Archives: Quiz

1) machinery was purchased for $85,000 on january 1, 2011. freight charges amounted to $3,500 and there was a cost of $10,000 for building a foundation and installing the machinery. it is estimated that the machinery will have a $15,000 […]

1) la more company had the following transactions during 2011. what is la mores 2011 net income using cash basis accounting? a.$5,375 b.$875 c.$5,125 d.$625 2) equipment costing $140,000 was destroyed when it caught on fire. at the date of […]

1) a debit balance in the allowance for doubtful accounts a.is the normal balance for that account b.indicates that actual bad debt write-offs have exceeded previous provisions for bad debts c.indicates that actual bad debt write-offs have been less than […]

1) on the statement of cash flows using the indirect method, patent amortization expense will a.be added to net income in the operating section b.be deducted from net income in the operating section c.appear as an inflow of cash in […]

1) most companies pay current liabilities a.out of current assets b.by issuing interest-bearing notes payable c.by issuing stock d.by creating long-term liabilities 2) pinson company began the year with retained earnings of $550,000. during the year, the company recorded revenues […]

1) the preparation of a bank reconciliation is an important cash control procedure. if a company deposits cash receipts daily and makes all cash disbursements by check, explain why the cash balance per books might not agree with the cash […]

1) those most responsible for the major policy decisions of a corporation are the a.stockholders b.board of directors c.management d.employees 2) compton inc. made a $500 ordinary repair to a piece of equipment. compton’s accountant debited this amount to the […]

1) in the month of may, lopat company inc. wrote checks in the amount of $27,750. in june, checks in the amount of $37,974 were written. in may, $25,404 of these checks were presented to the bank for payment, and […]

1) the difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the: a.market value of the asset b.blue book value of the asset c.book value of the asset d.depreciated difference of the […]

1) these t accounts summarize the ledger of garner gardening company inc. at the end of the first month of operations, april 2014 . instructions (a)prepare in the order they occurred the journal entries (including explanations) that resulted in the […]

1) which of the following would not be considered an external user of accounting data for the julian company? a.internal revenue service agent b.management c.creditors d.customers 2) which of the following groups uses accounting information primarily to insure the entity […]

1) assets purchased for resale are recorded in which of the following accounts? a.supplies b.inventory c.equipment d.more than one of the above is correct 2) which of the following statements concerning financial statement presentation is false? a.intangibles are reported separately […]

1) an alternative name for bad debts expense is a.deadbeat expense b.uncollectible accounts expense c.collection expense d.credit loss expense 2) cannon company is considering purchasing a machine. the machine will produce the following cash flows: gannon requires a minimum rate […]

1) the going concern assumption assumes that the business a.will be liquidated in the near future b.will be purchased by another business c.is in a growth industry d.will remain in operation for the foreseeable future 2) a note receivable is […]

1) all of the following are true regarding financial statement analysis ratios associated with liabilities except a.a high times interest earned ratio indicates that a company is more likely to meet interest payments as scheduled b.high liquidity ratios mean that […]

1) assume the following sales data for a company: if 2011 is the base year, what is the percentage increase in sales from 2011 to 2012? a.129% b.112% c.29% d.15% 2) which of the following is a debt security? a.ibm […]

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 […]

1) which one of the following is not an objective of a system of internal controls? a.safeguard company assets b.overstate liabilities in order to be conservative c.enhance the accuracy and reliability of accounting records d.reduce the risks of errors 2) […]

1) the current ratio is a a.liquidity ratio b.profitability ratio c.long-term solvency ratio d.cash flow ratio 2) courtney company purchased equipment for $1,800 cash. as a result of this event, a.equity decreased by $1,800. b.assets increased by $1,800. c.total assets […]

1) orange-aide company has the following inventory data: a physical count of merchandise inventory on july 30 reveals that there are 30 units on hand. using the average cost method, the value of ending inventory is a.$600 b.$627 c$630 d$660 […]

1) ferman corporation had net income of $200,000 and paid dividends of $50,000 to common stockholders and $20,000 to preferred stockholders in 2012. ferman corporations common stockholders equity at the beginning and end of 2012 was $870,000 and $1,130,000, respectively. […]

1) which of the following activities is not a component of the operating cycle? a.sale of merchandise b.payment of employees salaries c.collection of cash from merchandise sales d.purchase of merchandise 2) carryable cds has the following inventory data: a physical […]

1) harden corporation engaged in the following transaction. assume that the harden corporation uses the indirect method to depict cash flows. indicate where, if at all, long-term debt retired with cash would be classified on the statement of cash flows. […]

1) the companys policy toward dividends and growth could best be determined by examining the a.balance sheet b.income statement c.retained earnings statement d.statement of cash flows 2) a high receivables turnover ratio indicates a.the companys sales are increasing b.a large […]

1) a trial balance proves a.the mathematical equality of debits and credits after the posting process. b.the ledger is posted correctly. c.that all transactions have been recorded correctly. d.that all transactions have been posted. 2) which of the following is […]

1) danner corporation reported net sales of $600,000, $680,000, and $800,000 in the years 2011, 2012, and 2013, respectively. if 2011 is the base year, what percentage do 2013 sales represent of the base? a.113% b.133% c.75% d.33% 2) the […]

