Week 8 Final Exam <\/p>\n
1. Debt and obligations of a business are
\nreferred to as
\na. assets.
\nb. equities.
\nc. liabilities.
\nd. expenses.<\/p>\n
2. Which financial statement shows the
\nassets and liabilities of a business as of a given date?
\na. balance
\nsheet.
\nb. income
\nstatement.
\nc. statement of
\ncash flows.
\nd. statement of
\nretained earnings.<\/p>\n
Use the following information for questions 3 and 4.<\/p>\n
Johnny\u00e2\u0080\u0099s Detailing Shop started the year with total assets
\nof $60,000 and total liabilities of $40,000.
\nDuring the year the business recorded $105,000 in revenues, $55,000 in
\nexpenses, and dividends of $10,000.<\/p>\n
3. Stockholders\u00e2\u0080\u0099 equity at the end of the
\nyear was
\n a. $60,000.
\n b. $50,000.
\n c. $40,000.
\n d. $45,000.<\/p>\n
4. The net income reported by Johnny\u00e2\u0080\u0099s
\nDetailing Shop for the year was
\n a. $40,000.
\n b. $50,000.
\n c. $30,000.
\n d. $95,000.<\/p>\n
5. Which of the
\nfollowing is NOT classified properly as a current asset?
\na. Supplies
\nb. Short-term
\ninvestments
\nc. Accounts
\nreceivable
\nd. Equipment<\/p>\n
6. Which of the following is a measure of
\nliquidity?
\na. Current
\nratio
\nb. Profit
\nmargin
\nc. Earnings per
\nshare
\nd. Debt to
\nequity ratio<\/p>\n
7. Which one of the following is NOT a
\nqualitative characteristic of useful accounting information?
\n a. Relevance
\n b. Reliability
\nc. Cash-basis
\naccounting
\nd. Comparability<\/p>\n
8. Which of the following is NOT
\nconsidered an asset?
\n a. Equipment
\n b. Dividends
\n c. Accounts receivable
\n d. Inventory<\/p>\n
9. An income statement
\n a. summarizes the changes in cash for a
\nspecific period of time.
\n b. reports all of the transactions with
\nstockholders during a specific period of time.
\n c. reports the assets, liabilities, and
\nstockholders\u00e2\u0080\u0099 equity at a specific date.
\n d. reports the revenues and expenses for a
\nspecific period of time.<\/p>\n
10. A debit to an asset account indicates
\na(n)
\n a. error.
\n b. credit was made to a liability account.
\n c. decrease in the asset.
\n d. increase in the asset.<\/p>\n
11. Posting
\n a. transfers ledger transaction data to
\nthe journal.
\n b. normally occurs before journalizing.
\n c. transfers journal entries to the ledger
\naccounts.
\n d. enters transaction data in the journal.<\/p>\n
12. Which of the following correctly
\nidentifies normal balances of accounts?
\n a. Assets Debit
\n Liabilities Credit
\n Common
\nStock Credit
\n Revenues Debit
\n Expenses Credit<\/p>\n
b. Assets Debit
\n Liabilities Credit
\n Common
\nStock Credit
\n Revenues Credit
\n Expenses Credit<\/p>\n
c. Assets Credit
\n Liabilities Debit
\n Common
\nStock Debit
\n Revenues Credit
\n Expenses Debit<\/p>\n
d. Assets Debit
\n Liabilities Credit
\n Common
\nStock Credit
\n Revenues Credit
\n Expenses Debit<\/p>\n
13. A post-closing trial balance will show
\n a. zero balances for all accounts.
\n b. zero balances for all balance sheet
\naccounts.
\n c. zero balances for all income statement
\naccounts.
\n d. There\u00e2\u0080\u0099s no such thing as a post-closing
\ntrial balance.<\/p>\n
14. Which of the following would NOT result
\nin unearned revenue?
\n a. Rent collected in advance from tenants
\n b. Services performed on account
\n c. Sale of season tickets to football
\ngames
\n d. Sale of two-year magazine subscriptions<\/p>\n
15. Snell Tables paid employee wages on and
\nthrough Sunday, January 26, and the next payroll will be paid in February.
\nThere are three more working days in January (29-31), and the company pays $800
\na day in wages. What will be the adjusting entry to accrue wages expense at the
\nend of January?
\n a. Wages Payable 800
\n Wages
\nExpense 800
\n b. Wages Expense 2,400
\n Cash
\n 2,400
\n c. Wages Expense 2,400
\n Wages
\nPayable 2,400
\nd. No adjusting
\nentry is required.<\/p>\n
16. If service for $125 had been performed
\nbut not billed, the adjusting entry to record this would include a
\na. debit to
\nService Revenue for $125.
