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Answers to the 30 multiple choice questions 2 points each, 30 questions, for 60 point total out of 60 points 1 < please record 1
Answers to the 30 multiple choice questions | 2 points each, 30 questions, for 60 point total | |||||||||
out of 60 points | ||||||||||
1 | < please record | 1 | Which of the following is not reported under additional paid-in capital? | |||||||
2 | answer here | (a) | Paid-in capital in excess of par value. | |||||||
3 | (b) | Treasury Stock | ||||||||
4 | (c) | Paid-in capital in excess of stated value. | ||||||||
5 | (d) | Paid-in capital from treasury stock. | ||||||||
6 | ||||||||||
7 | 2 | Net pay is equal to: | ||||||||
8 | a. | gross pay minus all deductions. | ||||||||
9 | b. | all deductions plus all withholdings. | ||||||||
10 | c. | take-home pay plus all deductions. | ||||||||
11 | < please record | d. | payroll tax expense. | |||||||
12 | answer here | |||||||||
13 | ||||||||||
14 | 3 | In preparing a balance sheet, which of the following statements is true? | ||||||||
15 | a. Current liabilities are listed alphabetically. | |||||||||
16 | b. | Long-term liabilities are listed after Stockholders' Equity. | ||||||||
17 | c. | Intangible assets are listed in order of solvency. | ||||||||
18 | d. | Current assets are listed in order of their liquidity. | ||||||||
19 | ||||||||||
20 | 4 | Treasury shares plus outstanding shares equal | ||||||||
21 | issued shares. | |||||||||
22 | < please record | unissued shares. | ||||||||
23 | answer here | par value. | ||||||||
24 | authorized shares. | |||||||||
25 | ||||||||||
26 | 5 | A collection of $500 of an account receivable will cause: | ||||||||
27 | a. | cash to be credited for $500. | ||||||||
28 | b. | accounts receivable to be credited for $500. | ||||||||
29 | < please record | c. | revenues to be debited for $500. | |||||||
30 | answer here | d. | accounts receivable to be debited for $500. | |||||||
6 | After journalizing and posting the closing entries, | |||||||||
a. | balance sheet accounts have zero balances. | |||||||||
b. | all accounts have zero balances. | |||||||||
c. | retained earnings is up-to-date. | |||||||||
d. | permenant accounts have zero balances. | |||||||||
7 | A company began operations and purchased $5,000 of supplies. | |||||||||
By year-end, $2,250 was still on hand. The adjusting entry at year end would include a: | ||||||||||
a. | debit to Supplies for $5,000 | |||||||||
b. | credit to Supplies for $2,250 | |||||||||
c. | credit to Supplies for $2,750 | |||||||||
d. debit to Supplies Expense for $2,250 | ||||||||||
8. A company fails to recognize revenue it has earned but not yet received. The accounts impacted by this error are: | ||||||||||
a. | assets and liabilities | |||||||||
b. | liabilities and expenses | |||||||||
c. | liabilities and revenues | |||||||||
d. | assets and revenues | |||||||||
9 | Under the perpetual inventory system, if a purchaser returns goods | |||||||||
that had been purchased on account, the purchaser would: | ||||||||||
a. | debit inventory and credit accounts payable. | |||||||||
b. | debit accounts payable and credit inventory. | |||||||||
c. | debit inventory and credit accounts receivable. | |||||||||
d. | debit accounts receivable and credit inventory. | |||||||||
10 | If sales revenues are $200,000, cost of goods sold is $155,000, | |||||||||
and operating expenses are $30,000, what is the gross profit? | ||||||||||
a. | $15,000 | |||||||||
b. | $45,000 | |||||||||
c. | $75,000 | |||||||||
d. | $185,000 | |||||||||
11 | In a periodic inventory system the quantity of ending inventory is determined by: | |||||||||
a. | subtracting units sold from units purchased. | |||||||||
b. | taking a physical inventory count. | |||||||||
c. | looking at the balance in the inventory account. | |||||||||
d. | subtracting cost of goods sold from the beginning inventory balance. | |||||||||
12 | Which of the following statements is generally true when prices are rising? | |||||||||
a. | LIFO will result in less taxes than FIFO. | |||||||||
b. | FIFO reports a lower ending inventory than LIFO. | |||||||||
c. | LIFO reports a higher net income than FIFO. | |||||||||
d. | FIFO produces a lower net income than LIFO. | |||||||||
13 | Given the following data, if a periodic inventory system is used, what is the | |||||||||
weighted-average cost of ending inventory rounded to the nearest whole dollar? | ||||||||||
Sales revenue | 100 units at $10 per unit | |||||||||
Beginning inventory | 50 units at $ 8 per unit | |||||||||
Purchases | 90 units at $9 per unit | |||||||||
a. | $400 | |||||||||
b. | $346 | |||||||||
c. | $360 | |||||||||
d. | $1,210 | |||||||||
14 | Outstanding checks are checks: | |||||||||
a. | not yet paid by the bank. | |||||||||
b. | not yet deducted on the books. | |||||||||
c. | not yet issued by the payee. | |||||||||
d. | that have been paid by the bank. | |||||||||
15 | The internal control principle related to having different persons | |||||||||
authorize the purchase of goods and pay for the goods is known as: | ||||||||||
a. | establishment of responsibility. | |||||||||
