1) the principle of establishing responsibility does not include
a.one person being responsible for one task
b.authorization of transactions
c.independent internal verification
d.approval of transactions
2) the income statement for mcdonald’s corporation shows cost of goods sold $6,175.6
million and operating expenses (including depreciation expense of $1,214.1 million)
$18,907.6 million. the comparative balance sheet for the year shows that inventory
increased $12.9 million, prepaid expenses increased $102.9 million, accounts payable
(merchandise suppliers) decreased $44.6 million, and accrued expenses payable
increased $162.4 million.
instructions
using the direct method, compute (a) cash payments to suppliers and (b) cash payments
for operating expenses.
3) the following information is from the income statement of the dirt poor laundry
service:
the entry to close the laundry service revenue account includes a:
a.debit to laundry service revenue for $5,500.
b.credit to laundry service revenue for $5,500.
c.debit to income summary for $5,500.
d.debit to retained earnings for $5,500.
4) which of the following would not be needed to determine net cash provided by
operating activities?
a.depreciation expense
b.change in accounts receivable
c.payment of cash dividends
d.change in prepaid expenses
5) at april 30, kessler company has the following bank information:
what is kesslers adjusted cash balance on april 30?
a.$7,290
b.$7,320
c.$6,495
d.$7,305
6) which of the following is not typically a characteristic experienced by a company
during the growth phase of the corporate life cycle?
a.cash from operations on the statements of cash flows will be less than net income on
the income statement
b.collections on accounts receivable will lag behind sales
c.cash from investing is positive
d.cash from financing is positive
7) a company maintains the asset account, cash in bank, on its books, while the bank
maintains a reciprocal account that is
a.a contra asset account
b.a liability account
c.also an asset account
d.an owner’s equity account
8) the following information is provided for nguyen company and northwest
corporation.
what is northwest’s return on assets for 2012?
a.12.7%
b.11.4%
c.13.0%
d.11.1%
9) the form of income statement that derives its name from the fact that the total of all
expenses is deducted from the total of all revenues is called a
a.multiple-step statement
b.revenue statement
c.report-form statement
d.single-step statement
10) salem company hired kirk construction to construct an office building for 8,000,000
on land costing 2,000,000, which salem company owned. the building was complete
and ready to be used on january 1, 2011 and it has a useful life of 40 years. the price of
the building included land improvements costing 600,000 and personal property costing
750,000. the useful lives of the land improvements and the personal property are 10
years and 5 years, respectively. salem company uses component depreciation, and the
company uses straight-line depreciation for other similar assets. what is the net amount
reported for the building on salem company’s december 31, 2011 statement of financial
position?
a.7,665,000
b.7,573,750
c.6,483,750
d.7,800,000
11) use the following data to determine the total dollar amount of assets to be classified
as investments.
a.$0
b.$150,000
c.$80,000
d.$180,000
12) record the following transactions in general journal form for the newell company.
13) an adjusting entry always involves two balance sheet accounts.
14) the following are the gross profit percentages for naylor company:
list four possible explanations for the low gross profit percentage in 2012.
15) a consolidated balance sheet reports the financial position of two or more legal
entities just as if they were one reporting unit. explain why all the individual items
appearing on the separate balance sheets of each of the affiliated companies cannot be
added together to arrive at a consolidated total for each item.
16) cost of goods sold for the year amounted to $100,000, and during the year,
inventory ______________ by $7,000 and accounts payable ______________ by
$3,000 resulting in cash paid to suppliers of $90,000.
17) using the following selected items from the comparative balance sheet of darling
company, illustrate horizontal and vertical analysis.
december 31, 2012december 31, 2011
accounts receivable$ 690,000$ 600,000
inventory450,000360,000
total assets3,200,0003,000,000
18) distinguish between the cost and equity methods of accounting for investments in
stocks.