\nb. credit to
\nUnearned Revenue for $125.
\nc. credit to
\nService Revenue for $125.
\nd. debit to
\nUnearned Revenue for $125.<\/p>\n
17. The Village Laundry Company purchased
\n$6,500 worth of laundry supplies on June 2 and recorded the purchase as an
\nasset. It had zero supplies on hand on June 1.
\nOn June 30, a count of the laundry supplies indicated only $2,000 of
\nsupplies on hand. The adjusting entry
\nthat should be made by the company on June 30 is
\n a. Debit Laundry Supplies Expense, $2,000;
\nCredit Laundry Supplies, $2,000.
\n b. Debit Laundry Supplies Expense, $4,500;
\nCredit Laundry Supplies, $2,000.
\n c. Debit Laundry Supplies, $4,500; Credit
\nLaundry Supplies Expense, $4,500.
\n d. Debit Laundry Supplies Expense, $4,500;
\nCredit Laundry Supplies, $4,500.<\/p>\n
18. Grey Co. has the following financial
\ninformation for the year ended December 31, 2004:
\n Operating
\nExpenses $ 45,000
\n Sales
\nReturns and Allowances 13,000
\n Sales
\n(cash) Discount 6,000
\n Sales 150,000
\n Costs
\nof Goods Sold 77,000<\/p>\n
The
\namount of net sales on Grey Co.\u00e2\u0080\u0099s 2004 income statement would be
\na. $131,000.
\nb. $137,000.
\nc. $144,000.
\nd. $169,000.<\/p>\n
19. As an incentive for customers to pay
\ntheir accounts promptly, a business may offer its customers
\n a. a sales (cash) discount.
\n b. zero percent interest for 90 days.
\n c. a sales allowance.
\n d. a sales return.<\/p>\n
20. Net sales revenue less cost of goods sold
\nis called
\n a. gross profit.
\n b. net profit.
\n c. net income.
\n d. marginal income.<\/p>\n
21. Hunter Company purchased merchandise
\ninventory with an invoice price of $4,000 and credit terms of 2\/10, n\/30. What
\nis the net cost of the goods if Hunter Company pays within the discount period?
\n a. $4,000
\n b. $3,920
\n c. $3,600
\nd. $3,680<\/p>\n
22. A company reports its 2004 cost of goods
\nsold at $20.0 billion. Its ending
\ninventory for 2004 is $1.8 billion and its beginning inventory was $1.5
\nbillion. How much inventory did the
\ncompany purchase during 2004?
\na. $20.3
\nbillion
\nb. $19.7
\nbillion
\nc. $21.8
\nbillion
\nd. $18.5
\nbillion<\/p>\n
23. Which of the following items on a bank
\nreconciliation would require an adjusting entry on the company\u00e2\u0080\u0099s books?
\na. An error by
\nthe bank
\nb. Outstanding
\nchecks
\nc. A bank
\nservice charge
\nd. A deposit in
\ntransit<\/p>\n
Use the following information for questions 24-26.<\/p>\n
A company just starting business made the following four
\ninventory purchases in June:
\n June 1 150
\nunits $6.60\/unit cost $
\n990
\n June 10 200
\nunits $6.30\/unit cost 1,260
\n June 15 200
\nunits $5.85\/unit cost 1,170
\n June 28 150
\nunits $5.20\/unit cost
\n780
\n $4,200<\/p>\n
A physical count of merchandise inventory on June 30 reveals
\nthat there are 250 units on hand.<\/p>\n
24. Using the periodic LIFO inventory method,
\nthe value of the ending inventory on June 30 is
\n a. $1,365.
\n b. $1,620.
\n c. $2,580.
\n d. $2,835.<\/p>\n
25. Using the periodic FIFO inventory method,
\nthe amount allocated to cost of goods sold for June is
\n a. $1,620.
\n b. $2,290.
\n c. $2,580.
\n d. $2,835.<\/p>\n
26. The inventory method which results in the
\nhighest gross profit for June is
\n a. the FIFO method.
\n b. the LIFO method.
\n c. the aging method.
\n d. not determinable.<\/p>\n
27. Jansen Company gathered the following
\nreconciling information in preparing its April bank reconciliation:<\/p>\n
Cash
\nbalance per books, 4\/30 $2,200
\n Deposits
\nin transit 300
\n Notes
\nreceivable and interest collected by bank 740
\n Bank
\ncharge for check printing 25
\n Outstanding
\nchecks 1,500
\n NSF
\ncheck 140
\n The
\nadjusted cash balance per books on April 31 is
\n a. $3,075.
\n b. $2,940.
\n c. $2,775.
