Which of the following statements about an auto manufacturer’s inventory is not
correct?
A) Tires, batteries, glass, paint, headlamp bulbs, and electric wiring would be included
in raw materials inventory.
B) Incomplete cars that are still being processed would be included in work in process
inventory.
C) Finished cars ready to be shipped to dealers would be included in finished goods
inventory.
D) Cars that have been sold to dealers would be included in finished goods inventory.
On December 31, 2015, Infinity Inc. records an adjusting entry to accrue interest on a
note. On January 31, 2016, Infinity receives a check for $4,680, which represents two
months of accumulated interest on the note. Upon receipt of this interest payment,
Infinity should debit:
A) Interest Receivable for $2,340, debit Cash $2,340, and credit Interest Revenue for
$4,680.
B) Cash for $4,680, credit Interest Receivable for $2,340, and credit Interest Revenue
for $2,340.
C) Cash for $4,680 and credit Interest Receivable for $4,680.
D) Cash for $4,680 and credit Interest Revenue for $4,680.
Which of the following accounts would be classified as a current liability on a classified
balance sheet?
A) Service Revenue
B) Salaries and Wages Expense
C) Accumulated Depreciation
D) Interest Payable
Use the information above to answer the following question. What is the issue price of
these bonds?
A) $300,000
B) $285,000
C) $315,000
D) $330,000
The purchase of $100,000 of equipment by issuing a note would be reported:
A) as a $100,000 investing inflow, and a $100,000 financing outflow.
B) as a$100,000 investing outflow, and a $100,000 financing inflow.
C) as a $100,000 operating inflow, and a $100,000 financing outflow.
D) in a supplementary schedule.
Which of the following would not be classified as a current asset?
A) Cash
B) Accounts Payable
C) Supplies
D) Inventory
When a petty cash fund is in use:
A) expenses paid with petty cash are recorded when the fund is replenished.
B) Petty Cash is debited when funds are replenished.
C) Petty Cash is credited when funds are replenished.
D) expenses are not recorded.
All of the following are requirements of the Sarbanes-Oxley Act (SOX) except:
A) evaluation and reporting on the effectiveness of internal control over financial
reporting by management for all public companies.
B) evaluation and reporting on the effectiveness of internal control over financial
reporting by external auditors only for large public companies.
C) establishment of an audit committee of independent directors to ensure the
company’s accounting, internal control, and audit functions are effective.
D) adoption of a code of ethics covering all employees.
Transport Inc. has a fleet of 10 large trucks that cost a total of $1,410,000. The fleet is
expected to be driven a total of 1,000,000 miles during its estimated 10-year life and be
sold for $141,000 at the end of its useful life. If the fleet was driven 125,000 miles
during the current year, what is the amount of depreciation that would be calculated
using the straight-line and units-of-production methods, respectively?
A) $158,625 and $141,000
B) $141,000 and $158,625
C) $126,900 and $176,250
D) $126,900 and $158,625
Which of the following statements about the Allowance for Doubtful Accounts is
correct?
A) The Allowance for Doubtful Accounts is credited when a specific write-off is
recorded.
B) Under the aging of accounts receivable method, Bad Debt Expense is calculated and
then added to the beginning balance in the Allowance for Doubtful Accounts.
C) The Allowance for Doubtful Accounts is a contra-revenue account.
D) The Allowance for Doubtful Accounts has a normal credit balance.
The following amounts were reported by the two companies:
Required:
Part a. Calculate each company’s net profit margin expressed as a percent.
Part b Which company has generated a greater return of profit from each revenue
dollar?
Most companies pay salaries and wages to employees through EFTs, which are known
by
employees as:
A) direct deposits.
B) vouchers.
C) remittance advices.
D) checks.
Use the information above to answer the following question. Based on the activities
above, as a result of these transactions during 2015, the law firm’s stockholders’ equity
will:
During 2015, Maverick Law Firm had the following transactions with it clients
(customers):
-On February 1, 2015, the company received cash of $5,000 from clients in payment of
their account balances as of December 31, 2014.
-On November 1, 2015, the company received $2,000 cash as payments in advance for
law services to be performed in 2016.
-The company received a total of $13,000 in cash for law services that were performed
during 2015.
-The company sent bills totaling $4,000 to clients for services performed during 2015;
this amount was unpaid as December 31, 2015.
A) increase by $20,000.
B) decrease by $5,000.
C) increase by $17,000.
D) decrease by $2,000.
A trend analysis to determine a year-to-year dollar amount change is calculated by
subtracting the:
A) previous period amount from the current amount.
B) current period amount from the previous period amount.
C) current period amount from the previous period amount and then dividing the result
by the previous period amount.
D) previous period amount from the current period amount and then dividing the result
by the current period amount.
Which of the following statements about financial statements is not correct?
A) Cash flows from financing activities would appear on the Statement of Cash Flows.
B) Dividends would appear on the Statement of Retained Earnings.
C) Assets would appear on the Income Statement.
D) Revenues would appear on the Income Statement.