The current assets of Orangette Company are $227,500. The current liabilities are
$130,000. The current ratio expressed as a proportion is
a.175%.
b.1.75:1.
c..57:1.
d.$210,000 / $120,000.
Aber Company buys land for $145,000 on 12/31/13. As of 3/31/14, the land has
appreciated in value to $152,000. On 12/31/14, the land has an appraised value of
$155,400. By what amount should the Land account be increased in 2014?
a.$0.
b.$7,000.
c.$3,400.
d.$10,400.
Which situation below might indicate a company has a low quality of earnings?
a.Revenue is recorded when recognized
b.Repair costs are capitalized and then depreciated.
c.The financial statements are prepared in accordance with generally accepted
accounting principles.
d.The same accounting principles are used each year.
Which of the following is not a current liability?
a.Salaries and Wages Payable
b.Accounts Payable
c.Taxes Payable
d.Bonds Payable
A company sells item on account with credit terms of 2/10, n/20. What is the meaning
of these terms?
a.An additional amount equal to 2 percent of the invoice price must be paid if payment
is not received within 10 days; the account is overdue after 20 days.
b.A 10 percent cash discount may be taken if payment is made immediately; a 2 percent
discount if paid within 20 days.
c.A 2 percent cash discount may be taken if payment is made within 10 days of the
invoice date; otherwise the full amount is due within 20 days.
d.A 10 percent cash discount may be taken if payment is made within 2 days of the
invoice date; otherwise the full amount is due in 20 days.
The collection of a $700 account beyond the 2 percent discount period will result in a
a.debit to Cash for $686
b.credit to Accounts Receivable for $700
c.credit to Cash for $700
d.debit to Sales Discounts for $14
Wang Company had the following transactions during 2013:
Sales of $10,800 on account
Collected $4,800 for services to be performed in 2014
Paid $3,100 cash in salaries for 2013
Purchased airline tickets for $600 in December for a trip to take place in 2014
What is Wang’s 2013 net income using accrual accounting?
a.$8,300
b.$13,100
c.$12,500
d.$7,700
Grayson Company purchased merchandise with an invoice price of $2,000 and credit
terms of 2/10, n/30. Assuming a 360 day year, what is the implied annual interest rate
inherent in the credit terms?
a.2%
b.12%
c.24%
d36%
Butler Company reported ending inventory at December 31, 2014 of $1,200,000 under
LIFO. It also reported a LIFO reserve of $210,000 at January 1, 2014, and $300,000 at
December 31, 2014. Cost of goods sold for 2014 was $4,600,000. If Butler Company
had used FIFO during 2014, its cost of goods sold for 2014 would have been
a.$4,900,000.
b.$4,690,000.
c.$4,510,000.
d.$4,300,000.
Hogan Industries had the following inventory transactions occur during 2014:
The company sold 102 units at $63 each and has a tax rate of 30%. Assuming that a
periodic inventory system is used, and operating expenses of $600, what is the
company’s after-tax income using LIFO? (rounded to whole dollars)
a.$944
b.$1,096
c.$767
d.$661
The interest on a $6,000, 6%, 90-day note receivable is
a.$360.
b.$180
c.$90.
d.$270.