\n d. $3,055.<\/p>\n
28. Deposits in transit
\n a. have been recorded on the company’s
\nbooks but not yet by the bank.
\n b. have been recorded by the bank but not
\nyet by the company.
\n c. have not been recorded by either the
\nbank or the company.
\n d. are customers\u00e2\u0080\u0099 checks that have not yet
\nbeen received by the company.<\/p>\n
29. Green Company lends New Company $10,000
\non December 1, 2004, accepting a five-month, 12% interest note. Green Company
\nprepares its annual financial statements on December 31, 2004. How much interest revenue should Green
\nCompany recognize in its 2004 income statement for this note receivable?
\na. $100
\nb. $500
\nc. $1,200
\nd. $10,000<\/p>\n
30. Which of the following statements is NOT
\ntrue about net (cash) realizable value of accounts receivable?
\na. Net (cash)
\nrealizable value equals accounts receivable less allowance for doubtful
\naccounts.
\nb. Net (cash)
\nrealizable value is the amount of cash that the company expects to collect from
\nits accounts receivable customers.
\nc. Net (cash)
\nrealizable value is the amount due to the company from its credit customers.
\nd. Net (cash)
\nrealizable value is often determined based on an aging analysis of accounts
\nreceivable.<\/p>\n
31. Using the allowance method, an aging
\nanalysis of accounts receivable resulted in an estimate of uncollectible
\naccounts of $28,000. If the balance for
\nthe Allowance for Doubtful Accounts is a $7,000 credit before the adjustment
\nfor bad debt expense, what is the amount of bad debt expense for the period?
\na. $7,000
\nb. $21,000
\nc. $28,000
\nd. $35,000<\/p>\n
32. Under the allowance method, writing off a
\nspecific customer\u00e2\u0080\u0099s uncollectible account
\n a. affects only balance sheet accounts.
\n b. affects both balance sheet and income
\nstatement accounts.
\n c. affects only income statement accounts.
\n d. is not acceptable practice.<\/p>\n
33. A company purchased office equipment for
\n$10,000 and estimated a salvage value of $2,000 at the end of its 5-year useful
\nlife. The constant percentage to be applied against book value each year if the
\ndouble-declining-balance method is used is
\n a. 20%.
\n b. 25%.
\n c. 50%.
\n d. 40%.<\/p>\n
34. A machine, acquired for a cash cost of
\n$6,000, is being depreciated using the straight-line method. The estimated useful life is 6 years, and the
\nsalvage or residual value is estimated to be $600. The annual depreciation expense for the
\nmachine is <\/p>\n
a. $900.
\nb. $1,000.
\nc. $1,100.
\nd. $2,000.<\/p>\n
35. The net book value of a plant asset is
\nequal to the
\n a. asset’s market value less its
\nhistorical cost.
\n b. asset\u00e2\u0080\u0099s current market value.
\n c. replacement cost of the asset.
\n d. asset’s historical cost less
\naccumulated depreciation.<\/p>\n
36. Kovacic Company purchased a computer that
\ncost $10,000. It had an estimated useful life of five years and salvage or
\nresidual value of $0. The computer was depreciated by the straight-line method
\nand was sold at the end of the fourth year of use for $3,000 cash. Kovacic
\nshould record
\na. a gain of
\n$1,000.
\nb. a loss of
\n$1,000.
\nc. a gain of
\n$7,000.
\nd. a loss of
\n$7,000.<\/p>\n
37. If a bond payable is sold (issued) at a
\npremium, the amount of the carrying or book value reported on the balance
\nsheets between issue date and maturity date
\na. remains
\nconstant.
\nb. increases
\neach year.
\nc. decreases
\neach year.
\nd. changes from
\nyear to year depending upon the market rate of interest each year.<\/p>\n
38. If a bond is sold at 98, its stated rate
\nof interest would be
\na. higher than
\nthe market rate.
\nb. lower than
\nthe market rate.
\nc. equal to the
\nmarket rate.
\nd. unrelated to
\nthe market rate.<\/p>\n
39. On January 1, 2004, Winston Corporation
\nsold a four-year, $10,000 face value, 7% bond. The interest (coupon) payment is
\ndue annually each December 31. The issue price was $9,668 based on an 8%
\neffective or market interest rate. Assuming effective-interest amortization is
\nused, the interest expense on the 2004 income statement would be (to the
\nnearest dollar)
\na. $ 1,547.
\nb. $ 883.
\nc. $ 773.
\nd. $ 700.<\/p>\n
40. On June 30, 20A, Reagan Corporation sold
\n(issued) a $10,000 face value bond that matures in 10 years, has a coupon or
\nstated interest rate of 8%, and requires annual interest or coupon
\npayments. When the bond was issued, the
\nmarket interest rate was 6%. The
\nproceeds Reagan received when it issued this bond were:
\na. $ 10,000.
