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1) keller, inc. has the following partial balance sheet:
what effect will it have on comprehensive income?
a.no effect on comprehensive income
b.increase of $1,000,000 in comprehensive income
c.increase of $9,000,000 in comprehensive income
d.decrease of $1,000,000 in comprehensive income
2) if a business pays rent in advance and debits a prepaid rent account, the company
receiving the rent payment will credit:
a.cash
b.prepaid rent
c.unearned rent revenue
d.accrued rent revenue
3) notes to the financial statements include all of the following except:
a.descriptions of significant accounting policies used
b.explanations of uncertainties
c.quantifiable accounting information
d.statistics needed to understand the statements
4) a system of internal control
a.is infallible
b.can be rendered ineffective by employee collusion
c.invariably will have costs exceeding benefits
d.is premised on the concept of absolute assurance
5) cindy cane corporation has income before taxes of $800,000 and an extraordinary
gain of $200,000. if the income tax rate is 25% on all items, the income statement
should show income before irregular items and extraordinary items, respectively, of
a.$650,000 and $200,000
b.$650,000 and $150,000
c.$600,000 and $200,000
d.$600,000 and $150,000
6) the cash receipts section of a cash budget includes all of the following except
a.cash sales
b.collections from customers
c.receipts of interest and dividends
d.expected borrowings
7) pop-up party favors inc has the following inventory data:
a physical count of merchandise inventory on july 30 reveals that there are 40 units on
hand. using the fifo inventory method, the amount allocated to ending inventory for july
is
a.$780
b.$820
c.$800
d.$760
8) in order for accounting information to be relevant, it must
a.have very little cost
b.help predict future events or confirm prior expectations
c.not be reported to the public
d.be used by a lot of different firms
9) the primary source used in the preparation of the financial statements is the:
a.trial balance
b.post-closing trial balance
c.general trial balance
d.adjusted trial balance
10) fisher co. purchased 50, 6% hannigan company bonds for $50,000 cash plus
brokerage fees of $500. interest is payable semiannually on july 1 and january 1. the
entry to record the december 31 interest accrual would include a
a.debit to interest receivable for $1,500
b.debit to interest revenue for $1,500
c.credit to interest revenue for $1,515
d.debit to debt investments for $1,500
11) treasury stock is a(n)
a.contra asset account
b.retained earnings account
c.asset account
d.contra stockholders equity account
12) the custodian of a company asset should
a.have access to the accounting records for that asset
b.be someone outside the company
c.not have access to the accounting records for that asset
d.be an accountant
13) retained earnings at the end of the period is equal to
a.retained earnings at the beginning of the period plus net income minus liabilities
b.retained earnings at the beginning of the period plus net income minus dividends
c.net income
d.assets plus liabilities
