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
2) a company purchased factory equipment on june 1, 2012, for $80,000. it is estimated
that the equipment will have a $5,000 salvage value at the end of its 10-year useful life.
using the straight-line method of depreciation, the amount to be recorded as
depreciation expense at december 31, 2012, is
a.$7,500
b.$4,375
c.$3,750
d.$3,125
3) which of the following clarifies information presented in the financial statements, as
well as expanding upon it where additional detail is needed?
a.auditors report
b.management discussion and analysis section
c.notes to the financial statements
d.presidents state of the company report
4) which of the following would be added to the balance per books on a bank
reconciliation?
a.outstanding checks
b.deposits in transit
c.notes collected by the bank
d.nsf check
5) liabilities are classified on the balance sheet as current or
a.deferred
b.unearned
c.long-term
d.accrued
6) a liabilityrevenue relationship exists with:
a.asset accounts
b.revenue accounts
c.unearned revenue adjusting entries
d.accrued expense adjusting entries
7) yanik corporation issues 1,000, 10-year, 8%, $1,000 bonds dated january 1, 2012, at
97. the journal entry to record the issuance will show a
a.debit to cash of $1,000,000
b.debit to discount on bonds payable for $30,000
c.credit to bonds payable for $970,000
d.credit to cash for $970,000
8) similarities between international financial reporting standards (ifrs) and u.s. gaap
include all of the following except
a.cash-basis accounting is not in accordance with either ifrs or u.s. gaap
b.both ifrs and u.s. gaap allow revaluation of items such as land and buildings to fair value
c.both ifrs and u.s. gaap divide the economic life of companies into artificial time periods
d.the form and content of financial statements are very similar under ifrs and u.s. gaap
9) in a perpetual inventory system,
a.lifo cost of goods sold will be the same as in a periodic inventory system
b.average costs are based entirely on unit cost simple averages
c.a new average is computed under the average cost method after each sale
d.fifo cost of goods sold will be the same as in a periodic inventory system
10) which of the following would not be considered an example of a discontinued
operation?
a.shifting production processes within an operation
b.elimination of a major class of customers
c.elimination of an entire activity
d.disposal of a significant component of a business
11) a measure of a companys solvency is the
a.acid-test ratio
b.current ratio
c.times interest earned ratio
d.asset turnover ratio
12) under ifrs, other comprehensive income must be displayed(reported) in
a. the equity section of the statement of financial position
b. a second income income statement
c. the income statement
d. the retained earnings statement
13) which of the following is not a current liability?
a.wages payable
b.accounts payable
c.taxes payable
d.bonds payable
14) on the dividend record date
a.a dividend becomes a current obligation
b.no entry is required
c.an entry may be required if it is a stock dividend
d.dividends payable is debited