items
d.company sells a limited quantity of high-unit cost items
10) a company sells $800,000 of accounts receivable to a factor for cash less a 2%
service charge. the entry to record the sale should not include a
a.debit to interest expense for $16,000
b.debit to cash for $784,000
c.debit to service charge expense for $16,000
d.credit to accounts receivable for $800,000
11) dallison company has an accounting fiscal year, which ends on june 30. the
company also has a policy of paying the weekly payroll on friday. payroll records
indicate the following salary costs were incurred.
instructions:
(a)prepare any necessary adjusting journal entries that should be made at year end on
june 30.
(b)prepare the journal entry to record the payment of the weekly payroll on july 2.
12) use the following information to perform the calculations below (using the indirect
method). clearly label the amount of each answer as positive or negative and show all
your calculations.
13) dawson company issued 800 shares of no-par common stock for $7,200. which of
the following journal entries would be made if the stock has stated value of $2 per
share?
14) on september 4, robertas knickknacks buys merchandise on account from dolan
company. the selling price of the goods is $600 and the cost of goods is $400. both
companies use the perpetual inventory systems journalize the transactions on the books
of both companies.
15) the ______________ assumption states that the economic life of a business can be
divided into artificial time periods.
16) collection of a note receivable will result in a credit to ______________ for the face
value of the note and a credit to ______________.