IF YOURE NOT ANSWERING ALL THE QUESTIONS DONT ANSWER.

1. A corporation is a legal entity separate from its owners. True or False?

2. Victory Company purchases office equipment at the beginning of the year at a cost of $15,000. The machine is depreciated using the straight-line method. The machine's useful life is estimated to be 7 years with a $1,000 salvage value. The journal entry to record the first years depreciation is:

a. Debit Depreciation Expense $2,143, credit Accumulated Depreciation $2,143.

b. Debit Depreciation Expense $2,000, credit Office Equipment $2,000.

c. Debit Office Equipment $2,000, credit Accumulated Depreciation $2,000.

d. Debit Accumulated Depreciation $2,143; credit Office Equipment $2,143.

e. Debit Depreciation Expense $2,000, credit Accumulated Depreciation $2,000.

3. Sales of $350,000 and net sales of $323,000 could reflect sales discounts of $27,000. True or False?

4. The LIFO method of inventory valuation can result in a company's ending inventory being valued at less than the inventory's replacement cost because LIFO inventory leaves the oldest costs in inventory. True or False?

5.Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. Determine the machines' second year depreciation under the units-of-production method.

Multiple Choice

a. $16,900.

b. $16,000.

c. $17,400.

d. $18,379.

e. $20,880.

6. Jammer Company uses a perpetual weighted average inventory system and reports the following:

August 2	Purchase	10 units at $12 per unit.
August 18	Purchase	15 units at $15 per unit.
August 29	Sale	20 units.
August 31	Purchase	14 units at $16 per unit.

What is the per-unit value of ending inventory on August 31?

Multiple Choice

a. $12.00

b. $13.80

c. $15.42

d. $16.00

e. $17.74

7. The gain or loss from retirement of debt is reported under cash flows from operating activities on the statement of cash flows using the indirect method. True or False?

8. Sweet Companys outstanding stock consists of 1,000 shares of cumulative 5% preferred stock with a $100 par value and 10,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.

	Dividend Declared
year 1	$	2,000
year 2	$	6,000
year 3	$	32,000

The amount of dividends paid to preferred and common shareholders in year 3 is:

Multiple Choice

a. $7,000 preferred; $25,000 common.

b. $5,000 preferred; $27,000 common.

c. $15,000 preferred; $17,000 common.

d. $32,000 preferred; $0 common.

e. $0 preferred; $32,000 common.

9. After preparing a bank reconciliation, adjustments must be made for items reconciling the book balance. True or False?

10. Basic bank services do not include:

Multiple Choice

a. Bank accounts.

b. Bank deposits.

c. Checking.

d. Electronic funds transfer.

e. Petty cash management.

11. Outstanding checks refer to checks that have been:

Multiple Choice

a. Written, recorded, sent to payees, and received and paid by the bank.

b. Written and not yet recorded in the company books.

c. Held as blank checks.

d. Written, recorded on the company books, sent to the payee, but not yet paid by the bank.

e. Issued by the bank.

12. An advantage of FIFO is that it assigns the most recent costs to cost of goods sold, and does a better job of matching current costs with revenues on the income statement.

True or False?

13. In a perpetual inventory system, Cost of Goods Sold is credited during the closing process. True or False?

14. A company purchased equipment for $65,000 with a salvage value of $5,000 on April 1, Year 1. It has an estimated useful life of 5 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1?

Multiple Choice

a. $12,000.

b. $9,000.

c. $1,000.

d. $3,000.

e. $13,000.

15. Allowance for Doubtful Accounts is a contra asset; its balance is added to Accounts receivable. True or False?

16. Depreciation expense is higher in earlier years and income is higher in the later years when using accelerated versus straight-line methods. True or False?

17. Basic bank services such as bank accounts, bank deposits, and checking contribute to the control of cash. True or False?

18. Retained earnings:

Multiple Choice

a. Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception.

b. Can only be appropriated by setting aside a cash fund.

c. Represent an amount of cash available to pay shareholders.

d. Are never adjusted for anything other than net income or dividends.

e. Represents the amount shareholders are guaranteed to receive upon company liquidation.

19. Common Stock Dividend Distributable is a liability account. True or False?

20. Stock that was reacquired and is still held by the issuing corporation is called:

Multiple Choice

a. Capital stock.

b. Treasury stock.

c. Redeemed stock.

d. Preferred stock.

e. Callable stock.