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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 special account used instead of a journal.
c.a special account used instead of a trial balance.
d.used for accounts that have both a debit and credit balance.
3)
information for two companies in the same industry, hill corporation and ace
corporation, is presented here.
instructions
using the cash-based measures presented in this chapter, compare the (a) liquidity and
(b) solvency of the two companies.
4) on january 1, a machine with a useful life of five years and a residual value of $5,000
was purchased for $25,000. what is the depreciation expense for year 2 under
straight-line depreciation?
a.$5,000
b.$15,000
c.$4,000
d.$12,000
5) the selection of an appropriate inventory cost flow assumption for an individual
company is made by
a.the external auditors
b.the sec
c.the internal auditors
d.management
6) retained earnings is
a.the stockholders claim on total assets
b.equal to cash
c.equal to revenues
d.the amount of net income kept in the corporation for future use
7) adler company developed the following reconciling information in preparing its
december bank reconciliation:
using the above information, determine the cash balance per books (before adjustments)
for the adler company.
a.$3,700
b.$22,000
c.$11,700
d.$16,000
8) the following information was taken from hobson company cash budget for the
month of
if the company has a policy of maintaining end-of-the-month cash balance of $100,000,
the amount the company would have to borrow is
a.$40,000
b.$20,000
c.$0
d.$60,000
9) which statement is incorrect concerning the adjusted trial balance?
a.an adjusted trial balance proves the equality of the total debit balances and the total
credit balances in the ledger after all adjustments are made
b.the adjusted trial balance provides the primary basis for the preparation of financial
statements
c.the adjusted trial balance lists the account balances in order of their magnitude
d.the adjusted trial balance is prepared after the adjusting entries have been journalized
and posted
10) use the following data to determine the total dollar amount of assets to be classified
as property, plant, and equipment.
a.$670,000
b.$510,000
c.$410,000
d.$330,000
11) the following information pertains to bell 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 assets for this company?
a.6.8%
b.10.5%
c.11.7%
d.26.7%
12) which of the following is not included in the cash disbursements section of a cash
budget?
a.payments for materials
b.payments for income taxes
c.repayments of borrowed funds
d.all of these are included
