Segregation of duties means that a company assigns responsibilities so that:
A) sufficient workers are available to cover all necessary jobs.
B) responsibilities for related activities are assigned to two or more people.
C) employees are restricted to jobs for which they have adequate training.
D) workers are divided into those who do the same tasks but on different days.
Before the closing entries are prepared, the Retained Earnings balance in the adjusted
trial balance is equal to the balance of that account:
A) at the beginning of the period.
B) after adding revenues and subtracting expenses but before subtracting dividends.
C) at the end of the period.
D) at the beginning of the next period.
The following additional information is available from the financial statements of
Hitchens Company:
What is the net cash provided by operating activities?
A) $263,000
B) $285,000
C) $396,000
D) $368,000
Cost of goods sold divided by average inventory is the calculation for which of the
following ratios?
A) Net profit margin ratio
B) Current ratio
C) Inventory turnover ratio
D) Fixed asset turnover ratio
A company had inventory on November 1 of 5 units at a cost of $20 each. On
November 2, the company purchased 10 units at $22 each. On November 5, the
company sold 8 units for $55 each. On November 6, the company purchased 6 units at
$25 each. The company uses a perpetual inventory system. Using the weighted average
method, what is the value of the ending inventory on November 30?(Round each per
unit cost to two decimal places and then round your answer to the nearest whole
dollar.)
A. $304
B. $404
C. $299
D. $280
Which of the following represent cash outflows from financing activities?
A) Distributing a stock dividend
B) Paying a bond’s face value at maturity
C) Issuing long-term bonds at a discount
D) Paying interest on promissory notes
Every financial statement should have “who, what, and when” in its heading. These
include the:
A) name of the person preparing the statement, the type of financial statement, and
when the financial statement was reported to the SEC.
B) name of the person preparing the statement, the name of the company, and the date
the statement was prepared.
C) name of the company, the type of financial statement, and the time period or date
from which the data were taken.
D) name of the company, the purpose of the statement, and when the financial statement
was reported to the IRS.
Nonrecurring items such as a loss from discontinued operations is reported on the
income statement:
A) net of income tax.
B) before income tax expense.
C) below the net income line.
D) Nonrecurring items are not subject to income taxes; therefore, they are not reported
on the income statement.
Employer payroll taxes:
A) represent the federal taxes withheld from the employees’ paychecks.
B) are the amounts paid by the employee.
C) are an added payroll expense beyond the wages and salaries earned by employees.
D) represent the FICA taxes withheld from employees’ paychecks.
On June 30, a company paid a premium of $2,400 for one year of insurance coverage,
which started on July 1. The company has a calendar year-end. Which of the following
statements about this situation is correct?
A) On June 30, Cash would be debited for $2,400.
B) Insurance Expense of $1,200 will be reported on the income statement for the year
ending December 31.
C) Prepaid Insurance of $200 will be reported on the balance sheet at December 31.
D) Prepaid Insurance of $2,400 will be reported on the balance sheet at December 31.