b. | rotation of duties. | |||||||||
c. | independent internal verification. | |||||||||
d. | segregation of duties. | |||||||||
16 | The balance sheet reports accounts receivable at: | |||||||||
a. | lower-of-cost-or-market. | |||||||||
b. | historical cost. | |||||||||
c. | cash realizable value. | |||||||||
d. | market value. | |||||||||
17. Orion Corp. lends Maxi Inc. $20,000 on December 1, accepting a four-month, 6% | ||||||||||
note. Orion's annual accounting period ends on December 31. Orion's adjusting | ||||||||||
entry should include a: | ||||||||||
a. debit to Note Receivable for $300. | ||||||||||
b. credit to Interest Revenue for $400. | ||||||||||
c. debit to Interest Receivable for $100. | ||||||||||
d. credit to Interest Revenue for $1,200. | ||||||||||
18 | A machine that had cost $35,000 has a book value of $21,000. | |||||||||
It is sold for $40,000. The entry to record the sale should include a: | ||||||||||
a. | gain of $19,000 | |||||||||
b. | gain of $26,000 | |||||||||
c. | loss of $19,000 | |||||||||
d. | loss of $5,000 | |||||||||
19 | Which depreciation method generally results in the largest depreciation expense in the first full year of an asset's life? | |||||||||
a. | straight-line | |||||||||
b. | units-of-activity | |||||||||
c. | double-declining-balance | |||||||||
d. | either straight-line or double-declining-balance | |||||||||
20 | A company borrows $5,000 on November 1, 2008 giving a 10%, 180-day note payable. | |||||||||
The adjusting entry on December 31, 2008 would include a: | ||||||||||
a. | credit to Interest Payable for $83 | |||||||||
b. | credit to Interest Payable for $167 | |||||||||
c. | debit to Interest Expense for $250 | |||||||||
d. | credit to Cash for $83 | |||||||||
21 | If the market rate of interest is greater than the contractual rate of interest, bonds will be issued at: | |||||||||
a. | face value. | |||||||||
b. | a discount. | |||||||||
c. | a premium. | |||||||||
d. | carrying value. | |||||||||
22. What accounting characteristic, principle, concept, or constraint allows a corporation | ||||||||||
to record the purchase of a $10 wastepaper basket that is estimated to last 5 years as an expense | ||||||||||
in the year of acquisition? | ||||||||||
a. full disclosure | ||||||||||
b. comparability | ||||||||||
c. materiality | ||||||||||
d. reliability | ||||||||||
23. Determine net income for the period if beginning stockholders' equity is $19,000, | ||||||||||
dividends declared amount to $7,000, ending stockholders' equity is $37,000, and the corporation | ||||||||||
issued $1,000 of common stock. | ||||||||||
a. | $10,000.00 | |||||||||
b. | $27,000.00 | |||||||||
c. | $24,000.00 | |||||||||
d. | none of the above | |||||||||
24 | On the payment date, the payment of cash dividends will | |||||||||
a. | decrease stockholders' equity. | |||||||||
b. | increase current liabilities. | |||||||||
c. | decrease cash. | |||||||||
d. | increase common stock. | |||||||||
25. The statement of cash flows would disclose the cash payment to suppliers of inventory | ||||||||||
a. | nowhere on the statement. | |||||||||
b. | in the operating activities section. | |||||||||
c. | in the investing activities section. | |||||||||
d. | in the financing activities section. | |||||||||
26 | When an account becomes uncollectible and must be written off, | |||||||||
a. | Allowance for Doubtful Accounts should be credited. | |||||||||
b. | Accounts Receivable should be credited. | |||||||||
c. | Bad Debts Expense should be credited. | |||||||||
d. | Sales should be debited. | |||||||||
27 | The collection of an account that had been previously written off | |||||||||
under the allowance method of accounting for uncollectibles | ||||||||||
a. | will increase income in the period it is collected. | |||||||||
b. | will decrease income in the period it is collected. | |||||||||
c. | requires a correcting entry for the period in which the account was written off. | |||||||||
d. | does not affect income in the period it is collected. | |||||||||
28 | A debit balance in the Allowance for Doubtful Accounts | |||||||||
a. | is the normal balance for that account. | |||||||||
b. | indicates that actual bad debt write-offs have exceeded previous provisions for bad debts. | |||||||||
c. | indicates that actual bad debt write-offs have been less than what was estimated. | |||||||||
d. | cannot occur if the percentage of sales method of estimating bad debts is used. | |||||||||
29 | The sale of receivables by a business | |||||||||
a. | indicates that the business is in financial difficulty. | |||||||||
b. | is generally the major revenue item on its income statement. | |||||||||
c. | is an indication that the business is owned by a factor. | |||||||||
d. | can be a quick way to generate cash for operating needs. | |||||||||
30 | Retailers generally consider sales from the use of national credit card sales such as VISA or Mastercard, as a | |||||||||
a. | credit sale. | |||||||||
b. | collection of an accounts receivable. | |||||||||
c. | cash sale. | |||||||||
d. | collection of a note receivable |
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