1).On July 1, 2015, Canine Company signed a two-year $50,000 note payable with 8 percent interest. At due date, July 1, 2017, the principal and interest will be paid in full. Interest expense should be reported on the income statement for the year ended December 31, 2015, in the amount of

$ 2,250.

$ 2,000.

$ 4,000.

$ 0.

None of the above is correct.

2.

Which of the following is a "contra" stockholders' equity account?

Retained earnings.

Preferred Stock.

Treasury stock.

Contributed capital in excess of par.

None of the above is a contra stockholders' equity account.

3.

The balance sheet of Wane Company showed the following data about its common stock, par $1: authorized shares, 10,000,000; outstanding shares, 4,300,000; and issued shares 4,700,000. Therefore, the number of treasury stock shares was

0.

4,700,000.

4,300,000.

400,000.

None of the above is correct.

4.

Coca-Cola reported net income in 2015 equal to $4,875 million. They had 3,500 million shares on average that were issued and average shares held in treasury equal to 1,000 million. Their earnings per share for 2015 equals

$2.00

$1.95

$1.39

None of the above.

5.

The base amount in preparing a common-size (or component percentages) income statement is usually

cost of goods sold.

gross profit.

net income.

net sales.

All of the above are appropriate.

6.Newton Company reported total sales revenue of $55,000 and total expenses amounting to $45,000 (i.e., net income $10,000) on its income statement for the year ended December 31, 2015. During 2015, accounts receivable decreased by $4,000, merchandise inventory decreased by $6,000, accounts payable increased by $2,000 and depreciation of $8,000 was recorded. Therefore, based only on this information, the net cash flow from operating activities for 2015 was:

$10,000.

$18,000.

$19,000.

$30,000.

None of the above is correct.

7.Which of the following ratios usually is not considered to be a test of profitability?

Current ratio.

Profit margin.

Return on assets.

Earnings per share.

None of the above is correct.

8.

Which of the following represents the shares currently in the hands of investors?

Authorized shares

Issued shares

Outstanding shares

Unissued shares

Treasury shares

9.

The federal government requires

only the employer to pay FICA taxes.

only the employee to pay FICA taxes.

both the employer and the employee to pay FICA taxes.

neither the employer nor the employee to pay FICA taxes.

only corporations to pay FICA taxes.

10.

Common stockholders have the right to

sell their stock.

share in any dividends distributed to common stockholders.

have the first opportunity to purchase any additional shares of common stock issued by the corporation.

vote at stockholders' meetings.

All of the above are true.