1. Which account below would be credited to record this transaction: purchase merchandise for resale on cred?

A. Inventory B. Cash C. Accounts payable D. Accounts receivable E. None of the above

2. Which ratio is Wall Streets favorite?

A. Inventory turnover B. Receivables turnover C. Current D. Price-earnings E. None of the above

3.Which of the following is a snapshot of the financial position of a company?

A. Balance sheet B. Income statement C. Statement of retained earnings D. Cash flow statement E. None of the above

4. If a company pays out more than the income tax incurred as shown in the income tax liability decrease, the effect on cash is a

A. Decrease B. Increase C. No effect D. None of the above

5. When shares are sold from one shareholder to another in the open market; the following account is impacted

A. Capital stock B. Retained earnings C. Long-term liabilities D. Current assets E. None of the above

6. Ginger Ellison invested $10,000 in a bank account at Offshore band. The account pays 3% interest compounded annually. How much will Ginger have in five years? (round to the nearest dollar)

A. 11593 B. 11108 C. 10123 D. 12519 E. none of the above

7. Information that can make a difference to the decision at hand is considered to be:

A. Reliable B. Comparable C. Relevant D. Understandable E. None of the above

8. Which of the following ratios is not useful for comparison purposes?

A. Return on assets B. Price earnings ratio C. Return on equity D. Earnings per share E. None of the above

9. The quality that ensures that information is reasonably free from error is:

A. Reliability B. Relevant C. Understandability D. Consistent E. None of the above

10. Which of the following increases cash?

A. Increase in inventory B. Increase in accounts receivable C. Increase in accounts payable D. None of the above

11. The stock market values a company based on which of the following accounts?

A. Assets B. Liabilities C. Capital stock D. Retained earnings E. None of the above

12. Which of the following ratios measures operating performance?

A. Price-earnings B. Current C. Receivables turnover D. Operating cycle E. None of the above

13. Which of the following ratios measures liquidity?

A. Current B. Payout C. Gross margin D. Asset turnover E. None of the above

14. Which of the following is a source of cash?

A.Increase in accounts receivable B. Increase in inventories C. Increase in accounts payable D. None of the above

15. Ellis industries is a large, multinational company located in the US. Elliss financial statements are in US dollars. This GAAP is known as:

A. monetary concept B. economic entity C. conservatism D. matching E. none of the above

16. Left-hand entries increase

A. asset accounts B. liability accounts C. owners equity accounts D. both b and c E. none of the above

17. Jesse Ellis invested $4000 in a savings account that paid 6% interest compounded annually for six years. At the end of six years, Jesse will have approximately:

A. 5103 B. 5674 C. 5506 D. 4903 E. none of the above

18. The ratio that shows how much in excess of current earnings investors are willing to pay for company stock is:

A. Payout B. Current C. Price-earnings D. Return on equity E. None of the above

19. Which of the following increases cash?

A. Issuance of long-term debt B. Acquisition of property plant and equipment C. Payment of dividends D. Decrease in short-term debt E. None of the above

20. Which of the following is one gauge of the companys ability to meet its short-term obligations?

A. Gross margin B. Asset turnover C. Profit margin D. Working capital E. None of the above

21. Projecting inventory levels for next year would be an example of

A. Financial accounting B. Managerial accounting C. Tax accounting D. None of the above

22. Grayson is saving for a used car. He needs 14000. How much must he invest at 3% annual interest rate to have 14,000 in two years. Round to the nearest dollar.

A. 12983 B. 12417 C. 13720 D. 13196 E. none of the above

23. Credit sales increase

A. cash B. accounts receivable C. owners equity D. both b and c E. none of the above

24. A gain on the sale of an asset is subtracted from net income to determine cash flow from operating activities because of:

A. Double counting B. Asset sales require a basis C. Losses are cash flow neutral D. None of the above

25. Which of the following is not an expense

A. Utilities B. Insurance C. Dividends D. Cost of goods sole E. None of the above

26. John Vincent invested 10000 in a savings account. The account pays 4.5% annual interest. John will have how much in the account at the end of 10 years? Round to the nearest dollar.

A. 15530 B. 14984 C. 16010 D. 16311 E. none of the above

27. Holly Regis invested 10000 in a savings account that paid an annual interest rate of 6% compounded monthly. In three years, Holly will have approximately

A. 11967 B. 10623 C. 11415 D. 11067 E. none of the above

28. AGR Corporation signed a two-year lease for the building that the company occupies. The account that should be debited is

A. Prepaid expenses B.Cash C. Accounts payable D. Building E. None of the above

29. Bart is saving for college. He needs 20000 for the first year. How much must he invest at a 5% annual interest rate to have 20000 in five years. Round to the nearest dollar

A. 14982 B. 15016 C. 15023 D. 15671

30. Which organization is recognized today as the authoritative voice of accounting rules and principles?

A. Sec B. Aicpa C. Fasb D. Aaa E. None of the above

31. Which of the following statements represents a flow concept?

A. Balance sheet B. Income statement C. Statement of retained earnings D. Inventory statement E. None of the above

32. The quality that allows quantitative assessment of the similarities and differences among enterprises is known as

A. comparability B. consistency C. reliability D. relevance E. none of the above

33. Ellen Fetter invested 5000 in a savings account that paid 5% interest compounded annually. She kept the account for three years. At the end of three years, Ellen will have approximately?

A. 6103 B. 5444 C. 5414 D. 5788

34. If the company pays out more than the cost it incurs, the effect on cash is a

A. decrease B. increase C. no effect D. none of the above

35. Which of the following is a source of cash?

A. Issuance of long-term debt B. Increase in inventories C. Decrease in accounts payable D. Increase in accounts receivable E. None of the above

36. Profit margin and asset turnover can be combined to create

A. return on assets B. return on equity C. earnings-per-share D. price earnings ratio E. none of the above

37. Karen Quigley is saving for new car. The car cost 22000. How much must Karen invest in a savings account that pays 4% annually to have the 22,000 in three years? Round to the nearest dollar.

A. 20147 B. 19107 C. 19558 D. 19328 E. none of the above

38. The taxes payable account increased from the beginning of the accounting period to the end of the accounting period. This impacts cash flow through a

A. Decrease B. Increase C. Has no effect D. None of the above

39. Arson incorporateds balance sheet lists assets at historical cost less accumulated depreciation. This gaap is known as:

A. monetary concept B. economic entity C. going concern D. conservatism E. none of the above

40. The account that reflects the amount the owners have invested in the business is?

A. Capital stock B. Retained earnings C. Long-term liabilities D. Long-term assets E. None of the above

41. Investments representing long-term holdings of securities would appear on the balance sheet as

A. Long-term liabilities B. Long-term assets C. Capital stock D. Retained earnings E. None of the above

42. Which of the following is added to net income to calculate cash flow?

A. Depreciation B. Increase in accounts receivable C. Increase in inventory D. Decrease in accounts payable E. None of the above

43. A customer pays on an account receivable. The account that should be credited is:

A. Inventory B. Cash C. Accounts payable D. Accounts receivable E. None of the above

44. Blackson Incorporated signed a three-year lease for the building that Blackson occupies and paid the first six months in advance. The account that should be debited is

A. Prepaid expenses B. Cash C. Building D. Accounts payable E. None of the above

45. Formis, Inc. estimates the useful life of each asset purchased and depreciates the asset over the useful life. This GAAP is known as

A. Monetary concept B. Economic entity C. Going concern D. Matching E. None of the above