1) the classification and normal balance of the dividends account is
a.revenue with a credit balance.
b.an expense with a debit balance.
c.a liability with a credit balance.
d.stockholders equity with a debit balance.
2) butler company reported ending inventory at december 31, 2012 of $1,200,000 under
lifo. it also reported a lifo reserve of $210,000 at january 1, 2012, and $300,000 at
december 31, 2012. cost of goods sold for 2012 was $4,100,000. if butler company had
used fifo during 2012, its cost of goods sold for 2012 would have been
a.$4,400,000
b.$4,190,000
c.$4,010,000
d.$3,800,000
3) which of the following is not necessary to know in computing the future value of an
annuity?
a.amount of the periodic payments
b.interest rate
c.number of compounding periods
d.year the payments begin
4) which of the following companies would be most likely to use a perpetual inventory
system?
a.grain company
b.beauty salon
c.clothing store
d.fur dealer
5) the following information was taken from molina company cash budget for the
month of
if the company has a policy of maintaining an end-of-the-month cash balance of
$40,000, the amount the company would have to borrow is
a.$22,000
b.$0
c.$14,000
d.$40,000
6) liquidity ratios measure a company’s
a.operating cycle
b.revenue-producing ability
c.short-term debt paying ability
d.long-range solvency
7) on january 1, mccarver corporation had 800,000 shares of $10 par value common
stock outstanding. on march 31 the company declared a 10% stock dividend. market
value of the stock was $15/share. as a result of this event,
a.mccarvers paid-in capital in excess of par value account increased $400,000
b.mccarvers total stockholders equity was unaffected
c.mccarvers stock dividends account increased $1,200,000
d.all of the above
8) on january 1, hamblin corporation had 80,000 shares of $10 par value common stock
outstanding. on march 17 the company declared a 10% stock dividend to stockholders
of record on march 20. market value of the stock was $13 on march 17. the entry to
record the transaction of march 17 would include a
a.credit to stock dividends for $24,000
b.credit to cash for $104,000
c.credit to common stock dividends distributable for $80,000
d.debit to common stock dividends distributable for $80,000
9) if a check correctly written and paid by the bank for $471 is incorrectly recorded on
the companys books for $417, the appropriate treatment on the bank reconciliation
would be to
a.add $54 to the books balance
b.subtract $54 from the books balance
c.deduct $54 from the banks balance
d.deduct $471 from the books balance
10) equipment that cost $54,000 and on which $45,000 of accumulated depreciation has
been recorded was disposed of for $13,500 cash. the entry to record this event would
include a
a.gain of $4,500
b.loss of $4,500
c.credit to the equipment account for $13,500
d.credit to accumulated depreciation for $45,000