1) a high receivables turnover ratio indicates
a.customers are making payments quickly
b.a large portion of the companys sales are on credit
c.many customers are not paying their receivables
d.the companys sales have increased
2) posting
a.should be performed in account number order.
b.accumulates the effects of journalized transactions in the individual accounts.
c.involves transferring all debits and credits on a journal page to the trial balance.
d.is accomplished by examining ledger accounts and seeing which ones need updating.
3) manner, inc. has 5,000 shares of 5%, 100 par value, noncumulative preference shares
and 20,000 ordinary shares with a 1 par value outstanding at december 31, 2011. there
were no dividends declared in 2010. the board of directors declares and pays a 45,000
dividend in 2011. what is the amount of dividends received by the ordinary
shareholders in 2011?
a.0
b.25,000
c.45,000
d.20,000
4) conway company purchased merchandise inventory with an invoice price of $8,000
and credit terms of 2/10, n/30. what is the net cost of the goods if conway company
pays within the discount period?
a.$8,000
b.$7,840
c.$7,200
d.$7,360
5) during january 2014, carey services inc. paid a cash dividends of $2,000. this
transaction
a.reduces stockholders’ equity by $2,000.
b.increases stockholders’ equity by $2,000.
c.reduces net income by $2,000.
d.increases expenses by $2,000.
6) crestwood department store had net credit sales of $13,000,000 and cost of goods
sold of $9,000,000 for the year. the average inventory for the year amounted to
$2,500,000. the inventory turnover ratio for the year is
a.3.6 times
b.5.2 times
c.3.0 times
d.1.4 times
7) if the equity method is being used, cash dividends received
a.are credited to the dividend revenue account
b.require no entry because investee net income has already been recorded at the proper
proportion on the investor’s books
c.are credited to the stock investments account
d.are credited to the revenue from investment in stock account
8) in a small business, the lack of certain separations of duties can best be overcome by
a.bonding the employees
b.getting the owner actively involved
c.hiring only honest employees
d.holding one person responsible for a given set of transactions
9) anders, inc has 5,000 shares of 5%, 100 par value, cumulative preference shares and
20,000 ordinary shares with a $1 par value outstanding at december 31, 2011. there
were no dividends declared in 2009. the board of directors declares and pays a 45,000
dividend in 2010 and in 2011. what is the amount of dividends received by the ordinary
shareholders in 2011?
a.15,000
b.25,000
c.45,000
d.0
10) harden corporation engaged in the following transaction. assume that the harden
corporation uses the indirect method to depict cash flows. indicate where, if at all, land
and building purchased with a mortgage would be classified on the statement of cash
flows.
a.operating activities section
b.investing activities section
c.financing activities section
d.does not represent a cash flow
11) a credit sale of $1,600 is made on april 25, terms 2/10, net/30, on which a return of
$100 is granted on april 28. what amount is received as payment in full on may 4?
a.$1,470
b.$1,568
c.$1,600
d$1,500
12) garza company owns 40% interest in the stock of kenney corporation. during the
year, kenney pays $30,000 in dividends to garza, and reports $150,000 in net income.
garza companys investment in kenney will increase by
a.$30,000
b.$60,000
c.$12,000
d.$48,000
13) in horizontal or trend analysis, each item is expressed as a(n)
a.amount
b.percentage
c.rate
d.amount or a percentage
14) amos real estate signed a four-month note payable in the amount of $12,000 on
september 1. the note requires interest at an annual rate of 9%. the amount of interest to
be accrued at the end of september is:
a.$360
b.$90
c.$1,080
d.$120
15) the usual sequence of steps in the transaction recording process is
a.journalize, analyze, post to the ledger.
b.analyze, journalize, post to the ledger.
c.journalize, post to the ledger, analyze.
d.post to the ledger, journalize, analyze.