1) if a business has received cash in advance of services performed and credits a
liability account, the adjusting entry needed after the services are performed will be:
a.debit unearned revenue and credit cash
b.debit unearned revenue and credit revenue earned
c.debit unearned revenue and credit prepaid expense
d.debit unearned revenue and credit accounts receivable
2) a journal
a.contains only asset and liability accounts.
b.is a collection of the entire group of accounts maintained by a company.
c.provides a chronological record of transactions.
d.should show accounts in alphabetical order.
3) marley corporation had net income of $250,000 and paid dividends to common
stockholders of $50,000 in 2012. the weighted average number of shares outstanding in
2012 was 50,000 shares. reese corporation’s common stock is selling for $30 per share
on the new york stock exchange. reese corporation’s payout ratio for 2012 is
a.$5 per share
b.25%
c.20%
d.12.5%
4) these selected condensed data are taken from a recent balance sheet of sanson
company (in millions of dollars).
additional information: current liabilities at the beginning of the year were $35.6
million.
what are (a) the working capital, and (b) the current ratio?
5) solvency is of most interest to
a.short-term creditors
b.stockholders
c.competitors
d.long-term creditors
6) for 2012 fielder corporation reported net income of $30,000; net sales $400,000; and
average share outstanding 12,000. there were no preferred stock dividends. what was
the 2012 earnings per share?
a.$2.33
b.$0.40
c.$33.33
d.$2.50
7) the debt to total assets ratio measures
a.the company’s profitability
b.whether interest can be paid on debt in the current year
c.the proportion of interest paid relative to dividends paid
d.the percentage of the total assets provided by creditors
8) evidence that would not help with determining the effects of a transaction on the
accounts would be a(n)
a.cash register sales tape.
b.bill.
c.advertising brochure.
d.check.
9) selected data for patrick store appear below.
instructions
compute the following for 2012:
(a)gross profit percentage
(b)inventory turnover
(c)receivables turnover
10) which of the following statements concerning the statement of cash flows is true?
a.the statement of cash flows is usually more accurate when using the indirect method
b.if the direct method is used, a supplementary schedule reconciling the net income to
net cash from operating activities must still be provided
c.the statement of cash flows reflects both earnings per share and cash per share
d.the statement of cash flows is an optional financial statement for external reporting
purposes
11) identify the internal control procedures applicable to cash receipts for colorado
company in each of the following situations.
1> all cashiers are bonded.
2> the treasurer compares the total cash receipts to the bank deposit daily.
3> the bookkeeper records cash receipts which are held by the treasurer.
4> only the treasurer holds cash receipts.
5> deposit slips are completed for each deposit.
12) the ______________ method tracks the actual physical flow of each unit of
inventory available for sale; however, management may be able to manipulate
______________ by using this method.
13) distinguish among the three activities reported in the statement of cash flows.
14) you are the accountant for a small manufacturing firm. your company is privately
held, so there is no current requirement to issue financial statements using gaap. you
were hired four years ago, and at that time you instituted a cash budgeting system.
presently, you prepare a schedule of predicted cash sources and cash needs at the end of
each week for the following week.
gary scribner, the company’s president, has asked whether a statement of cash flows
would also be useful.
prepare a short memorandum to the president indicating whether you believe such an
addition to the financial statements to be useful. include in your memo the benefits that
might be expected from a statement of cash flows and whether those are different from
the benefits of a cash sources and cash needs listing.
15) a current liability is a debt that can be expected to be paid within ____________
year(s) or the ______________, whichever is longer.
16) if disposal of a plant asset occurs at any time during the year,
___________________ for the fraction of the year to the date of disposal must be
recorded.
17) doane company receives a $5,000, 3-month, 6% promissory note from ray company
in settlement of an open accounts receivable. what entry will doane company make
upon receiving the note?
18) the following data exists for mather company.
calculate the receivable turnover ratio and the average collection period for accounts
receivable in days for 2012.