1) during february 2014, its first month of operations, the owner of schwenn enterprises
invested cash of $40,000. schwenn had cash sales of $8,000 and paid expenses of
$14,000. assuming no other transactions impacted the cash account, what is the balance
in cash at february 28?
a.$6,000 credit
b.$34,000 debit
c.$48,000 debit
d.$26,000 credit
2) garcia company is about to issue $300,000 of 8-year bonds paying a 12% interest
rate with interest payable semiannually. the discount rate for such securities is 10%.
below are time value of money factors that garcia uses to calculate compounded
interest.
to the closest dollar, how much can garcia expect to receive for the sale of these bonds?
a.$319,339
b.$229,371
c.$332,513
d.$540,000
3) which of the following is not generally an accounting time period?
a.a week
b.a month
c.a quarter
d.a year
4) the following information was taken from hurlbert company cash budget for the
month june
if the company has a policy of maintaining end of the month cash balance of $20,000,
the amount the company would have to borrow is
a.$12,000
b.$5,000
c.$8,000
d.$0
5) which of the following statements concerning users of accounting information is
incorrect?
a.management is considered an internal user
b.present creditors are considered external users
c.regulatory authorities are considered internal users
d.taxing authorities are considered external users.
6) the following information is related to december 31, 2011 balances.
during 2012 sales on account were $435,000 and collections on account were $258,000.
also during 2012 the company wrote off $24,000 in uncollectible accounts. an analysis
of outstanding receivable accounts at year end indicated that bad debts should be
estimated at $162,000. the change in the cash realizable value from the balance at
12/31/11 to 12/31/12 was a
a.$150,000 increase
b.$177,000 increase
c.$126,000 increase
d.$153,000 increase
7) dividends are predominantly paid in
a.scrip
b.property
c.cash
d.stock
8) the closing entry process consists of closing:
a.all asset and liability accounts
b.out the retained earnings account
c.all permanent accounts
d.all temporary accounts
9) all of the following are examples of internal control procedures except
a.using prenumbered documents
b.reconciling the bank statement
c.customer satisfaction surveys
d.insistence that employees take vacations
10) three accounting issues associated with accounts receivable are
a.depreciating, returns, and valuing
b.depreciating, valuing, and collecting
c.recognizing, valuing, and accelerating collections
d.accrual, bad debts, and accelerating collections
11) additions and improvements
a.occur frequently during the ownership of a plant asset
b.normally involve immaterial expenditures
c.increase the companys investment in productive facilities
d.typically only benefit the current accounting period
12) joe pierce has been offered the opportunity of investing $178,556.90 now. the
investment will earn 8% per year and at the end of its life will return $500,000 to joe.
how many years must joe wait to receive the $500,000?
a.1011
b.1112
c.1213
d.1314
13) finney company began the year by issuing $20,000 of common stock for cash. the
company recorded revenues of $185,000, expenses of $160,000, and paid dividends of
$10,000. what was finneys net income for the year?
a.$15,000
b.$35,000
c.$25,000
d.$45,000
14) under international financial reporting standards (ifrs)
a.the cash-basis method of accounting is accepted
b.events are recorded in the period in which the event occurs
c.interim period financial statements are either a calendar year or a fiscal year
d.a fiscal year is an accounting time period encompassing less than 12 months
15) the following totals for the month of april were taken from the payroll register of
noll company.
the entry to record the accrual of federal unemployment tax would include a
a.credit to federal unemployment taxes payable for $128
b.debit to federal unemployment taxes expense for $128
c.credit to payroll tax expense for $128
d.debit to federal unemployment taxes payable for $128
16) using accrual accounting, expenses are recorded and reported only:
a.when they are incurred whether or not cash is paid
b.when they are incurred and paid at the same time
c.if they are paid before they are incurred
d.if they are paid after they are incurred
17) the book value of an asset will equal its fair market value at the date of sale if
a.a gain on disposal is recorded
b.no gain or loss on disposal is recorded
c.the plant asset is fully depreciated
d.a loss on disposal is recorded
18) if a company fails to adjust a prepaid rent account for rent that has expired, what
effect will this have on that month’s financial statements?
a.failure to make an adjustment does not affect the financial statements
b.expenses will be overstated and net income and stockholders equity will be under-
stated
c.assets will be overstated and net income and stockholders equity will be understated
d.assets will be overstated and net income and stockholders equity will be overstated
19) financial information is presented below:
the profit margin ratio would be
a..16
b..14
c..09
d..10
20) the equity method should generally be used to account for an investment in stock
when the level of ownership is
a.less than 10%
b.between 10% and 20%
c.between 20% and 50%
d.10% or more