The primary purpose of financial accounting is to
A) supply information for external users’ decision making.
B) provide data for internal users’ decision making.
C) produce data for income taxes.
D) create an audit report.
E) organize the data for management.
Platak, Inc., acquired a silver mine for $4,000,000. The company’s survey estimates that
40,000 ounces of silver can be extracted from the mine, but environmental costs to
close the mine will be $1,000,000. In the first year of operations, 15,000 ounces of
silver were extracted. Platak, Inc., would recognize
A) depletion expense of $1,500,000.
B) depreciation expense of $1,500,000.
C) depletion expense of $1,875,000.
D) amortization expense of $1,875,000.
E) environmental expense of $1,000,000.
On May 1, 2011, Chickla Corporation’s balance sheet had the following information
available:
Total Assets $500,000
Total Liabilities $400,000
Total Stockholders’ Equity $100,000
During the month of May, Chickla Corporation earned revenues of $120,000 and
incurred expenses of $30,000. Dividends declared during May were $20,000. The
dividends will be paid in June. No other capital transactions occurred. What amount did
Chickla Corporation’s total stockholders’ equity increase by in May?
A) $90,000
B) $120,000
C) $100,000
D) $70,000
E) $190,000
Small firms use computer software systems such as ________ to process accounting
information quickly and efficiently.
A) ERP
B) Oracle
C) SAP
D) QuickBooks
E) H & R Block Tax Filer
Referring to Exhibit 5-1, what was the cash collected from customers by Cartell Paper
Products in 2012?
A) $138,000
B) $145,900
C) $147,600
D) $149,200
E) $157,200