Multiple choice questions. No need to explain.

Question 30

Use the following 8% interest factors.

	Present Value of	Future Value of
	Ordinary Annuity	Ordinary Annuity
7 periods	5.2064	8.92280
8 periods	5.7466	10.63663
9 periods	6.2469	12.48756

Reference: Ref 6-3

If $5,000 is deposited annually starting on January 1, 2010 and it earns 8%, what will the balance be on December 31, 2017?

$44,614

$48,183

$53,183

$57,438

Question 31

Walsh Retailers purchased merchandise with a list price of $50,000, subject to trade discounts of 20% and 10%, with no cash discounts allowable. Walsh should record the cost of this merchandise as

$35,000.

$36,000.

$39,000.

$50,000.

Question 32

What is "expectation gap"?

The difference between what the public thinks the accountant is not doing and what the accountant knows they don't do.

The difference between what the public thinks the accountant is doing and what Congress says the accountant is doing.

The difference between what the public thinks the accountant is doing and what the accountant thinks they can do.

The difference between what the accountant is doing and what the Courts say the accountant should be doing.

Question 33

What is the primary difference between an ordinary annuity and an annuity due?

The timing of the periodic payment.

The interest rate.

Annuity due only relates to present values.

Ordinary annuity only relates to present values.

Question 34

When is revenue generally recognized?

When cash is received.

When the warranty expires.

When production is completed.

When the sale occurs.

Question 35

Which of the following earnings per share figures must be disclosed on the face of the income statement?

EPS for income before taxes.

The effect on EPS from unusual items.

EPS for gross profit.

EPS for income from continuing operations.

Question 36

Which of the following errors will cause an imbalance in the trial balance?

Omission of a transaction in the journal.

Posting an entire journal entry twice to the ledger.

Posting a credit of $720 to Accounts Payable as a credit of $720 to Accounts Receivable.

Listing the balance of an account with a debit balance in the credit column of the trial balance.

Question 37

Which of the following is not an objective of financial reporting?

To provide information about economic resources, the claims to those resources, and the changes in them.

To provide information that is helpful to investors and creditors and other users in assessing the amounts, timing, and uncertainty of future cash flows.

To provide information that is useful to those making investment and credit decisions.

All of these are objectives of financial reporting.

Question 38

Which of the following is a nominal (temporary) account?

Unearned Revenue

Salary Expense

Inventory

Retained Earnings

Question 39

Which of the following is not a basic element of financial statements?

Assets.

Balance sheet.

Losses.

Revenue.

Question 40

Which of the following should not be considered as a current asset in the balance sheet?

Installment notes receivable due over 18 months in accordance with normal trade practice.

Prepaid taxes which cover assessments of the following operating cycle of the business.

Equity or debt securities purchased with cash available for current operations.

The cash surrender value of a life insurance policy carried by a corporation, the beneficiary, on its president.