1) a nsf check should appear in which section of the bank reconciliation?
a.addition to the balance per books
b.deduction from the balance per bank
c.addition to the balance per bank
d.deduction from the balance per books
2) herman company received proceeds of 188,500 on 10-year, 8% bonds issued on
january 1, 2010. the bonds had a face value of 200,000, pay interest semi-annually on
june 30 and december 31, and have a call price of 101. herman uses the straight-line
method of amortization.
herman company decided to redeem the bonds on january 1, 2012. what amount of gain
or loss would herman report on its 2012 income statement?
a.9,200 gain
b.11,200 gain
c.11,200 loss
d.9,200 loss
3) during 2012, jennifer industries reported cash provided by operations of
$280,000,000, cash used in investing of $343,000,000, and cash used in financing of
$45,000,000. in addition, cash spent for fixed assets during the period was
$138,000,000. average current liabilities were $325,000,000 and average total liabilities
were $858,000,000. no dividends were paid. based on this information, what was
jennifer’s free cash flow?
a.($63,000,000)
b.$108,000,000
c.$142,000,000
d.($246,000,000)
4) hogan industries had the following inventory transactions occur during 2012:
the company sold 51 units at $63 each and has a tax rate of 30%. assuming that a
periodic inventory system is used, what is the companys gross profit using lifo?
(rounded to whole dollars)
a.$2,441
b.$2,365
c.$848
d.$772
5) a ledger
a.contains only asset and liability accounts.
b.is a collection of the entire group of accounts maintained by a company.
c.provides a chronological record of transactions.
d.should show accounts in alphabetical order.
6) an account consists of
a.a title, a debit balance, and a credit balance.
b.a title, a left side, and a debit balance.
c.a title, a debit side, and a credit side.
d.a title, a right side, and a debit balance.
7) garrison company issued $1,000,000, 7%, 20-year bonds on january 1, 2012, at 105.
interest is payable annually on january garrison uses straight-line amortization for bond
premium or discount.
instructions
prepare the journal entries to record the following events.
(a)the issuance of the bonds.
(b)the accrual of interest and the premium amortization on december 31, 2012.
(c)the payment of interest on january 1, 2013.
(d)the redemption of the bonds at maturity, assuming interest for the last interest period
has been paid and recorded.
8) erickson company had a $400 credit balance in allowance for doubtful accounts at
december 31, 2012, before the current year’s provision for uncollectible accounts. an
aging of the accounts receivable revealed the following:
instructions
(a)prepare the adjusting entry on december 31, 2012, to recognize bad debts expense.
(b)assume the same facts as above except that the allowance for doubtful accounts
account had a $400 debit balance before the current year’s provision for uncollectible
accounts. prepare the adjusting entry for the current year’s provision for uncollectible
accounts.
9) the preparation of adjusting entries is:
a.straightforward because the accounts that need adjustment will be out of balance
b.needed to ensure that the expense recognition principle is followed
c.only required for accounts that do not have a normal balance
d.optional when financial statements are prepared
10) management of cash is the responsibility of the company
a.accountant
b.president
c.treasurer
d.vice-president
11) which permits partial derecognition of receivables?
12) which one of the following would be considered a long-term solvency ratio?
a.receivables turnover
b.return on total assets
c.current cash debt coverage ratio
d.debt to total assets ratio
13) if total liabilities increased by $42,000 during a period of time and stockholders
equity decreased by $18,000 during the same period, then the amount and direction
(increase or decrease) of the periods change in total assets is a(n)
a.$42,000 increase
b.$60,000 increase
c.$24,000 decrease
d.$24,000 increase
14) pearson company bought a machine on january 1, 2012. the machine cost $108,000
and had an expected salvage value of $18,000. the life of the machine was estimated to
be 5 years. the depreciable cost of the machine is
a.$108,000
b.$90,000
c.$30,000
d.$18,000
15) the return on common stockholders equity is computed by dividing net income
a.by ending common stockholders equity
b.by average common stockholders equity
c.less preferred dividends by ending common stockholders equity
d.less preferred dividends by average common stockholders equity
16) at the beginning of the year, uptown athletic had an inventory of $400,000. during
the year, the company purchased goods costing $1,500,000. if uptown athletic reported
ending inventory of $600,000 and sales of $2,000,000, their cost of goods sold and
gross profit rate would be
a.$900,000 and 65%
b.$1,300,000 and 35%
c.$900,000 and 35%
d.$1,300,000 and 65%
17) which of the following would be deducted from the balance per bank on a bank
reconciliation?
a.outstanding checks
b.deposits in transit
c.notes collected by the bank
d.service charges
18) winrow company showed the following balances at the end of its first year:
what did winrow company show as total credits on its trial balance?
a.$27,500
b.$27,000
c.$26,500
d.$28,000