A company starts the period with 100 computers in inventory, purchases 30 more,
returns 4 of them to suppliers, and has 83 in inventory at the end of the period. If there
is no shrinkage, how many computers were sold?
A) 47
B) 43
C) 17
D) 83
Use the information above to answer the following question. What is the adjusted
balance in the Accumulated Depreciation account at the end of 2017?
A) $3,200
B) $4,800
C) $9,600
D) $12,800
A company purchases a $300,000 building, paying $200,000 in cash and signing a
$100,000 promissory note. What will be reported on the statement of cash flows as a
result of this transaction?
A) A $300,000 cash outflow from investing activities
B) A $200,000 cash outflow from investing activities and a $100,000 cash inflow from
financing activities
C) A $200,000 cash outflow from investing activities and a $100,000 noncash
transaction
D) A $300,000 cash outflow from investing activities and a $100,000 cash inflow from
financing activities
A company started the year with the following: Assets $100,000; Liabilities $30,000;
Common Stock $60,000; Retained Earnings $10,000. During the year, the company
earned revenue of $5,000, all of which was received in cash, and incurred expenses of
$3,000, all of which were unpaid as of the end of the year. In addition, the company
paid dividends of $1,000 to owners. Assume no other activities occurred during the
year.
Use the information above to answer the following question. What was the amount of
net income for the year?
A) $2,000.
B) $1,000.
C) $3,000.
D) $5,000.
Vesuvius Company has net sales revenue of $780,000, cost of goods sold of $343,200,
net income of $119,200, and preferred dividends of $10,000 during the current year. At
the beginning of the year, 503,000 shares of common stock were outstanding, and, at
the end of the year, 537,000 shares of common stock were outstanding. A total of 1,000
preferred shares were outstanding throughout the year. The company’s earnings per
share for the current year is closest to:
A) $1.50.
B) $0.84.
C) $0.21.
D) $0.87.
All of the following are a part of contributed capital except:
A) Common Stock.
B) Additional Paid-in Capital.
C) Preferred Stock.
D) Retained Earnings.
Which of the following statements about the accounting standards used in other
countries is correct?
A) U.S. GAAP is used worldwide.
B) IFRS are used by all countries.
C) More and more countries are using IFRS.
D) There are no plans to converge U.S. GAAP with IFRS.
Research has found that three factors exist when fraud occurs. Which of the following
is not one of the three factors of the fraud triangle?
A) Incentive to commit fraud
B) Opportunity to commit fraud
C) Ability to rationalize the fraud
D) Lack of a code of ethics
Which of the following would not be reported on the income statement?
A) Utilities expense in the amount of a bill received for utilities used during the current
period but unpaid as of the end of the period.
B) Rent expense in the amount of rent paid during the period for use of a storage
facility in the current period.
C) Revenue in the amount of services provided to customers who promise to pay in the
next period.
D) Cost of land purchased with cash for future use.
Which of the following factors would cause the least amount of concern about a
company’s ability to continue as a going-concern?
A) Excessive reliance on debt financing
B) Loss of key personnel without comparable replacement
C) Inadequate maintenance of long-lived assets
D) Declining profit margins
For both accounts and amounts, the standard formatting for a journal entry lists:
A) credits first and then debits, both aligned to the left.
B) credits first and then debits, indented underneath.
C) debits first and then credits, both aligned to the right.
D) debits first and then credits, indented to the right underneath.
Your company purchases equipment for $2 million paying $300,000 in cash and issuing
$1.7 million in promissory notes. When the journal entry is posted to the related
accounts:
A) $2 million will be credited and $300,000 will be debited to asset accounts; $1.7
million will be debited to liability accounts.
B) $2 million will be debited to asset accounts; $2 million will be credited to liability
accounts.
C) $2 million will be debited and $300,000 will be credited to asset accounts; $1.7
million will be credited to liability accounts.
D) $2 million will be credited to asset accounts; $2 million will be debited to liability
accounts.
A company began the year with assets of $100,000 and liabilities of $75,000. During
the year assets increased by $12,000 and liabilities decreased by $9,000.
Use the information above to answer the following question. What is the amount of the
change in stockholders’ equity during the year?
A) $3,000 increase
B) $21,000 increase
C) $21,000 decrease
D) $3,000 decrease
Which of the following measures would assist in assessing the profitability of a
company?
A) Fixed asset turnover
B) Times interest earned ratio
C) Inventory turnover ratio
D) Debt-to-assets ratio
Which of the following terms does not mean the same as the others?
A) Tangible assets
B) Fixed assets
C) Property, plant, and equipment
D) Long-lived assets
Your company issues $500,000 in bonds at a price of 98. The journal entry used to
record the issuance will include a debit to:
A) Cash for $490,000, a debit to Discount on Bonds Payable for $10,000, and a credit
to Bonds Payable for $500,000.
B) Cash for $490,000, a debit to Discount on Bonds Payable for $10,000, and a credit
to Bonds Payable for $500,000.
C) Bonds Payable for $500,000, a credit to Discount on Bonds Payable for $10,000,
and a credit to Cash for $490,000.
D) Bonds Payable for $490,000, a debit to Discount on Bonds Payable for $10,000, and
a credit to Cash for $500,000.
Which of the following is calculated by dividing cost of goods sold by average
inventory and then dividing this result into 365 days?
A) Inventory turnover
B) Current ratio
C) Days to collect ratio
D) Days to sell ratio
When inventory is sold, the cost of the inventory is removed from inventory and
reported on a multistep the income statement as:
A) inventory expense.
B) cost of goods sold.
C) selling, general, and administrative expenses.
D) operating expenses.