Mackie Company provided $25,500 of services on account, and collected $18,000 from
customers during the year. The company also incurred $17,000 of expenses on account,
and paid $15,400 against its payables. As a result of these events.
A.total assets would increase
B.total liabilities would increase
C.total equity would increase
D.all of these are correct
The transaction, “earned cash revenue,” affects which two accounts?
A.Revenue and Salaries Expense
B.Cash and Notes Payable
C.Cash and Revenue
D.Cash and Dividends
Which of the following are not key FASB initiatives to further converge IFRS and U.S.
GAAP?
A.Short-term convergence projects.
B.Joint projects sharing FASB and IASB staff resources.
C.Having the IASB Chairman in-residence at the FASB office.
D.Monitoring ongoing IASB projects.
E.Researching differences between U.S. GAAP and IFRS.
Benson Company received cash of $5,000,000 by issuing 20-year bonds payable. As a
result of the this transaction, the company’s current ratio will:
A.Remain the same.
B.Increase.
C.Decrease.
D.Cannot be determined.
Petras Company engaged in the following transactions during 2012, its first year in
operations: (Assume all transactions are cash transactions)
1) Acquired $950 cash from the issue of common stock.
2) Borrowed $420 from a bank.
3) Earned $600 of revenues.
4) Paid expenses of $250.
5) Paid a $50 dividend.
During 2013, Petras engaged in the following transactions: (Assume all transactions are
cash transactions)
1) Issued an additional $325 of common stock.
2) Repaid $220 of its debt to the bank.
3) Earned revenues of $750.
4) Incurred expenses of $360.
5) Paid dividends of $100.
The total in Petras’ retained earnings account BEFORE closing in 2012 is
A.$0.
B.$300.
C.$350.
D.none of these.
Indicate whether each of the following statements is true or false.
_____ a) The amount of a sales volume variance is the difference between the static
budget and a flexible budget based on actual volume.
_____ b) The sales volume variance measures managers’ effectiveness in achieving the
planned sales price for the company’s products.
_____ c) Production managers are usually held responsible for the sales volume
variance.
_____ d) If the planned sales volume was 25,000 units and the actual sales volume was
24,500 units, the sales volume variance was favorable.
_____ e) For marketing managers, “making the numbers” refers to reaching the
budgeted sales volume.
Audited financial statements in an annual report of an issuer that is subject to SEC
regulation must include:
A.three balance sheets, three income statements, and three statements of cash flows.
B.three balance sheets, two income statements, and two statements of cash flows.
C.one balance sheet, one income statement, and one statement of cash flows.
D.two balance sheets, three income statements, and three statements of cash flows.
E.two balance sheets, two income statements, and two statements of cash flows.
Which of the following is not one of the more common reorganization plan elements?
A.plans for plant expansion.
B.plans for generating additional monetary resources.
C.plans to settle the debts of the company that existed when the order for relief was
entered.
D.plans proposing changes in the company’s operations.
E.plans for changes in the management of the company.
Indicate whether each of the following statements about financial statements is true or
false.
_______ a) A cash dividend paid to stockholders is shown on the statement of cash
flows.
_______ b) A cash dividend paid to stockholders is shown on the statement of changes
in stockholders’ equity.
_______ c) A cash dividend paid to stockholders is shown on the income statement.
_______ d) Among other things, the balance sheet shows how a company got its cash.
_______ e) Changes in retained earnings for the accounting period are shown on the
income statement.
A capital investment project may provide cash inflows from:
A.incremental revenues.
B.cost savings.
C.the salvage value of the investment.
D.all of these answers are correct.