1) the companys policy toward dividends and growth could best be determined by
examining the
a.balance sheet
b.income statement
c.retained earnings statement
d.statement of cash flows
2) a high receivables turnover ratio indicates
a.the companys sales are increasing
b.a large proportion of the companys sales are on credit
c.customers are making payments very quickly
d.customers are making payments slowly
3) farmington corporation issued $4,000,000, 10-year bonds and agreed to make annual
sinking fund deposits of $310,000. the deposits are made at the end of each year into an
account paying 6% annual interest. farmington has the following values related to the
time value of money and compounded interest decisions.
to the closest dollar, what amount will be in the sinking fund at the end of 10 years?
a.$2,233,560
b.$2,281,628
c.$4,086,045
d.$6,400,000
4) johnson company has a high inventory turnover that has increased over the last year.
all of the following statements are true regarding this situation except johnson county:
a.is minimizing funds tied up in inventory
b.is increasing the amount of inventory on hand relative to sales
c.may be losing sales due to inventory shortages
d.has a cost of goods sold that is increasing relative to its average inventory
5) windsor corporation sells its goods on terms of 2/10, n/30. it has a receivables
turnover ratio of 7. what is its average collection period (days)?
a.70
b.30
c.52
d.210
6) the common characteristic possessed by all assets is
a.long life
b.great monetary value
c.tangible nature
d.future economic benefit
7) the balance in the prepaid rent account before adjustment at the end of the year is
$12,000 and represents three months rent paid on december 1. the adjusting entry
required on december 31 is:
a.debit prepaid rent, $4,000; credit rent expense $4,000
b.debit prepaid rent, $8,000; credit rent expense, $8,000
c.debit rent expense, $12,000; credit prepaid rent, $12,000
d.debit rent expense, $4,000; credit prepaid rent, $4,000
8) delightful discs has the following inventory data:
a physical count of merchandise inventory on november 30 reveals that there are 100
units on hand. ending inventory under lifo is
a.$876
b.$842
c.$1,692
d.$1,726
9) earnings available to common stockholders is equal to:
a.total revenues
b.net income + preferred stock dividends
c.preferred stock dividends net income
d.net income preferred stock dividends
10) the cash records of grayson company show the following:
1>in february, deposits per the bank statement totaled $37,700; deposits per books
$39,000; and deposits in transit at february 28 were $3,550.
2>in february cash disbursements per books were $37,500; checks clearing the bank
were $36,800; and outstanding checks at february 28 were $2,500.
there were no bank debit or credit memoranda and no errors were made by either the
bank or grayson company.
answer the following questions:
(a)what were the deposits in transit at january 31?
(b)what were the outstanding checks at january 31?
11) the operating expenses section of an income statement for a merchandising
company would not include
a.freight-out
b.utilities expense
c.cost of goods sold
d.insurance expense