The accountant for Darden Corp. was preparing a bank reconciliation as of April 30,
2014. The following items were identified:
In addition, Darden made an error in recording a customer’s check; the amount was
recorded in cash receipts as $150; the bank recorded the amount correctly as $510.
What amount will Darden report as its adjusted cash balance at April 30, 2014?
a. $44,650
b. $45,890
c. $46,110
d. $46,250
Which of the following statements is true?
a. Profits distributed to the creditors are called dividends.
b. The balance sheet shows the assets, liabilities, and profits of a company.
c. Dividends are an expense, and are reported on the income statement as a deduction
from net income.
d. The income statement reports the revenues and expenses of a company.
The following set of items describes activities completed by a company in purchasing
and paying for merchandise. For each activity, identify whether or not the activity
adheres to or violates sound internal control procedures. Extensions and footings on
purchase invoices are verified before the invoices are approved for payment
a. Adheres to sound internal control procedures
b. Violates sound internal control procedures
c. Neither strengthens nor violates internal control
A trial balance is a financial statement.
a. True
b. False
A company issued 5-year bonds with a par value of $35,000,000 and a 7% annual face
on January 2, 2015. The issue price of the bond issue was $35,216,127 which reflected
a 6.85% effective interest rate. REQUIRED: a) Determine the effect on the accounting
equation upon recording the issuance of the bonds. b) Determine the effect on the
accounting equation upon recording the recognition of interest expense at December 31,
2015. Any premium or discount should be amortized using the effective interest rate
method. c) Determine the effect on the accounting equation upon recording the interest
paid to the bondholders on January 2, 2016. d) Determine the effect on the accounting
equation upon recognizing the interest expense at December 31, 2016. Any premium or
discount should be amortized using the effective interest rate method.
Cash flows from operating activities usually relate to an increase or decrease in either a
current asset or a current liability.
a. True
b. False
All of the following are different expressions for net income except :
a. Profits
b. Excess of revenues over expenses
c. Capital
d. Earnings
For each of the following sentences, select the phrase or group of words that best
completes the statement.
a. Earnings per share
b. Dividend yield ratio
c. Dividend payout ratio
d. Leverage
e. Return on assets ratio
f. Return on common stockholders’ equity ratio
g. Debt-to-equity ratio
h. Price/earnings ratio
The relationship between dividends and the market price of a company’s stock.
Surge Company reports the following information at December 31, 2015:
What is Surge Company’s net income?
a. $ 15,000
b. $ 45,000
c. $ 55,000
d. $ 65,000
Which of the following will decrease working capital?
a. collection of accounts receivable
b. purchase of a new computer with cash
c. payment of salaries payable
d. purchase of merchandise on credit
In general, FASB standards concerning property, plant, and equipment are similar to the
international accounting standards, with two important differences.
a. True
b. False
Which internal control procedure is followed when storage areas are secured with
limited access?
a. Segregation duties
b. Safeguarding assets and records
c. Independent verifications
d. Proper authorizations
Valance & Company Use the selected data from the balance sheet and cash flow
statements for Valance & Company to answer the questions that follow. Valance &
Company
Balance Sheet
(Selected Information)
(in millions)
Valance & Company
Statements of Cash Flow
(Selected Information)
(in millions)
Refer to the data for Valance & Company.
REQUIRED: (1) Give a possible explanation for each change in the liabilities listed in
the cash flow statement. Do you think these changes are beneficial for Valance? Why or
why not? (2) If there were a balance in the dividends payable account at the end of the
year, would this appear in the operating activities category of the cash flow statement?
Why or why not?
Typically the classification known as readily available refers to investments that are
converted into cash in
_______________months or less.
Sales returns and allowances is a contraaccount.
Explain some of the differences in accounting for operating assets that exist between
U.S. GAAP and IFRS.
How should the gain or loss on the sale of the asset be presented on the income
statement?
During December, Filmore Inc. purchased $800 of supplies for use in its business. At
the end of December, 20% of the supplies were still on hand, but only 75% had been
paid. What amounts will appear on the company’s balance sheet on December 31?
Singer Corp. began the year with a balance in its Income Taxes Payable account of
$10,000. The year-end balance in the account was $15,000. The company uses the
indirect method in the Operating Activities section of the statement of cash flows.
Therefore, it presents the amount of income taxes paid at the bottom of the statement as
a supplemental disclosure. The amount of taxes paid during the year was $12,000. What
amount of income tax expense will appear on Singer’s income statement?
If the market value that you paid for a car is known and the annual payment and number
of payments is known, the table factor to help find the interest rate can be calculated by
dividing.
If the balance of prepaid insurance was the same on January 1, 2016, and December 31,
2016, then the insurance expense wouldthe cash payments made for insurance during
the year.
Marion Company sells on credit with terms of n/30. For the $800,000 of accounts at the
end of the year 2015 that are not overdue, there is a 92% probability of collection. For
the $300,000 of accounts that are less than a month past due, Marion estimates the
likelihood of collection going down to 75%. The probability of collecting the $150,000
of accounts more than a month past due is estimated to be 30%. REQUIRED: 1>
Prepare an aging schedule to estimate the amount of uncollectible accounts.
2> On the basis of the schedule in (1), prepare the journal entry as of December 31,
2015 to estimate bad debts. Assume that the credit balance in Allowance for Doubtful
Accounts is $30,000.
