Pharma Corp.
The data presented below for Pharma Corp. is for the year ended December 31, 2015:
See the data for Pharma Corp. If Pharma Corp. uses the aging of accounts receivable
approach to estimate its bad debts, what amount will be reported as bad debt expense
for 2015?
a. $12,700
b. $13,700
c. $14,000
d. $15,300
Which method assigns the same cost to all units whether sold or left in ending
inventory?
a. Specific identification
b. Weighted average cost
c. FIFO
d. LIFO
On July 1, 2015, Frank Corp. purchased $100,000 of 8% bonds at face value. Interest is
paid annually on June 30. If the accounting year for Frank ends at December 31, 2015,
what will be reported with respect to the bonds on that date?
a. The carrying value of the bonds will be $108,000.
b. The cash received in interest will be $8,000.
c. Interest income in the amount of $4,000 will be accrued.
d. A loss on the bonds will be reported in the Other Income and Expense section of the
2015 income statement until the entire amount of interest is paid on June 30, 2016.
Which of the following costs related to the purchase of production equipment incurred
by Newark Company during 2015 would be considered a revenue expenditure?
a. Installation costs for equipment
b. Purchase price of the equipment less the cash discount
c. Repair and maintenance costs during the equipment’s first year of service
d. Transportation charges to deliver the equipment to Newark Company
Which of the following items would not be a reconciling item?
a. Canceled checks
b. NSF checks
c. Outstanding checks
d. Deposits in transit
Moss Company Moss Company has provided the following information from its
accounting records for the current year:
Read the information for Moss Corporation. What are Moss’ current assets?
a. $ 100,000
b. $ 165,000
c. $ 210,000
d. $ 240,000
For each ratio listed, select whether an increase or decrease in the ratio is generally
considered to be better.
a. increase
b. decrease
Asset turnover ratio
Taryn Corporation The accountant for Taryn Corporation prepared the following list of
account balances from the company’s records for the year ended December 31, 2014:
Read the information for Taryn Corporation. Determine the following amounts for
Taryn Corporation. A) The balance of retained earnings at the end of 2014. B) The
total stockholders’equity at the end of 2014.
______________________ C) Name the two events that might
cause stockholders’ equity to increase.
Windstar Corp. purchased supplies at a cost of $6,000 during the year. At December 31,
supplies on hand are $1,400. Supplies expense for the year was $5,200. How much
were supplies on hand at January 1?
a. $ 2,200
b. $ 11,200
c. $ 1,400
d. $ 600
When selecting between the best alternatives regarding an ethical dilemma in
accounting all of the following should be considered except :
a. which alternative provides the most relevant information.
b. which alternative provides the most accurate information.
c. which alternative provides the most neutral information.
d. which alternative provides the most profitable information.
Relevant information can be quantitative or qualitative. In deciding whether to go to
college part-time or full-time, which of the following is a qualitative factor for a
student?
a. The cost of tuition
b. The opportunity to make friends
c. The price of football tickets
d. “Good Student” discounts on auto insurance rates.
In a compound interest problem, if you know the future value, the present value, and
the number of periods, then you can solve for the interest rate.
a. True
b. False
Eduardo’s Texas Cantina had the following results for December 31, 2015 and 2016,
respectively:
What was the amount of cash flows from investing activities for 2016?
a. Cash inflow of $378,000
b. Cash outflow of $378,000
c. Cash outflow of $7,000
d. Cash outflow of $391,000
The solution to this problem requires time value of money calculations. Reference to
Tables 9-1 through 9-4 in the text is necessary to complete the calculations. If you must
calculate the present value of an amount at 8% compounded quarterly for 2 years, then
the interest factor used in the calculation is
a. 8% for two periods
b. 2% for eight periods
c. the interest factor for 8% for two periods divided by 4
d. twice that for one period at 8% multiplied by 2
Several items from the financial statements of Standard Tires are listed below. Use the f
ollowing answer choices to identify the type of accountf
or each item listed. Place your answers in the space provided.
a. Assets
b. Liabilities
c. Revenues
d. Expenses
e. Owners’ equity Retained earnings