1) a $200 petty cash fund has cash of $32 and receipts of $172. the journal entry to
replenish the account would include
a.debit to cash for $172
b.credit to petty cash for $172
c.credit to cash over and short for $4
d.credit to cash for $172
2) on january 1, 2012, the newell corporation purchased 30% of the common stock
outstanding of the havlin corporation for $200,000. during 2012, the havlin corporation
reported net income of $80,000 and paid cash dividends of $40,000. the balance of the
stock investmentshavlin account on the books of newell corporation at december 31,
2012, is
a.$200,000
b.$240,000
c.$280,000
d.$212,000
3) the primary source of revenue for a wholesaler is
a.investment income
b.service revenue
c.the sale of merchandise
d.the sale of plant assets the company owns
4) if services are rendered for cash, then
a.assets will increase.
b.liabilities will increase.
c.stockholders equity will decrease.
d.liabilities will decrease.
5) gross profit does not appear
a.on a multiple-step income statement
b.on a single-step income statement
c.to be relevant in analyzing the operation of a merchandising company
d.on either a multiple-step or single-step income statement
6) a company purchased inventory as follows:
200 units at $20
300 units at $22
the average unit cost for inventory is
a.$20.00
b.$21.00
c.$21.20
d.$22.00
7) which one of the following would not be considered a liquidity ratio?
a.current ratio
b.inventory turnover ratio
c.current cash debt coverage ratio
d.return on assets ratio
8) schrock company purchases a new delivery van for $55,000. the sales taxes are
$4,000. the logo of the company is painted on the side of the van for $1,200. the vans
annual license is $120. the van undergoes safety testing for $220. what does schrock
record as the cost of the new van?
a.$60,540
b.$60,420
c.$59,000
d.$58,420
9) which of the following accounts has a normal debit balance?
a.accounts payable
b.prepaid rent
c.retained earnings
d.common stock
10) which of the following is an appropriate internal control activity for cash?
a.record keeping and custodianship over cash should be performed by the same person
b.banking facilities should be used as little as possible
c.all payments should be made with currency, not checks
d.the amount of cash on hand should be kept to a minimum
11) andreas fashions sold merchandise for $57,000 cash during the month of july.
returns that month totaled $1,200. if the companys gross profit rate is 40%, andreas will
report monthly net sales revenue and cost of goods sold of:
a.$57,000 and $34,200
b.$55,800 and $22,320
c.$55,800 and $33,480
d.$57,000 and $33,480
12) thayer company purchased a building on january 2 by signing a long-term
$4,200,000 mortgage with monthly payments of $38,500. the mortgage carries an
interest rate of 10 percent. the amount owed on the mortgage after the first payment will
be
a.$4,200,000
b.$4,196,500
c.$4,165,000
d.$4,161,500
13) the statement of cash flows
a.must be prepared on a daily basis
b.summarizes the operating, financing, and investing activities of an entity
c.is another name for the income statement
d.is a special section of the income statement
14) at december 31, 2011, before any year-end adjustments, janus company’s prepaid
insurance account had a balance of $2,400. it was determined that $1,000 of the prepaid
insurance had expired. the adjusted balance for prepaid insurance for the year would be:
a.$1,000
b.$1,400
c.$3,800
d.$2,400
15) wang company had the following transactions during 2011:
what is wangs 2011 net income using cash basis accounting?
a.$550
b.$1,150
c.$6,250
d.$850