Answer the following 30 questions please.

Q1. On November 1, Year One, a company is paid $12,000 in advance to do a job for a customer. The job has ten separate steps. The first four steps were completed in Year One and the remaining six steps were completed in Year Two. The accountant mistakenly believed that this was just one big job and recorded it in that fashion. However, each of the ten steps was really an individual job and should have been accounted for in that way. Which of the following statements is true?

Select one:

a. At the end of Year One, the company's liabilities are understated.

b. At the end of Year Two, the company's assets are overstated.

c. At the end of Year Two, the company's retained earnings are overstated.

d. At the end of Year One, the company's retained earnings are understated.

e. At the end of Year Two, the company's net income is understated.

Q2. Carter Co. placed an order for a machine on January 5. The company received the machine on January 20. The company installed the machine on 29 January and started production from 1 February. The company paid the amount due for the machine on February 5. On which date will Carter recognize the liability for the purchase of machine?

Select one:

a. 20th January

b. 1st February

c. 29th January

d. 5th February

e. 5th January

Question 3

Coastal Corporation pays salaries of $30,000 to its employees. No accrual has been made for this amount. What is the financial impact of this transaction?

Select one:

a. Increase Salary Expense - Decrease Cash

b. Increase Salary Payable - Decrease Salary Expense

c. Increase Prepaid Salary - Decrease Cash

d. Increase Salary Expense - Decrease Salary Payable

e. Increase Cash - Decrease Salary Payable

Question 4

The communication of financial information within an organization so that internal decisions can be made in an appropriate manner is known as:

Select one:

a. cost analysis.

b. financial accounting.

c. information analysis.

d. managerial accounting.

e. tax accounting.

Question 5

Xander Company began the year with $100,000 in inventory and $210,000 in accounts payable. During the year, Xander incurred cost of goods sold of $1,200,000. Xander ended the year with $105,000 in inventory and $200,000 in accounts payable. How much cash did Xander pay for purchases during the year?

Select one:

a. $1,210,000

b. $1,205,000

c. $1,195,000

d. $1,200,000

e. $1,215,000

Question 6

If a company pays for inventory previously acquired on account:

Select one:

a. Accounts Payable should be debited.

b. Cash should be debited.

c. Inventory should be credited.

d. Cost of Goods Sold should be credited.

e. Unearned Revenue should be debited.

Question 7

Coffee-cup Corporation received an invoice on May 2, 2012, stating the discount terms as 2/10, n/30. The company settled the invoice amount by paying $1,470 on May 10, 2012. What is the amount of discount received by Coffee-cup Corporation?

Select one:

a. $50

b. $150

c. $147

d. $29.4

e. $30

Question 8

Which of the following refers to the process whereby a liability is increased each period by unpaid interest?

Select one:

a. Ordinary annuity

b. Amortizing

c. Annuity due

d. Present value

e. Compounding

Question 9

A party that pays cash for the use of an asset in a lease contract is called a(n):

Select one:

a. lessor.

b. debtor.

c. lessee.

d. licensor.

e. franchisor.

Question 10

Oliver Company purchases inventory costing $34 on September 14. The company spends $5 to transfer the inventory to its store and an additional $8 to set it up. One of Oliver's employees accidentally dented an item that had to be fixed at a cost of $3. What would be the amount of inventory purchase?

Select one:

a. $39

b. $50

c. $34

d. $47

e. $42

Which of the following is a criteria used to determine if a lease should be recorded as a capital lease or not?

Select one:

a. The lessee gets ownership of the asset at the end of the lease.

b. The lease payments of the lessee will make for at least 75 percent of the amount asked for by the lessor.

c. The lease payments must cover at least 80 percent of the value of the asset.

d. The lease term covers at least 90 percent of the asset's life.

e. The lease contract allows the lessee to buy the property above its expected fair value at a future date.

Question 12

The Financial Accounting Standards Board (FASB) is:

Select one:

a. in charge of the creation of IFRS.

b. a governmental organization.

c. responsible for amending present accounting rules, but doesn't have the right to pass new rules.

d. an independent group supported by the U.S. government, various accounting organizations, and many private businesses.

e. against the switching of financial reporting from U.S GAAP to IFRS in United States.

Question 13

Which of the following is a financial statement produced by companies?

Select one:

a. Statement of cash flows

b. Expense statement

c. Assessment sheet

d. Tax statement

e. Statement of gross Income

Question 14

Which of the following accounts shows the difference between the lifelong earnings of a company and its payments to owners?

Select one:

a. Retained Earnings

b. Common Stock

c. Liabilities

d. Dividends

e. Net Income

Question 15

Boston Company pays salaries of $2,000 to employees. No accrual has been made for this amount. Which of the following is true of this transaction?

Select one:

a. Salaries Expense increases by $2,000; Salaries Payable decreases by $2,000

b. Cash increases by $2,000; Salaries Payable decreases by $2,000

c. Cash decreases by $2,000; Salaries Expense decreases by $2,000

d. Salaries Expense increases by $2,000; Cash decreases by $2,000

e. Cash decreases by $2,000; Salaries Payable increases by $2,000

Question 16

On February 2, Alfred Corporation issues 900 shares of $75 par value preferred stock for $80 per share. The stock has a dividend rate of 5 percent. On April 5, Alfred issues 500 more shares of this stock for $82 per share. Alfred pays dividends on October 9. Which of the following is the total amount of dividends paid by Alfred on its preferred stock?