1) which of the following is not an accounting assumption? a.integrity b.going concern c.periodicity d.economic entity 2) all of the following statements about the useful life factor associated with depreciation are true except a.useful life is also called service life […]

1) on january 1, 2012, ermler company, a calendar-year company, issued $800,000 of notes payable, of which $200,000 is due on january 1 for each of the next four years. the proper balance sheet presentation on december 31, 2012, is […]

1) if year 1 equals $600, year 2 equals $650, and year 3 equals $780, the percentage to be assigned for year 1 in a trend analysis, assuming that year 1 is the base year, is a.100% b.89% c.105% d.112% […]

1) internal users of accounting information include a.the shareholders of royal dutch shell b.the internal revenue service c.the chief financial officer of credit suisse d.the international accounting standards board 2) cash from operations and net income are approximately the same […]

1) earnings per share are calculated by dividing a.gross profit by average common shares outstanding b.(net income less preferred stock dividends) by average common shares outstanding c.net income by average common shares outstanding d.net sales by average common shares outstanding […]

1) when calculating interest on a promissory note with the maturity date stated in terms of days, the a.maker pays more interest if 365 days are used instead of 360 b.maker pays the same interest regardless if 365 or 360 […]

1) after transaction information has been recorded in the journal, it is transferred to the a.trial balance. b.income statement. c.general journal. d.ledger. 2) harden corporation engaged in the following transaction. assume that the harden corporation uses the indirect method to […]

1) which of the following items will increase inventoriable costs for the buyer of goods? a.purchase returns and allowances granted by the seller b.purchase discounts taken by the purchaser c.freight charges paid by the seller d.freight charges paid by the […]

1) hogan company has other operating expenses of $260,000. there has been a decrease in prepaid expenses of $16,000 during the year, and accrued liabilities are $24,000 larger than in the prior period. using the direct method of reporting cash […]

1) what does each type of ratio measure? (a)liquidity ratios. (b)solvency ratios. (c)profitability ratios. 2) the following totals for the month of march were taken from the payroll register of kern company. the entry to record the accrual of federal […]

1) if a company determines cost of goods sold each time a sale occurs, it a.must have a computer accounting system b.uses a combination of the perpetual and periodic inventory systems c.uses a periodic inventory system d.uses a perpetual inventory […]

1) what is the rationale for the internal control principle, segregation of duties? a.history has shown that employees are generally dishonest and thus cannot be entrusted with performing related duties b.the work of one employee should, without duplication of effort, […]

1) in reporting discontinued operations, the income statement should show in a special section 1>gains on the disposal of a discontinued component. 2>losses on the disposal of a discontinued component. a.1 only b.2 only c.neither 1 nor 2 d.both 1 […]

1) a high receivables turnover ratio indicates a.customers are making payments quickly b.a large portion of the companys sales are on credit c.many customers are not paying their receivables d.the companys sales have increased 2) posting a.should be performed in […]

1) the following totals for the month of april were taken from the payroll register of metz company. the entry to record the payment of net payroll would include a a.debit to salaries and wages payable for $12,107 b.debit to […]

1) russel company assembled the following information in completing its march bank reconciliation: as a result of this reconciliation, perkins will a.reduce its cash account by $475 b.reduce its cash account by $25 c.increase its cash account by $55 d.reduce […]

1) corporations invest in other companies for all of the following reasons except to a.house excess cash until needed b.generate earnings c.meet strategic goals d.increase trading of the other companies stock 2) which statement about an account is true? a.in […]

1) using the following information, which company appears to be most liquid? a.xu company b.lin company c.ng company d.chen company 2) when preparing an income statement, which of the following is the proper order for income statement components? a.comprehensive income, […]

1) adjusting entries can be classified as: a.postponements and advances b.accruals and advances c.deferrals and postponements d.accruals and deferrals 2) restoration company issued bonds that had the following data associated with them: interest to be paid is $40,000. interest expense […]

1) an awareness of the normal balances of accounts would help you spot which of the following as an error in recording? a.a debit balance in the dividends account b.a credit balance in an expense account c.a credit balance in […]

1) adjustments for unearned revenue: a.decrease liabilities and increase revenues b.increase liabilities and increase revenues c.increase assets and increase revenues d.decrease revenues and decrease assets 2) a t-account is a.a way of depicting the basic form of an account. b.a […]

1) the jacquers, a semi-professional baseball team, prepare financial statements on a monthly basis. their season begins in april, but in march the team engaged in the following transactions: (a)paid $90,000 to lawrence city as advance rent for use of […]

1) a plant asset cost $96,000 and is estimated to have a $12,000 salvage value at the end of its 8-year useful life. the annual depreciation expense recorded for the third year using the double-declining-balance method would be a.$8,040 b.$13,500 […]

1) using the following data for stevenson industries, compute the return on assets ratio. a.5.0% b.10.4% c.5.5% d.11.4% 2) the market rate of interest is often called the a.stated rate b.effective rate c.coupon rate d.contractual rate Answer: b 3) the […]