1) posting is performed by transferring information from the
a.source documents to the journal.
b.ledger to the journal.
c.source documents to the ledger.
d.journal to the ledger.
2) employees at biquell corporation are paid $8,000 cash every friday for working
monday through friday. the calendar year accounting period ends on wednesday,
december 31. how much salary expense should be recorded two days later on january
2?
a.$8,000
b.$4,800
c.none, expense recognition requires the weekly salary to be accrued on december 31
d.$3,200
3) the balance sheet
a.summarizes the changes in retained earnings for a specific period of time
b.reports the changes in assets, liabilities, and stockholders equity over a period of time
c.reports the assets, liabilities, and stockholders equity at a specific date
d.presents the revenues and expenses for a specific period of time
4) in calculating net cash provided by operating activities using the indirect method, an
increase in prepaid expenses during a period is
a.deducted from net income
b.added to net income
c.ignored because it does not affect income
d.ignored because it does not affect expenses
5) all of the following statements are true regarding the average collection period
except:
a.it is a popular variant of the receivables turnover ratio
b.it is used to assess the effectiveness of a company’s credit and collection policies
c.it should generally exceed the credit term period
d.its increase may suggest a decline in the financial health of customers
6) which of the following is not typically a characteristic experienced by a company
during the introductory phase of the corporate life cycle?
a.cash used in operations will exceed cash generated by operations
b.considerable cash will be used to purchase productive assets
c.cash from investing is positive
d.cash from financing is positive
7) using the percentage of receivables method for recording bad debts expense,
estimated uncollectible accounts are $35,000. if the balance of the allowance for
doubtful accounts is $11,000 debit before adjustment what is the balance after
adjustment?
a.$35,000
b.$11,000
c.$43,000
d.$27,000
8) the average collection period for receivables is computed by dividing 365 days by
a.net credit sales
b.average accounts receivable
c.ending accounts receivable
d.receivables turnover ratio
9) a $700,000 bond was retired at 98 when the carrying value of the bond was
$721,000. the entry to record the retirement would include a
a.gain on bond redemption of $21,000
b.loss on bond redemption of $21,000
c.loss on bond redemption of $35,000
d.gain on bond redemption of $35,000
10) which one of the following represents the expanded basic accounting equation?
a.assets = liabilities + common stock + dividends – revenue – expenses
b.assets + dividends + expenses = liabilities + common stock + revenues
c.assets – liabilities – dividends = common stock + revenues – expenses
d.assets = revenues + expenses – liabilities
11) based on the following data, what is the amount of working capital?
a.$254,000
b.$302,000
c.$340,000
d.$296,000
12) if $15,000 is deposited in a savings account at the end of each year and the account
pays interest of 5% compounded annually, what will be the balance of the account at
the end of 10 years?
a.$22,204
b.$157,500
c.$188,668
d.$207,000
13) which of the following is not a right or preference associated with preferred stock?
a.the right to vote
b.first claim to dividends
c.preference to corporate assets in case of liquidation
d.to receive dividends in arrears before common stockholders receive dividends
14) which of the following is an inventory costing method?
a.periodic
b.specific identification
c.perpetual
d.lower of cost or market
15) the following credit sales are budgeted by gonzalez company:
the companys past experience indicates that 80% of the accounts receivable are
collected in the month of sale, 20% in the month following the sale. the anticipated cash
inflow for the month of april is
a.$48,000
b.$56,000
c.$60,000
d.$62,000
16) when using the periodic system the physical inventory count is used to determine
a.only the sales value of goods in the ending inventory
b.both the cost of the goods in ending inventory and the sales value of goods sold
during the period
c.both the cost of the goods sold and the cost of ending inventory
d.only the cost of merchandise sold during the period
17) united services and supplies reports net income of $50,000 and cost of goods sold
of $300,000. us&ss gross profit rate was 40%, net sales were:
a.$500,000
b.$750,000
c.$800,000
d.$550,000
18) when customers make purchases with a national credit card, the retailer
a.is responsible for maintaining customer accounts
b.is not involved in the collection process
c.absorbs any losses from uncollectible accounts
d.receives cash equal to the full price of the merchandise sold from the credit card
company