Select one:

a. $5,650

b. $5,250

c. $5,000

d. $6,000

e. $7,500

Question 17

Haley's Hair Salon specializes in cuts and color for all hair types. Haley also sells beauty products. Last week, Haley borrowed $10,000 from the bank to buy new equipment for the salon. Which of the following is a true statement?

Select one:

a. Haley earns revenue by cutting hair.

b. If Haley sells the equipment, the amount realized from the sale will be reported as revenue.

c. The $10,000 received from the bank is revenue for Haley.

d. The amount borrowed from bank will increase the amount of owners' equity.

e. The beauty products Haley has in stock are an expense to her.

Question 18

Which of the following statements is true of financial information?

Select one:

a. It should always be exactly accurate.

b. It is free from uncertainties.

c. It can be useful even if it is not exact.

d. It does not represent the likeliness of an organization, if it is not exact.

e. It almost always does contains material misstatements.

Question 19

Which of the following would be capitalized to equipment account?

Select one:

a. Discount received on the purchase of the equipment

b. Inventory produced by the equipment

c. Interest paid on loan borrowed to purchase the equipment

d. Depreciation cost

e. Cost of training employees on the proper use of equipment

Question 20

Hudson Corporation created a technology in the year 2008 and got it patented. The legal cost for getting the patent was $60,000. The useful life of the patent is 10 years. The company was acquired by Meditech on January 1, 2012. The fair value of the patent on the date on acquisition was $300,000. Determine the amount paid by Meditech towards patent on acquisition.

Select one:

a. $-0-

b. $36,000

c. $300,000

d. $60,000

e. $24,000

The group primarily responsible for setting accounting standards in the United States is the:

Select one:

a. Standing Interpretations Committee (SIC)

b. Securities and Exchange Commission (SEC)

c. American Institute of Certified Public Accountants (AICPA)

d. Financial Accounting Standards Board (FASB)

e. International Accounting Standards Board (IASB)

Question 22

Marlin Corporation uses the percentage of receivables method to estimate its uncollectible accounts. Marlin's ending accounts receivable amounted to $50,000 while the balance of the allowance for doubtful accounts was $3,000 (credit balance). Marlin estimates that 8% of receivables will never be collected. What is the bad debt expense of Marlin Corporation?

Select one:

a. $400

b. $1,400

c. $1,600

d. $1,000

e. $600

Question 23

Which of the following is a reason that reasonable assurance by an auditor is adequate?

Select one:

a. A CPA from the auditing firm always sits at the client location.

b. Organizations provide all invoices to auditors to aid them uncover any problem.

c. Financial statements' amounts are based on material evidence.

d. The FASB has determined that reasonable assurance is adequate.

e. Informed decision makers understand that reasonable assurance is all that is provided.

Question 24

Hercules Company purchased land and a building for $350,000. The fair value of the land was $240,000 and the fair value of the building was $160,000. Determine the amount at which Hercules will record the building.

Select one:

a. $240000

b. $210,000

c. $160,000

d. $140,000

e. $350,000

Question 25

A deferred income tax liability on a balance sheet indicates:

Select one:

a. a company is highly leveraged.

b. a low debt-equity ratio.

c. a company's policy towards debt and tax payment.

d. a company didn't have enough funds to pay its income tax expense in that year.

e. a company has delayed its current payment of income tax amount to a future date.

Question 26

Phyllis Company purchases an asset on December 14, 2014 for $3,000. The estimated life is 5 years with no salvage value. The company does not apply the half-year convention, but rounds depreciation to the nearest month when assets are bought and sold during the year. What depreciation expense should be recorded in 2014?

Select one:

a. $50

b. $3,000

c. $600

d. $1,000

e. $500

Question 27

A company makes cash payment for ads which will run over the next three months. The amount paid for advertising should be reported as a(an):

Select one:

a. dividend.

b. loss.

c. asset.

d. expense.

e. liability.

Question 28

Probable future sacrifice of economic benefits arising from present obligations is termed as a(n):

Select one:

a. revenue.

b. net asset.

c. asset.

d. liability.

e. expense.

Question 29

Sparta Inc., a retail company, located in U.S. sold products on account for 440,000 rupees on November 30 to Global Inc., an Indian company. The amount will be paid in 60 days. On the date of sale, one dollar was equal to 50 rupees. On December 31, when Sparta prepares its financial statements, the exchange rate is 45 rupees to $1. At what amount should the account receivable be recorded on November 30?

Select one:

a. $40,000

b. $22,000,000

c. $440,000

d. $8,800

e. $9,778

Question 30

Creditors use financial information to predict whether a:

Select one:

a. company will be able to issue additional shares.

b. company will be able to pay salaries.

c. company will be able to pay dividends.

d. company's stock price will increase.

e. company will be able to pay interest.