1. Which of the following is FALSE? (Points : 1)

Accounts payable always require payment of interest Notes and bonds require interest to be paid periodically Vendors and suppliers help to finance operations Most businesses maintain a normal amount of accounts payable.

2. An employee earns $18 per hour and 1 1/2 times that rate for all hours worked in excess of 40 hours per week. Assume that the employee works 46 hours during the week and the FICA tax rate is 7% and federal income tax withheld is $185. The employee's net pay is __________. (Points : 1)

$635.26 $586.04 $882.00 None of these choices

3. If the contract rate is lower than the market rate, the bonds will sell at __________. (Points : 1)

a discount a premium face amount Cannot be determined from facts given

4. RR Inc. issued $100,000, 8%, 10-year bonds on January 1, 2008. The bonds were issued at a discount of $24,600. Using the straight-line method, what is the annual amount of interest expense for these bonds? (Points : 1)

$10,460 $8,000 $5,540 Cannot be determined from the information given

5. Which of the following is NOT a source of paid-in capital? (Points : 1)

Preferred stock Common stock No par stock All answers are sources of paid-in capital

6. Assume that Corporation X has 20,000 shares of $10 par value cumulative 6% preferred stock and 5,000 shares of common stock outstanding. No dividends were paid in 2009 and 2010. In 2011, the board of directors declares dividends of $50,000. What is the total cash paid to the preferred stockholders in 2011? (Points : 1)

$12,000 $24,000 $36,000 Zero

7. Stock dividends are: (Points : 1)

distributions of common stock to holders of common stock. distributions of cash or other assets to shareholders normally recorded at the par value of the stock issued required of companies periodically, according to their corporate charters

8. Mickey Mouse Co. announced a 2-for-1 stock split of its $20 par value common stock, which is currently trading for $60 per share. What is the new par value and the estimated market price of the stock after the split? What is the New Par Value and the Estimated market price of the stock? (Points : 1)

$10, $30 $20, $30 $10, $60 $40, $120

9. Which of the following statements is NOT true regarding current liabilities? (Points : 1)

Obligations due for a period of time greater than one year. Will be paid out of current assets Arise from receiving goods or services prior to making payment Include taxes payable and wages payable.

10. A major profitability measure that is reported in the financial statements and is followed closely by the financial press is: (Points : 1)

net income. income from operations profit margin earnings per share

Use the following information to answer questions 1-5.

The following information is for employee William Heedy for the week ended March 15.

Total hours worked: 48 Rate: $16 per hour, with double time for all hours in excess of 40 Federal income tax withheld: $200 United Fund deduction: $50 Cumulative earnings prior to current week: $6,400 Tax rates: Social security: 6% on maximum earnings of $106,800 Medicare tax: 1.5% on all earnings; on both employer and employee State unemployment: 3.4% on maximum earnings of $7,000; on employer Federal unemployment: 0.8% on maximum earnings of $7,000; on employer

11. What is WIlliam's total earnings? (Points : 3)

$640.00 $896.00 $256.00 $900.00

12. What is WIlliam's total deductions? (Points : 3)

$200.00 $50.00 $317.30 $250.00

13. What is William's net pay? (Points : 3)

$578.80 $640.00 $580.00 $600.00

14. What is the employers FICA based on Williams pay? (Points : 3)

$70.00 $67.20 $20.40 $0

15. What is the employers Federal Unemployment based on Williams pay? (Points : 3)

$0 $13.44 $7.00 $4.80