Parks Company reported an increase of $370,000 in its accounts receivable during the
year 2015. The company’s statement of cash flows for 2015 reported $1 million of cash
received from customers. What amount of net sales must Parks have recorded in 2015?
a. $370,000
b. $1,000,000
c. $1,370,000
d. $630,000
Which of the following would be internal users of accounting information?
a. Customers and vendors
b. Employees and managers
c. Government and banks
d. Employees and customers
For which type of inventory would a company most likely use the specific identification
method?
a. Barbie dolls
b. Cartons of milk
c. Custom designed diamond rings
d. Gasoline in storage tanks at a gasoline station
The use of the allowance method is an attempt by accountants to match bad debts as an
expense with the revenue of the period in which a sale on credit takes place.
a. True
b. False
Squid Lips, Inc. wants to measure the relationship between profitability and the
investment made by stockholders. Squid Lips should use the
a. return on stockholders’ equity ratio.
b. earnings per share.
c. profit margin.
d. statement of retained earnings.
O’Bryan Company began the year with a balance of $18,000 in Salaries and Wages
Payable and ended the year with $11,000 in the account. Salaries and Wages Expense
for the period amounted to $91,000. Under the direct method, O’Bryan will report cash
payments for salaries and wages of:
a. $84,000
b. $102,000
c. $109,000
d. $98,000
Which of the following would appear on the balance sheet as a current liability?
a. A loss from an anticipated strike by employees.
b. Potential damages from possible explosions in a fireworks factory.
c. Premium offers in cereal boxes.
d. The possible loss from a lawsuit.
Provided below is a list of important users of accounting information.Below the list are
descriptions of a major need of each of the various users. Fill in the blank with the one
user group that is most likely to have the need described to the right of the blank. Some
user groups may be used more than once or not at all.
a. Stockholder
b. Company management
c. Supplier
d. Banker
e. Internal Revenue Service
f. Securities and Exchange Commission
g. Labor union The exact amount of profit on each product of the company.
All of the following are included in the acquisition cost of property, plant, and
equipment except :
a. transportation costs
b. taxes on the purchase
c. installation costs
d. maintenance costs
The payment of wages to employees is an internal event.
a. True
b. False
bonds may be retired by the issuing company before their specified due date.
A general ledger account that is supported by a subsidiary ledger is called a(n).
The present value and future value concepts are applied to measure the amount of
several accounts common in accounting. What are some accounts that are valued in this
manner?
Refer to the information for Carlton, Inc. How much of every dollar is gross profit for
2015?
A(n)results when cash is paid before the related amount is reported on the income
statement.