1.

A company provides services to clients during the period that are neither paid for, nor billed to the clients. What must the company do?

Select one:

A. Bill the client prior to year end in order to recognize the revenue

B. Record the revenues as a liability at the end of the year

C. Accrue revenue by making an adjusting entry at the end of the period

D. All of the above are true

2.

Which benefits do convertible preferred stockholders hold?

I. The securities carry a fixed dividend yield.

II. The securities carry a senior claimant position in bankruptcy.

III. The owner can convert the debt or equity security into another equity security.

Select one:

A. I and II

B. I, II, and III

C. I only

D. II and III

3.

Stockholders' equity:

Select one:

A. Is equal to assets minus liabilities

B. Represents the interest of the owners in the assets of an entity

C. Is equal to the net assets of an entity

D. All of the above

E. None of the above

4.

The following data refer to Ward Company's ending inventory:

Item code	Quantity	Unit Cost	Unit Market
Small	45	$128	$152
Medium	60	184	176
Large	65	200	168
Extra-Large	35	216	212

How much is ending inventory if the lower of cost or market rule is applied to the total inventory?

Select one:

A. $35,220

B. $35,256

C. $37,360

D. $35,740

5.

On January 1, 2014, Hoatson, Inc. purchased a machine for $74,400. Hoatson uses straight-line depreciation and estimates an eight-year useful life and a $2,400 salvage value. On December 31, 2021, Hoatson cannot locate a buyer for the used machine so it is scrapped. In recording the machine retirement, Hoatson should reflect:

Select one:

A. A $2,400 loss

B. A $57,600 loss

C. A $2,400 gain

D. No gain or loss

6.

Bud Company records purchases at invoice price, using the periodic inventory system. On July 5, Bud returned $12,000 of goods purchased on account to the seller. How would Bud record this transfer?

Select one:

A.

Cash

12,000

Purchases Returns and Allowances

12,000

B.

Accounts Payable

12,000

Purchases Returns and Allowances

12,000

C.

Accounts Payable

12,000

Purchases

12,000

D.

Accounts Receivable

12,000

Purchases Returns and Allowances

12,000

7.

Stockholders equity and total assets were $128,000 and $316,000 respectively at the beginning of the period. Assets increased 50% and liabilities decreased 60% during the period. What is stockholders equity at the end of the period?

Select one:

A. $180,000

B. $398,800

C. $188,000

D. $446,800

8.

A corporation:

Select one:

A. Is subject to less regulation and supervision than a partnership

B. Has an owner's capital account for each owner, whereas a partnership does not

C. Is subject to federal income taxes on its earnings, whereas a partnership is not

D. Is less costly to organize than a partnership