Part 1

1. Depreciation expense in the declining-balance method is calculated by the depreciation rate A. times book value at beginning of year. B. times accumulated depreciation at year end. C. plus book value at end of year. D. divided by book value at beginning of year. 2. John Sullivan bought a new Brunswick boat for $17,000. He made a $2,500 down payment on it. The bank's loan was for 60 months, and the finance charges totaled $4,900. What is his monthly payment? A. $313.33 B. $332.33 C. $323.33 D. $232.33 3. Dick Hercher bought a home in Homewood, Illinois, for $230,000. He put down 20% and obtained a mortgage for 25 years at 8%. What is the total interest cost of the loan? A. $184,000.00 B. $327,372.80 C. $242,144.00 D. $242,411.00 4. Dan Miller bought a new Toyota truck for $28,000. Dan made a down payment of $6,000 and paid $390 monthly for 70 months. What is the total finance charge? A. $13,300 B. $27,300 C. $11,300 D. $5,300 5. When are annuity due payments made? A. Monthly B. Yearly C. At the end of the period D. At the beginning of the period 6. Connie made deposits of $2000 at the beginning of each year for four years. The rate she earned is 5% annually. What is the value of Connie's account in four years? A. $8,260.00 B. $11,051.00 C. $9,051.20 D. $8,260.20 7. At the beginning of each year for 14 years, Sherry Kardell invested $400 that earns 10% annually. What is the future value of Sherry's account in 14 years? A. $13,100 B. $12,309 C. $12,709 D. $14,000 8. With a mortgage of $48,000 for 15 years with a rate of 11%, what are the total finance charges? A. $50,236.80 B. 545.76 C. $5,023.68 D. $54,576 9. In calculating the daily balance, cash advances are A. sometimes subtracted out. B. sometimes added in. C. always added in. D. always subtracted out. 10. A truck costs $35,000 with a residual value of $2,000. Its service life is five years. Using the decliningbalance method at twice the straight-line rate, the book value at the end of year 2 is A. $22,000. B. $12,600. C. $33,000. D. $35,000. 11. At the beginning of each year, Bill Ross invests $1,400 semiannually at 8% for nine years. Using the tables in the Business Math Handbook that accompanies the course textbook, determine the cash value of the annuity due at the end of the ninth year. A. $37,939.86 B. $37,399.68 C. $37,339.68 D. $38,739.68 12. Cost of merchandise sold equals beginning inventory A. plus net purchases plus ending inventory. B. minus net purchases plus ending inventory. C. plus net purchases minus ending inventory. D. minus net purchases minus ending inventory. 13. What does an amortization schedule show? A. The portion of payment broken down to interest and principal B. The balance of interest outstanding C. The increase in loan outstanding D. The increase to principal 14. Using the tables in the Business Math Handbook that accompanies the course textbook, determine the difference between the monthly payments on a $120,000 home at 612% and at 8% for 25 years. A. $81.12 B. $91.12 C. $115.20 D. $151.02 15. Abe Aster bought a new split level for $200,000. Abe put down 30%. Assuming a rate of 1112% on a 30-year mortgage, use the tables in the Business Math Handbook that accompanies the course textbook to determine Abe's monthly payment. A. $1,982.00 B. $1,387.40 C. $1,423.80 D. $1,367.80 16. Joe Sullivan invests $9,000 at the end of each year for 20 years. The rate of interest Joe gets is 8% annually. Using the tables in the Business Math Handbook that accompanies the course textbook, determine the final value of Joe's investment at the end of the 20th year on this ordinary annuity. A. $411,588.00 B. $88,632.90 C. $411,858.00 D. $88,362.90 17. In using horizontal analysis, comparative reports are A. often used. B. always used. C. infrequently used. D. never used. 18. Depreciation expense is located on the A. balance sheet. B. income statement. C. the accounts payable documentation. D. the accounts receivable documention. 19. Lee Company has a current ratio of 2.65. The acid test ratio is 2.01. The current liabilities of Lee are $45,000. Assuming there are no prepaid expenses, the dollar amount of merchandise inventory is A. $90,540. B. $90,450. C. $28,800. D. $28,008. 20. In an ordinary annuity, when does the interest on a yearly investment start building interest? A. At the beginning of the first period B. At the end of the first period C. During the first period D. After the second period ends 21. Which one of the following methods is not based on the passage of time? A. Units-of-production method B. None of these C. Declining-balance method D. Straight-line method 22. An annuity due can use the ordinary annuity table if one extra period is added and A. one payment is subtracted from total value. B. two payments are added to total value. C. one payment is added to total value. D. three payments are subtracted from total value. End of exam 23. Jen purchased a condo in Naples, Florida, for $699,000. She put 20% down and financed the rest at 5% for 35 years. What are Jen's total finance charges? A. $626,863.20 B. $606,823.20 C. $457,425.60 D. $600,000.00 24. If a car is depreciated in four years, what is the rate of depreciation using twice the straight-line rate? A. 50% B. 25% C. 75% D. 100% 25. Use the following information to answer the question: Cost of car: $26,000 Residual value: $6,000 Life: 5 years Using the given information, determine the depreciation expense for the first year straight-line method? A. $6,000 B. $4,000 C. $4,400 D. $5,200

