Archives: Quiz

Odell invents ‘Profits Unbound,’ new stock-trading algorithm software, and applies for a patent. If Odell is granted a patent, his invention will be protected a. for ten years. b. for twenty years. c. for the life of the inventor plus […]

Dave and Ellen enter into a contract via e-mail. When a dispute arises over the performance of the deal, Dave files a suit against Ellen. The emerging body of law that governs transactions conducted via the Internet is referred to […]

HVAC Heating & Air Conditioning, Inc., is a public company whose shares are traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002, to ensure that HVAC’s financial results are accurate and timely, the firm’s senior officers must […]

Kari, a real estate agent, assures Linc that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Linc buys the property and then discovers that the street has no more traffic than any […]

The Association of Organic Food Producers, which does not include all organic farmers and ranchers, refuses to deal with any parties who do not carry the products of its members. This group boycott is a. a situation that neither restrains […]

The U.S. Food Safety and Inspection Service conducts searches of certain businesses. This agency and other administrative agencies can conduct warrantless searches in a. all industries. b. highly regulated industries. c. no industries. d. newly regulated industries only. Answer: Milo […]

Liu enters Mountain Triathlon, an athletic competition in which Liu has never competed. Regarding the risk of injury, Liu assumes the risks a. attributable to the triathlon in any way. b. different from the risks normally associated with the triathlon. […]

The Long-haul Truckers Association wants the federal government to spend funds to build a new highway. Congress can spend revenues a. only to carry out its enumerated powers. b. to promote any objective that it deems worthwhile. c. as long […]

Ambrose enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery. If Ambrose breaches the contract, Belle Vista’s remedy would most likely be a. a certain ratio of the amount that […]

Neville files a suit against Olina. If Olina fails to respond, a. Neville must appeal the case to a different court. b. Olina’s failure to respond will be considered to be a denial. c. Neville will not be awarded the […]

Gold & Sweet Company bottles and sells maple syrup from its plant in Vermont. On the labels is a logo that states ‘100% Genuine New England Maple Syrup Certified by the Northeast Maple Syrup Harvesters Association.’ This logo is a. […]

SmartPhone Company’s ad states that its product is ‘The Best that Money Can Buy.’ Because of this ad, the Federal Trade ComÂmission is most likely to issue a. a cease-and-desist order. b. a counteradvertising order. c. a multiple product order. […]

During a dispute with Musicale Productions Inc., National Stagehands Union asks the National Labor Relations Board (NLRB) for a ruling. The NLRB rules against Musicale. The employer may appeal the decision to a. the appropriate state court. b. the appropriate […]

The operations of Commercial Concrete, Inc., are major sources of air polluÂtion. These operations must use a. the absolutely cleanest air technology. b. the best available filter technology. c. the maximum achievable control technology. d. the most affordable scrubbing technology. […]

Island Breeze Company designs and makes desk, window, and ceiling fans. In a product liability suit based on negligence, Island Breeze could be liable for vioÂlating its duty of care with respect to all of the following except a. the […]

Nguyen has her family buy and ship textbooks legally produced in Vietnam to her for resale in the United States. The U.S. owners of the copyrights on the items file a suit against Nguyen, alleging infringement. Applying a decision of […]

Blayne is an employee of Chemical Refinery, Inc. Blayne is threatened with a discharge when he refuses a transfer to a Chemical Refinery department in which several employees suffered serious injuries from exposure to hazardous chemicals. Blayne may be entitled […]

Michael, a citizen of Ireland, and Nina, a citizen of the United States, enter into a contract. When Nina breaches the contract, Michael obtains an award of damages in an Irish court. He asks a U.S. court to enforce the […]

The employees of Slaughterhouse Corporation designate Meatpackers Union as their bargaining representative. Slaughterhouse refuses to bargain with the union. This violates a. federal labor law. b. federal elections law. c. federal employment discrimination law. d. no federal law. Answer: Corporate […]

Helene, a disabled person, applies for a job at Industrial Engineering Applications Inc. for which she is well qualiÂfied, but for which she is rejected. Industrial Engineering continues to seek applicants and eventually fills the posiÂtion with a person who […]

Street Bikes, Inc., makes and sells a bicycle to Theo. Street Bikes fails to exercise ‘due care’ to make the bicycle safe, however, and Theo is injured as a result. Street Bikes is most likely liable for a. market-share liability. […]

Credit terms of 2/10, n/30 mean that a. a 10% cash discount may be taken if payment is made immediately; a 2% discount if paid within 30 days. b. a 2% cash discount may be taken if payment is made […]

The carrying value of bonds will equal the market price a. at the close of every trading day. b. at the end of the fiscal period. c. on the date of issuance. d. every six months on the date interest […]

The amortization period for a patent cannot exceed a. 50 years. b. 40 years. c. 20 years. d. 10 years. Answer: Bank errors a. occur because of time lags. b. must be corrected by debits. c. are infrequent in occurrence. […]

