1)

In promulgating accounting standards, the FASB has maintained that

Group of answer choices

-Standards will be developed in an open process with opportunity for interested parties to express their views of proposed standards.

-Standards should be set so that the cost of complying with GAAP will be very minimal.

-FASB will address all reporting issues that have been considered by the Emerging Issues Task Force (EITF).

-Standards are developed primarily for the management of the reporting entities.

2)

Yamamoto Corp.'s liabilities at June 30, 2009 included a 10% $3,000,000 note payable. The note was dated October 1, 2008 and required equal annual payments of $1,000,000 plus interest. The first principal and interest payment was made on October 1, 2009. What amount should be reported as interest payable on Yamamoto's June 30, 2010 balance sheet?

Group of answer choices

-$100,000

-$150,000

-$225,000

-$200,000

3)

Mertz Co. paid $6,000 for six months' rent on November 1, 2010, the beginning of the rental period, and recorded the $6,000 payment as Rent Expense. The adjusting entry on December 31, 2010 is

Group of answer choices

-Debit Rent Expense and credit Prepaid Rent, $2,000.

-Debit Prepaid Rent and credit Rent Expense, $4,000.

-Debit Rent Expense and credit Prepaid Rent, $4,000.

-Debit Cash and credit Prepaid Rent, $6,000.

4)

Which of the following statements on a subsidiary ledger is FALSE?

Group of answer choices

-Journal entries posted to a subsidiary ledger need not be posted to the general ledger.

-The purpose of a subsidiary ledger is to store the details of certain general ledger accounts.

-One benefit of a subsidiary ledger is that the number of general ledger accounts necessary may be reduced.

-The sum of the individual balances in a subsidiary ledger should equal the balance in the general ledger control account.

5)

Acura Corp. maintains its accounting records using ACCRUAL accounting and reports the following amounts on its year-end financial statements: Accrued Salaries Payable at December 31, 2009 was $ 9,000. Accrued Salaries Payable at December 31, 2010 was $4,000. Salaries Expense for 2010 was $85,000. The CASH actually paid for salaries during 2010 was

Group of answer choices

-$89,000.

-$94,000.

-$80,000.

-$90,000.

6)

Big Co. leased an unused portion of its office building to Small Co. and collected the annual rental of $144,000 on June 1, 2010, the beginning of the lease period. Big Co. recorded the $144,000 receipt in Unearned Rent Revenue. Big Co. records adjusting entries annually and reports on a calendar-year basis. The adjusting entry on December 31, 2010 is

Group of answer choices

-Debit Rent Revenue and credit Unearned Rent Revenue, $72,000.

-Debit Unearned Rent Revenue and credit Prepaid Rent, $84,000.

-Debit Cash and credit Unearned Rent Revenue, $144,000.

-Debit Unearned Rent Revenue and credit Rent Revenue, $84,000.

7)

Small Creek, Inc. earned a NET LOSS of $600 for 2010 and its total revenues for 2010 were $1,900. ALL of Small Creek's closing entries could be combined into one entry. The aggregate SINGLE closing entry is

Group of answer choices

=Debit Retained Earnings for $600; Debit Revenues for $1,900; Credit Expenses for $2,500

=Debit Income Summary for $1,900 and credit Revenues for $1,900

=Debit Expenses for $1,300; Debit Income Summary for $600; Credit Revenues for $1,900

=Debit Expenses for $2,500; Credit Revenues for $1,900; Credit Retained Earnings for $600

8)

How would the two cash flows, receipt of a cash dividend and payment of a cash dividend, be classified In accordance with U.S. GAAP?

Group of answer choices

-Receipt of a cash dividend and payment of a cash dividend are both operating activities

-Receipt of a cash dividend is an operating activity, while payment of a cash dividend is an financing activity

-Receipt of a cash dividend is an investing activity, while payment of a cash dividend is an operating activity

-Receipt of a cash dividend is an operating activity, while payment of a cash dividend is an investing activity

9)

Ball, Inc. renewed its only insurance policy for two years by paying $9,600 on March 1, 2010, the effective date of the policy. At March 31, 2010, Ball's unadjusted trial balance showed a balance of $300 for Prepaid Insurance and $9,600 for Insurance Expense. What amounts should be reported for Prepaid Insurance and Insurance Expense in Ball's financial statements for the three months ended March 31, 2010?

Group of answer choices

a. Prepaid Insurance, $9,500; Insurance Expense, $400

b. Prepaid Insurance, $9,500; Insurance Expense, $700

c. Prepaid Insurance, $9,200; Insurance Expense, $400

d. Prepaid Insurance, $9,200; Insurance Expense, $700