Part 2

1. Stocks are always quoted in A. percents. B. decimals. C. quarters of a dollar. D. quarter lots. 2. Personal property items do not include A. furniture. B. land. C. autos. D. jewelry. 3. The tax rate of $.0984 in decimal can be expressed as how many mills? A. 98.4 B. 9.84 C. 9,840 D. 90.84 4. The weighted-average method is best used A. for homogeneous products. B. only for fuels. C. for heterogeneous products. D. only for grains. 5. Mike's condo has a market value of $310,000. The property in Mike's area is assessed at 40% of the market value. The tax rate is $145.10 per $1,000 of assessed valuation. The tax for Mike is A. $17,992.40. B. $7,999.40. C. $16,992.40. D. $7,999.30. 6. Crestwood Paint Supply had a beginning inventory of 10 cans of paint at $25.00 per can. They purchased 20 cans during the month at $30.00 per can. They had an ending inventory valued at $500. How much paint in dollars was used for the month? A. $350 B. $250 C. $1,350 D. $850 7. Calculate the optional bodily injury cost for the following: Class: 10 Optional Bodily Injury: 100/300/50 A. $144 B. $187 C. $94 D. $108 8. Total sales of $400,000 that included a 6% sales tax yields actual sales of A. $377,358.49. B. $37,537.58. C. $42,800. D. $48,200. 9. During inflation, the best method to use in inventory valuation that produces the smallest amount of profit is A. weighted average. B. specific invoice. C. LIFO. D. FIFO. 10. Which one of the following items is subject to sales tax in the District of Columbia? A. Shampoo B. Tomatoes C. Roast beef D. Milk 11. What are overhead expenses? A. They contribute directly to the running of a business. B. They're directly related to a specific product. C. They're directly related to a specific department. D. They contribute indirectly to the running of a business. 12. The municipality of Waterloo needs $915,000 from property tax to meet its budget. The total value of assessed property in Waterloo is $14,000,000. What is the tax rate per dollar? (Round your answer to the nearest thousandth.) A. $.065 B. $.071 C. $.0655 D. $.07 13. To avoid distortion of extreme values, a good indicator would be the A. median. B. weighted-mean. C. mean. D. mode. 14. Which one of the following statements is true of specific identification? A. Ending inventory isn't associated with specific purchase prices. B. Low-cost items aren't used in this method. C. Flow of goods and flow of cost are the same. D. The specific purchase invoice prices aren't used. 15. What is the retail method? A. It's not an estimate. B. It aids a company in not having to calculate an inventory cost for each individual item. C. It doesn't require a cost ratio. D. It eliminates the need to take a physical inventory. 16. The range of 35, 22, 43, 18, 22, 27, 48, 39, 31, and 16 is A. 32. B. 29. C. 30. D. 22. 17. The cost ratio in the retail method is found by the cost of goods available for sale at cost divided by the A. cost of goods available for sale at retail. B. ending inventory at retail. C. net sales. D. net purchases at cost. 18. Calculate the median from the following numbers: 16 + 9 + 10 + 5 + 4. A. 9 B. 4 C. 5 D. 10 19. Determine the mode from the following numbers: 71, 3, 13, 33, 3, 71, 14, 33, 13, and 33. A. 33 B. 71 C. 3 D. 13 20. Assume the mean useful life of a particular light bulb is 2,000 hours, which is normally distributed with a standard deviation of 300 hours. What is the range of the useful life of light bulbs within two standard deviations of the mean. A. Longer than 1,700 hours B. Longer than 2,300 hours C. Between 1,400 and 2,600 hours D. Between 1,700 and 2,300 hours 21. The building of Jim's Hardware is assessed at $109,000. The tax rate is $86.95 per $1,000 of assessed valuation. The tax due is A. $8,695.45. B. 94,698.23. C. $947.75. D. $8,659.54. E. $9,477.55. 22. Jangles Co. earned $1.80 per share. Assuming a closing price of $40, what is the PE ratio? (Round your answer to the nearest whole number.) A. 22 B. 20 End of exam C. 72 D. 7 23. Clay's Fishing Shop's beginning inventory is $70,000 and ending inventory is $36,500. What was Clay's average inventory? A. $48,000 B. $18,250 C. $35,000 D. $53,250 24. An auto insurance premium may be partially based on the A. expected life of the car. B. number of years one expects to drive a car. C. attitude of the driver. D. make of the car. 25. Commissions charged on the trading of stock are A. charged on buying and selling of stock. B. charged only on sale of stock. C. fixed.