1) the following totals for the month of april were taken from the payroll register of
metz company.
the entry to record the payment of net payroll would include a
a.debit to salaries and wages payable for $12,107
b.debit to salaries and wages payable for $13,267
c.debit to salaries and wages payable for $12,267
d.credit to cash for $12,267
2) which of the following statements about treasury stock is true?
a.few corporations have treasury stock
b.purchasing treasury stock is done to eliminate hostile shareholder buyouts
c.companies acquire treasury stock to increase the number of shares outstanding
d.companies acquire treasury stock to decrease earnings per share
3) why do corporations generally invest in debt or equity securities?
a.they have excess cash
b.they want to generate earnings from investment income
c.they invest for strategic reasons
d.all of the above
4) a flower shop makes a large sale for $1,000 on november 30. the customer is sent a
statement on december 5 and a check is received on december 10. the flower shop
follows gaap and applies the revenue recognition principle. when is the $1,000
considered to be earned?
a.december 5
b.december 10
c.november 30
d.december 1
5) seaver company received a notice with its bank statement that the bank had collected
a note receivable for $15,000 plus $600 of interest. the bank had credited these amounts
to travis’s account less a collection fee of $20. seaver company had already accrued the
interest for this note on its books.
(a)how will these items affect seaver company’s bank reconciliation?
(b)prepare the journal entry that seaver company will make to record this information
on its books.
6) the interest charged on a $50,000 note payable, at the rate of 6%, on a 90-day note
would be
a.$3,000
b.$1,500
c.$750
d.$500
7) posting
a.transfers ledger transaction data to the journal.
b.normally occurs before journalizing.
c.accumulates the effects of journalized transactions in the individual accounts.
d.enters transaction data in the journal.
8) in performing a vertical analysis, the base for sales revenues on the income statement
is
a.net sales
b.sales
c.net income
d.cost of goods available for sale
9) if a company fails to adjust for accrued expenses, what effect will this have on that
month’s financial statements?
a.failure to make an adjustment does not affect the financial statements
b.expenses will be understated and net income and stockholders equity will be over-
stated
c.assets will be overstated and net income and stockholders equity will be under-stated
d.assets will be overstated and net income and stockholders equity will be overstated
10) an income statement
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
11) a corporation issues $300,000, 10%, 5-year bonds on january 1, 2012, for $287,400.
interest is paid annually on january 1. if the corporation uses the straight-line method of
amortization of bond discount, the amount of bond interest expense to be recognized in
december 31, 2012s adjusting entry is
a.$32,520
b.$30,000
c.$27,480
d.$2,520
12) unearned revenues are:
a.received and recorded as liabilities before they are earned
b.earned and recorded as liabilities before they are received
c.earned but not yet received or recorded
d.earned and already received and recorded
13) (a)what is the present value of $30,000 due 7 years from now, discounted at 8%?
(b)what is the present value of $70,000 due 5 years from now, discounted at 15%?
14) the following information pertains to lance company. assume that all balance sheet
amounts represent both average and ending balance figures. assume that all sales were
on credit.
what is the profit margin for this company?
a.40.0%
b.45.0%
c.17.5%
d.20.0%
15) which of the following statements is not true about a 2-for-1 split?
a.par value per share is reduced to half of what it was before the split
b.total contributed capital increases
c.the market price probably will decrease
d.a stockholder with ten shares before the split owns twenty shares after the split