1) a corporation purchases 10,000 shares of its own $10 par common stock for $25 per
share, recording it at cost. what will be the effect on total stockholders equity?
a.increase by $100,000
b.decrease by $250,000
c.increase by $250,000
d.decrease by $100,000
2) under the direct write-off method of accounting for uncollectible accounts, bad debts
expense is debited
a.when a credit sale is past due
b.at the end of each accounting period
c.whenever a pre-determined amount of credit sales have been made
d.when an account is determined to be uncollectible
3) a successful discount retail store such as kmart would probably have
a.a low inventory turnover
b.a high inventory turnover
c.zero profit margin
d.low volume
4) which of the following changes in retained earnings during a period will be reported
in the financing activities section of the statement of cash flows?
1>declaration and payment of a cash dividend during the period.
2>net income for the period.
a.1
b.2
c.neither 1 nor 2
d.both 1 and 2
5) a company receives $88, of which $8 is for sales tax. the journal entry to record the
sale would include a
a.debit to sales tax expense for $8
b.credit to sales tax payable for $8
c.debit to sales for $88
d.debit to cash for $80
6) piper pipes has the following inventory data:
assuming that a periodic inventory system is used, what is the cost of goods sold on a
lifo basis.
a.$7,328
b.$7,348
c.$15,392
d.$15,412
7) comparative balance sheets
a.are usually prepared for at least one year
b.are usually prepared for at least two years
c.do not show both dollar amount and percentage changes
d.do not show a comparison of total stockholders equity
8) sampson company’s accounting records show the following for the year ending on
december 31, 2012.
using the periodic system, the cost of goods purchased is
a.$280,210
b.$304,210
c.$308,610
d.$295,810
9) the effect of a stock dividend is to
a.decrease total assets and stockholders equity
b.change the composition of stockholders equity
c.decrease total assets and total liabilities
d.increase the book value per share of common stock
10) if the market interest rate for a bond is higher than the stated interest rate, the bond
will sell at:
a.a premium
b.a discount
c.par
d.both a and b correct
11) these financial statement items are for snyder corporation at year-end, july 31,
2012.
salaries and wages payable$ 2,580
salaries and wages expense48,700
utilities expense22,600
equipment21,000
accounts payable4,100
service revenue64,100
rent revenue8,500
notes payable (due 2014)1,800
common stock16,000
cash24,200
accounts receivable12,780
accumulated depreciation6,000
dividends5,000
depreciation expense4,000
retained earnings (beginning of the year)35,200
instructions
(a)prepare an income statement and a retained earnings statement for the year. snyder
corporation did not issue any new stock during the year.
(b)prepare a classified balance sheet at july 31.
12) the going concern assumption is inappropriate when
a.the business is just starting up
b.liquidation appears likely
c.market values are higher than costs
d.the business is organized as a proprietorship
13) which board(s) has(have) faced bitter opposition when working to implement fair
value measurement for financial instruments?
a.fasb, but not iasb
b.iasb, but not fasb
c.both fasb and iasb
d.neither fasb nor iasb