Question
2. Employee Stock Ownership Plans (ESOPs): MULTIPLE CHOICE a. will not dilute the proportional ownership of existing shareholders. b. may be created for a temporary
2. Employee Stock Ownership Plans (ESOPs):
MULTIPLE CHOICE
| a. will not dilute the proportional ownership of existing shareholders. | ||
| b. may be created for a temporary purpose. | ||
| c. do not produce any tax advantages for plan participants. | ||
| d. may borrow funds from a bank. |
3. The following relate to Data Original in 2008. What is the ending inventory?
| Purchases | $540,000 |
| Beginning Inventory | 80,000 |
| Customer Returns | 10,000 |
| Sales | 800,000 |
| Cost of Goods Sold | 490,000 |
Multiple Choice
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4. Which of the following will be disclosed in the reconciliation of retained earnings?
MULTIPLE CHOICE
| a. net income / net loss | ||
| b. adjustment for an error of a prior period | ||
| c. dividends | ||
| d. all of the answers are correct |
5. ____?____ are normally classified as a current liability on the balance sheet.
MULTIPLE CHOICE
| a. Prepaid expenses | ||
| b. Land | ||
| c. Inventories | ||
| c. Accounts payable |
6. ___?__ is considered a tangible asset.
MULTIPLE CHOICE
a. Equipment
b. A patent
c. A copyright
d. Goodwill
7. If the Investor Company owns 20% of the stock of Investee Company and Investee Company reports profits of $100,000, then Investor Company reports equity income of:
MULTIPLE CHOICE
| a. $80,000 | ||
| b. $20,000 | ||
| c. $40,000 | ||
| d. $60,000 |
8. A quasi-reorganization:
MULTIPLE CHOICE
| a. may produce a positive balance in retained earnings | ||
| b. will restate retained earnings to zero. | ||
| c. should appear on the income statement as part of continuing operations | ||
| d. requires the approval of a bankruptcy court |
9. Which of the following is seldomly a preferred stock characteristic?
MULTIPLE CHOICE
| a. voting rights | ||
| b. call ability by the issuer | ||
| c. accumulation of dividends | ||
| d. preference in liquidation |
10. Gross profit is the difference between:
MULTIPLE CHOICE
| a. net income and operating income | ||
| b. revenues and expenses | ||
| c. sales and cost of goods sold | ||
| d. gross sales and sales discounts
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