\nb. $ 8,338.
\nc. $ 10,051.
\nd. $ 11,472.<\/p>\n
41. A disadvantage of the corporate form of
\nbusiness is
\na. its status
\nas a separate legal entity.
\nb. continuous
\nexistence.
\nc. separation
\nof ownership and management.
\nd. ease of
\ntransfer of ownership.<\/p>\n
42. The maximum amount of stock that may be
\nissued according to the corporation\u00e2\u0080\u0099s charter is referred to as the
\na. authorized
\nstock.
\nb. issued
\nstock.
\nc. unissued
\nstock.
\nd. outstanding
\nstock.<\/p>\n
43. If common stock is issued for an amount
\ngreater than par value, the excess should be credited to
\n a. Cash.
\n b. Retained Earnings.
\n c. Paid-in Capital in Excess of Par Value.
\n d. Legal Capital.<\/p>\n
44. The acquisition of treasury stock by a
\ncorporation
\n a. increases its total assets and total
\nstockholders\u00e2\u0080\u0099 equity.
\n b. decreases its total assets and total
\nstockholders\u00e2\u0080\u0099 equity.
\n c. has no effect on total assets and total
\nstockholders\u00e2\u0080\u0099 equity.
\nd. requires
\nthat a gain or loss be recognized on the income statement.<\/p>\n
45. What is the total stockholders\u00e2\u0080\u0099 equity
\nbased on the following account balances? <\/p>\n
Common
\nStock \u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6 $500,000
\n Paid-In
\nCapital in Excess of Par \u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6 40,000
\n Retained
\nEarnings \u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6 190,000
\n Treasury
\nStock \u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6\u00e2\u0080\u00a6. 20,000
\na. $630,000
\nb. $710,000
\nc. $750,000
\nd. $460,000<\/p>\n
46. The primary purpose of the statement of
\ncash flows is to
\n a. provide information about the investing
\nand financing activities during a period.
\n b. prove that revenues exceed expenses if
\nthere is a net income.
\n c. provide information about the cash
\nreceipts and cash payments during a period.
\n d. facilitate banking relationships.<\/p>\n
47. If a company purchased treasury stock
\nwith cash, this would be reported on the statement of cash flows as
\n a. An operating cash outflow
\n b. An investing cash outflow
\n c. A financing cash outflow
\n d. A financing cash inflow<\/p>\n
48. Bilton Company reported net income of
\n$35,000 for the year. During the year,
\naccounts receivable increased by $7,000, accounts payable decreased by $3,000
\nand depreciation expense of $5,000 was recorded. Net cash provided by operating activities for
\nthe year is
\n a. $30,000.
\n b. $50,000.
\n c. $34,000.
\n d. $35,000.<\/p>\n
49. The method for presenting Net cash
\nprovided by operating activities that starts with net income and adjusts it for
\nitems that affected reported net income but that did not affect cash is called
\nthe
\n a. direct method.
\n b. indirect method.
\n c. working capital method.
\n d. cost-benefit method.<\/p>\n
50. When equipment is sold for cash, the
\namount received is reflected as a cash
\n a. inflow in the operating section.
\n b. inflow in the financing section.
\n c. inflow in the investing section.
\n d. outflow in the operating section.<\/p>\n","protected":false},"excerpt":{"rendered":"
Week 8 Final Exam 1. Debt and obligations of a business are referred to as a. assets. b. equities. c. liabilities. d. expenses. 2. Which\u2026<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8827,10099,10540,10536,10892,10538,10539,10537,10891],"tags":[10549,10616,10615,7687,10627,8857,10552,10295,10548,10622,8907],"class_list":["post-130233","post","type-post","status-publish","format-standard","hentry","category-australia-essays","category-buy-essay","category-cheap-essay-writers","category-get-assignments-done","category-page-paper","category-phd-essay-writers","category-research-paper-writing-service-for-any-topic","category-study-bay-essay","category-write-my-assignment-ireland","tag-ai-plagiarism-free-essay-writing-tool","tag-australian-best-tutors","tag-best-trans-tutors","tag-buy-essay-uk","tag-cheap-dissertation-writer","tag-help-with-writing-an-essay","tag-help-write-my-paper-ai-free","tag-homework-for-you","tag-online-essay-writers","tag-phd-essays","tag-write-my-essay-for-me"],"_links":{"self":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/130233","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/comments?post=130233"}],"version-history":[{"count":0,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/130233\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/media?parent=130233"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/categories?post=130233"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/tags?post=130233"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}