_____ 1. The Newbury Company has provided the following information: Net sales, $100,000; Net operating income, $40,000; Net income, $20,000; Average total assets, $120,000; Average net fixed assets; $80,000. Fixed Asset Turnover Ratio = Net Sales Average Net Fixed Assets What is Wilson's fixed asset turnover ratio? A. 0.83 B. 1.25 C. 0.25 D. 0.50.

_____ 2. Which of the following equipment related costs is not put on the balance sheet as part of the cost of an asset? A. Equipment installation costs. B. Transportation costs associated with the equipment purchase. C. Equipment maintenance costs. D. The equipment's purchase price. ?

_____ 3. Which of the following journal entries is correct for Millbury Company when Millbury issues 10,000 shares of $20 par value common stock and pays $20,000 cash in exchange for a building? The market price of the Illinois stock on the exchange date was $35 per share and the building's book value on the books of the seller was $200,000. A. Building 220,000 Cash 20,000 Common Stock 200,000 B. Building 370,000 Cash 20,000 Common Stock 350,000 C. Building 370,000 Cash 20,000 Common Stock 200,000 Additional Paid-in Capital 150,000 D. Building 200,000 Common Stock 200,000

_____ 4. Which of the following best describes the objective of depreciation? A. To allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue. B. To estimate the remaining useful life of the asset. C. To report the asset on the balance sheet at the estimated amount for which the asset could be sold on the balance sheet date. D. To estimate the current replacement cost of the asset.

_____ 5. On January 1, 2014, Greenfield, Inc. purchased a machine costing $40,000. Greenfield also paid $1,000 for transportation and installation. The expected useful life of the machine is 6 years and the residual value is $5,000. How much is the annual depreciation expense assuming use of the straight-line depreciation method? A. $6,100 B. $6,000 C. $5,950 D. $5,750

_____6. A company reported the following information for its most recent year of operation: purchases, $100,000; beginning inventory, $20,000; and cost of goods sold, $110,000. How much was the company's ending inventory? A. $10,000 B. $20,000 C. $15,000 D. $30,000

_____7. Which of the following costs is not included as inventory on the balance sheet? A. Raw materials currently being used in the manufacturing process. B. Work in process. C. Finished goods. D. Storage costs for finished goods.

_____ 8. Lauer Corporation uses the periodic inventory system and has provided the following information about one of their laptop computers: Date Transaction Number of Units Cost per Unit 1/1 Beginning Inventory 100 $800 5/5 Purchase Inventory 200 $900 8/10 Purchase Inventory 300 $1,000 10/15 Purchase Inventory 200 $1,050 During the year, 750 laptop computers were sold. What was ending inventory using the FIFO cost flow assumption? A. $60,000 B. $52,500 C. $52,000 D. $40,000

_____9. Under the FIFO cost flow assumption during a period of inflation, which of the following is false? A. Income tax expense will be higher than under LIFO. B. Gross margin will be higher than under LIFO. C. Ending inventory will be lower than under LIFO. D. Cost of goods sold will be lower than under LIFO.

_____10. On March 15, 2014, Ryan Company purchased $10,000 of merchandise on credit subject to terms of 2/10, n/30. Ryan Company records its purchases using the gross amount. The periodic inventory system is used. Which of the following journal entries is correct when Ryan Company pays for these goods on March 30, 2014? A. Accounts Payable 9,800 Cash 9,800 B. Accounts Payable 10,000 Cash 10,000 C. Accounts Payable 10,000 Cash 9,800 Purch. Discounts 200 D. Accounts Payable 9,800 Purch. Discounts 200 Cash 10,000

_____11 . Which of the following describes an accrued liability? A. It is an expense that has been both incurred and paid. B. It is an expense that has been incurred but not yet paid. C. It is an expense that has been prepaid but not yet consumed. D. It is a liability where the cash flow has taken place but the revenue has yet to be earned. ?

_____12 . Taunton Company borrowed $100,000 cash on September 1, 2013, and signed a one-year 6%, interest-bearing note payable. Assuming no adjusting entries have been made during the year, the required adjusting entry at the end of the accounting period, December 31, 2013, would be which of the following? A. Interest Expense 2,000 Interest Payable 2,000 B. Interest Expense 6,000 Interest Payable 6,000 C. Notes Payable 100,000 Interest Expense 6,000 Cash 106,000 D. Interest Payable 2,000 Interest Expense 2,000

_____13. Landseeker's Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2013. In 2012, cost of goods sold was $258 million and accounts payable was $72 million. What was Landseeker's accounts payable turnover ratio in 2013? A. 4.23 B. 4.15 C. 4.04 D. 3.91 Accounts Payable Turnover = Cost of Goods Sold/Average Accounts Payable

_____14. On September 1, 2017, Donna Equipment signed a one-year, 8% interest-bearing note payable for $50,000. Assuming that Donna Equipment maintains its books on a calendar year basis, how much interest expense that should be reported in the 2017 income statement? A. $2,667 B. $4,000 C. $1,333 D. $3,000

_____ 15. Tewksbury Company is involved in a lawsuit. When would the lawsuit be recorded as a liability on the balance sheet? A. When the loss probability is remote and the amount can be reasonably estimated. B. When the loss is probable and the amount can be reasonably estimated. C. When the loss probability is reasonably possible and the amount can be reasonably estimated. D. When the loss is probable regardless of whether the loss can be reasonably estimated.

_____ 16. Salvia Company recently purchased a truck. The price negotiated with the dealer was $40,000. Salvia also paid sales tax of $2,000 on the purchase, shipping and preparation costs of $3,000, and insurance for the first year of operation of $4,000. At what amount should the truck be recorded on the balance sheet prior to recording depreciation expense? A. $40,000. B. $42,000. C. $43,000. D. $45,000.

_____ 17. When a company receives cash before products or services are provided the following results: A. Assets and stockholders' equity increase. B. Assets and revenue increase. C. Liabilities and revenues increase. D. Liabilities and assets increase. ?

_____ 18. On March 15, 2016, Ryan Company purchased $10,000 of merchandise on credit subject to terms of 2/10, n/30. Ryan Company records its purchases using the gross amount. The periodic inventory system is used. Which of the following journal entries is correct when Ryan Company pays for these goods on March 20, 2016? A. Accounts Payable 9,800 Cash 9,800 B. Accounts Payable 10,000 Cash 10,000 C. Accounts Payable 10,000 Cash 9,800 Purchase Discounts 200 D. Accounts Payable 9,800 Purchase Discounts 200 Cash 10,000

_____ 19. A company provided the following data: sales, $500,000; beginning inventory, $40,000; ending inventory, $45,000; and gross profit, $150,000. What was the amount of inventory purchased during the year? A. $385,000. B. $355,000. C. $345,000. D. $145,000.

_____ 20. On October 1, 2017, Donna Equipment signed a one-year, 8% interest-bearing note payable for $50,000. Assuming that Donna Equipment maintains its books on a calendar year basis, how much interest expense should be reported in the 2018 income statement? A. $1,333. B. $2,667. C. $3,000. D. $4,000. ?