The use of computers in recording business events a. has made the recording process more efficient. b. does not use the same principles as manual accounting systems. c. has greatly impacted the identification stage of the accounting process. d. is […]

The market value (present value) of a bond is a function of all of the following except the a. dollar amounts to be received. b. length of time until the amounts are received. c. market rate of interest. d. length […]

A basic assumption of accounting that requires activities of an entity be kept separate from the activities of its owner is referred to as the a. stand alone concept. b. monetary unit assumption. c. corporate form of ownership. d. economic […]

Generally accepted accounting principles are a. income tax regulations of the Internal Revenue Service. b. standards that indicate how to report economic events. c. theories that are based on physical laws of the universe. d. principles that have been proven […]

An expense is recorded under the cash basis only when a. services are performed. b. it is earned. c. cash is paid. d. it is incurred. Answer: Which one of the following would not cause a bank to debit a […]

Which one of the following is usually performed only at the end of a company’s annual accounting period? a. Preparing financial statements b. Journalizing and posting adjusting entries c. Journalizing and posting closing entries d. Preparing an adjusted trial balance […]

Jack’s, a popular pizza hang-out, has a thriving delivery business. Jack’s has a fleet of three delivery automobiles. Prior to making the entry for this year’s depreciation expense, the subsidiary ledger for the fleet is as follows: Instructions (a) Determine […]

If the equity method is being used, the Revenue from Stock Investments account is a. just another name for a Dividend Revenue account. b. credited when dividends are declared by the investee. c. credited when net income is reported by […]

A debit to an asset account indicates a. an error. b. a credit was made to a liability account. c. a decrease in the asset. d. an increase in the asset. Answer: Lester Company sells many products. Hackenberry is one […]

Quayle Mining Company purchased land containing an estimated 15 million tons of ore at a cost of $4,200,000. The land without the ore is estimated to be worth $600,000. The company expects to operate the mine for 12 years. Buildings […]

The standard format of a journal would not include a. a reference column. b. an account title column. c. a T-account. d. a date column. Answer: The stockholders’ equity section of Barrel Corporation’s balance sheet at December 31, 2014, appears […]

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 Answer: Flite Corporation has […]

A separate paid-in capital account is used to record each of the following except the issuance of a. no-par stock. b. par value stock. c. stated value stock. d. treasury stock above cost. Answer: The following exhibit is for Kmart […]

The SEC and FASB are two organizations that are primarily responsible for establishing generally accepted accounting principles. It is true that a. they are both governmental agencies. b. the SEC is a private organization of accountants. c. the SEC often […]

Which of the following is not true of the terms debit and credit? a. They can be abbreviated as Dr. and Cr. b. They can be interpreted to mean increase and decrease. c. They can be used to describe the […]

Using the percentage-of-receivables basis, the uncollectible accounts for the year is estimated to be $38,000. If the balance for the Allowance for Doubtful Accounts is a $7,000 credit before adjustment, what is the amount of bad debt expense for the […]

The following information pertains to Rural Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the return on common stockholders’ equity for Rural? a. 4.8% b. […]

Langer Company has the following inventory information. Assuming that a perpetual inventory system is used, what is the ending inventory (round all calculations to nearest dollar) under the moving-average cost method? a. $2,930 b. $2,966 c. $2,986 d. $3,054 Answer: […]

Wilco Legal Eagles Company entered into the following transactions during March 2015. 1> Purchased office equipment for $23,000 from Business Equipment, Inc. on account. 2> Paid $3,000 cash for March rent on office furniture. 3> Received $15,000 cash from customers […]

A company purchased a delivery truck on January 1, 2014, for $18,000. It is estimated that the delivery truck will have a $4,000 salvage value at the end of its 5-year useful life. If the company recorded depreciation expense of […]

Penny Company owns 20% interest in the stock of Lynn Corporation. During the year, Lynn pays $25,000 in dividends, and reports $200,000 in net income. Penny Company’s investment in Lynn will increase by a. $25,000. b. $40,000. c. $45,000. d. […]

A corporate board of directors does not generally a. select officers. b. formulate operating policies. c. declare dividends. d. execute policy. Answer: On January 1, 2015, Bose Company issued bonds with a face value of $600,000. The bonds carry a […]

Securities bought and held primarily for sale in the near term to generate income on short-term price differences are a. trading securities. b. available-for-sale securities. c. never-sell securities. d. held-to-maturity securities. Answer: In analyzing the financial statements of a company, […]

The process of recording transactions has become more efficient because a. fewer events can be quantified in financial terms. b. computers are used in processing business events. c. more people have been hired to record business transactions. d. business events […]

Which of the following activities is excluded from the statement of cash flows under IFRS? a. Financing activities b. Investing activities c. Noncash investing and financing activities d. Operating activities Answer: Marke Inc. had cash sales of $400,000 and credit […]

A check correctly written and paid by the bank for $271 is incorrectly recorded on the company’s books for $217. The appropriate adjustment on bank reconciliation would be to a. deduct $271 from the book’s balance. b. deduct $54 from […]