In Merfs April 30, 20X1, balance sheet, a note receivable was reported as a noncurrent asset and the related accrued interest for eight months was reported as a current asset. Which of the following descriptions would fit Merfs receivable classification?

a. Both principal and interest amounts are due on August 31, 20X1, and August 31, 20X2.

b. Principal is due August 31, 20X2, and interest is due August 31, 20X1, and August 31, 20X2.

c. Principal and interest are due December 31, 20X1.

d. Both principal and interest amounts are due on December 31, 20X1, and December 31, 20X2.

Mill Co.s trial balance included the following account balances at December 31, 20X1:

Accounts payable $15,000 Dividends payable 1/31/X2 8,000

Bond payable, due 20X2 22,000 Notes payable, due 20X3 20,000

What amount should be included in the current liability section of Mills December 31, 20X1, balance sheet?

a. $45,000 c. $65,000

b. $51,000 d. $78,000

Which of the following would be disclosed in the summary of significant accounting policies disclosure note?

	Composition of Plant Assets	Inventory Pricing
a.	No	Yes
b.	Yes	No
c.	Yes	Yes
d.	No	No

4. How are managements responsibility and the auditors report represented in the standard auditors report?

	Managements Responsibility	Auditors Responsibility
a.	Implicitly	Explicitly
b.	Implicitly	Implicitly
c.	Explicitly	Explicitly
d.	Explicitly	Implicitly

At December 30, Vida Co. had cash of $200,000, a current ratio of 1.5:1, and a quick ratio of .5:1. On December 31, all the cash was used to reduce accounts payable. How did this cash payment affect the ratios?

	Current Ratio	Quick Ratio
a.	Increased	No effect
b.	Increased	Decreased
c.	Decreased	Increased
d.	Decreased	No effect

6. Zenk Co. wrote off obsolete inventory of $100,000 during 20X1. What was the effect of this write-off on Zenks ratio analysis?

a. Decrease in the current ratio but not the quick ratio.

b. Decrease in the quick ratio but not in the current ratio.

c. Increase in the current ratio but not in the quick ratio.

d. Increase in the quick ratio but not in the current ratio.