Hopper, Inc. Use the information from Hopper, Inc. to answer the following question.

	2018	2017
Operating revenues	$1,900,000	$1,600,000
Operating expenses	1,400,000	1,100,000
Income taxes	200,000	200,000

Read the information about Hopper, Inc. Which of the following statements is the best answer regarding the company's profit margin?

a. The profit margin was 31.5% in 2018.

b. The profit margin was 15.8% in 2017.

c. The profit margin was 31.5% in 2017.

d. The profit margin was 15.8% in 2018.

Which one of the following sections on a statement of cash flows is used to report the cash flow effects of buying and selling property, plant, and equipment?

a. Financing Activities

b. Operating Activities

c. Investing Activities

d. Profit Activities

Relevant information can be quantitative or qualitative. In deciding whether to go to college part time or full time, which of the following is a qualitative factor for a student?

a. The price of football tickets

b. The cost of tuition

c. "Good Student" discounts on auto insurance rates

d. The opportunity to make friends

If the current ratio is 2.5 to 1, net income is $6,000, and current liabilities are $18,000, how much is working capital?

a.$14,000

b.$27,000

c.$6,000

d.$45,000

Which one of the following sections is least likely to be found in a corporate annual report?

a. Notes to the Financial Statements

b. Management's Discussion and Analysis

c. Report of Independent Accountants

d. Forecasts of Cash Flows and Earnings

What is the correct method for calculating working capital?

a. Current Assets + Current Liabilities

b. Total Assets Total Liabilities

c. Current Assets Current Liabilities

d. Current Assets Total Liabilities

A cancelled check would be a source document for which of the following?

a. Recording a cash payment to a creditor

b. Recording accrued payroll

c. Recording cash received on a customer account

d. Recording a purchase of inventory on credit

The Casan Company purchased a delivery van for $100,000 in cash. What is the effect on current assets?

a. No effect on current assets

b. Decrease in current assets

c. Increase in current assets

d. Unable to determine

Given that Carlson Corp.'s current ratio is 3 to 2, what is the effect of obtaining a patent from the inventor in exchange for shares of stock in Carlson Corp.?

a. The current ratio would remain the same.

b. The current ratio would decrease.

c. The effect of the current ratio cannot be determined.

d. The current ratio would increase.

Wolfe Inc. Wolfe Inc. reports these account balances at January 1, 2017:

Retained Earnings	$ 49,000
Accounts Receivable	20,000
Accounts Payable	24,000
Capital Stock	185,000
Land	153,000
Cash	13,000
Equipment	20,000
Notes Payable	28,000
Buildings	80,000

See the account balances for Wolfe Inc. On January 31, Wolfe collected $12,000 of its accounts receivable and paid $11,000 on its note payable. In Wolfe's trial balance prepared on January 31, 2017, the total of the credit column is

a.$286,000.

b.$297,000.

c.$287,000.

d.$275,000.

XYZ Corp. made cash sales to customers. What effect does this transaction have on the accounting equation?

a. There is no effect on the accounting equation as one asset account increases while another asset account decreases.

b. Assets increase and stockholders' equity increases.

c. Liabilities increase and stockholders' equity increases.

d. Assets increase and liabilities increase.

32. MC.03-107

Squidly Products sold and delivered modems to Detail Solutions for $6,600 to be paid by Detail Solutions in three equal installments over the next three months. The journal entry made by Squidly to record this transaction will include

a. a credit to Cash for $6,600.

b. a debit to Accounts Receivable for $6,600.

c. a debit to Sales Revenue for $6,600.

d. a debit to Accounts Receivable for $2,200.

The purchase of office equipment on credit has what effect on the accounting equation?

a. Assets decrease and stockholders' equity decreases.

b. Liabilities increase and stockholders' equity decreases.

c. Assets increase and liabilities increase.

d. Assets decrease and liabilities decrease.

The term "chronological order" is best associated with

a. credit entries.

b. capital stock.

c. a trial balance.

d. a journal.

Monaco & Associates Use the following five transactions for Monaco & Associates to answer the following question.

Oct. 1		Bills are sent to clients for services provided in September in the amount of $800.
9		Dravo Co. delivers office furniture ($1,060) and office supplies ($160) to Monaco leaving an invoice for $1,220.
15		Payment is made to Dravo Co. for the furniture and office supplies delivered on October 9.
23		A bill for $430 for electricity for the month of September is received and will be paid on its due date in November.
31		Salaries of $850 are paid to employees.

See the transactions for Monaco & Associates. The journal entry to record the October 9 transaction will include a credit of $1,220 to

a. Accounts Payable.

b. Furniture and Supplies.

c. Administrative Expenses.

d. Cash.

Which of the following statements regarding the activities of Casion Corp. is true?

a. Expenses decrease Casion's stockholders' equity.

b. Revenues decrease Casion's stockholders' equity.

c. Expenses increase Casion's stockholders' equity.

d. None of these choices are correct.

All of the following accounts have normal debit balances except

a. Dividends.

b. Sales.

c. Accounts Receivable.

d. Office Supplies Expense.

Sunnyside Vacations has a $1,200 account receivable from John Smith. On September 18, John makes a partial payment of $1,100 to Sunnyside. The journal entry made on September 18 by Sunnyside to record this transaction includes

a. a debit to the Cash account of $1,150.

b. a debit to the Accounts Receivable account of $1,150.

c. a credit to the Accounts Receivable account of $1,050.

d. a credit to the Accounts Receivable account of $1,100.

Credit entries are used to

a. decrease liability accounts.

b. increase asset accounts.

c. increase liability accounts.

d. decrease revenue accounts.

Payment is made for land purchased earlier on credit. For this transaction, identify the effect on the accounting equation.

a. Liabilities increase and stockholders' equity decreases.

b. Liabilities decrease and assets decrease.

c. Assets increase and stockholders' equity increases.

d. Assets increase and liabilities increase.