1. The receivable that is usually evidenced by a formal instrument of credit and may include interest is a(n)

a. Income tax receivable.

b. Accounts receivable.

c. Trade receivable.

d. Note receivable.

2. An alternative name for Bad Debt Expense is:

a. Uncollectible Accounts Expense.

b. Credit Loss Expense.

c. Deadbeat Expense.

d. Collection Expense.

3. A characteristic of a fixed asset is that it is:

a. Intangible.

b. Used in the operations of a business.

c. A short-term investment.

d. Held for sale in the ordinary course of the business.

4. Which of the following should be included in the acquisition cost of a piece of equipment?

a. Installation Costs

b. Transportation Costs

c. Testing costs prior to placing the equipment into production

d. All of these choices are correct.

5. When the amount of use of a fixed asset varies from year to year, the method of determining depreciation expense that best matches allocation of cost with revenue is:

a. Declining-balance.

b. Units-of-production.

c. Straight-line.

d. MACRS.

6. The most widely used depreciation method is:

a. Straight-line.

b. Double-declining-balance.

c. Units-of-production or double-declining-balance.

d. Units-of-production.

7. Which of the following are examples of intangible assets?

a. Patents

b. Goodwill

c. Copyrights

d. All the above

8. Current liabilities are

a. Due, but not payable for more than one year.

b. Due and receivable within one year.

c. Due, but not receivable for more than one year.

d. Due and payable within one year.

9. Notes may be issued

a. To creditor's to temporarily satisfy an account payable created earlier.

b. When borrowing money.

c. When assets are purchased.

d. All of these choices are correct.

10. The journal entry a company uses to record the payment of an interest-bearing note is:

a. Debit Cash; credit Notes Payable.

b. Debit Notes Payable and Interest Receivable; credit Cash.

c. Debit Accounts Payable; credit Cash.

d. Debit Notes Payable and Interest Expense; credit Cash.

11. Which of the following taxes would be deducted in determining an employee's net pay?

a. FICA taxes

b. FUTA taxes

c. SUTA taxes

d. All of these choices are correct.

12. Which of the following is not characteristic of a corporation?

a. Cash dividends paid by a corporation are deductible as expenses by the corporation.

b. A corporation can own property in its name.

c. Corporations are required to file federal income tax returns.

d. The financial loss that a stockholder may suffer from owning stock in a public company is limited.

13. The ability of a corporation to obtain capital is:

a. About the same as a partnership.

b. Enhanced because of limited liability and ease of share transferability.

c. Restricted because of the limited life of the corporation.

d. Less than a partnership.

14. A Stock split of 1:3 would:

a. Have no effect on the ownership of a corporation.

b. Dilute the ownership of a corporation.

c. Reduce the ownership of a corporation.

15. The Crafter Company has the following assets and liabilities:

ASSETS
Cash	$28,000
Accounts receivable	15,000
Inventory	20,000
Equipment	50,000
LIABILITIES
Current portion of long-term debt	10,000
Accounts payable	2,000
Long-term debt	25,000

Determine the quick ratio (rounded to one decimal point).

a.3.6

b.2.3

c.3.3

d.5.3