QUESTION 1

1. A 5 year fixed asset was purchased on Jan 1 of Year 1 and immediately placed into service. The cost was $5,000 and had no salvage value. What is the Net Book Value at the end of year 1 using straight line depreciation?

8 points

QUESTION 2

1. Select the asset accounts from the list.

   		Property
   		Inventory
   		Bank Notes
   		Tax expense
   		Prepaid expenses

8 points

QUESTION 3

1. The asset section of the balance sheet is arranged in order of:

   		liquidity
   		profitability
   		highest balance first
   		lowest balance

5 points

QUESTION 4

1. A company needs to have $100,000 in the bank for an expected capital expenditure in 5 years. How much money should the company invest today with an expected rate of return of 10% compounded semi-annually?

8 points

QUESTION 5

1. A receipt of cash from a customer that has already been equally accrued on accounts receivable will:

   		Decrease the current ratio
   		Increase the current ratio
   		Current Ratio remains the same
   		What is the current ratio

5 points

QUESTION 6

1. Turnover ratios are generally calculated for each of the following assets except:

   		Accounts Recievable
   		Inventory
   		Cash
   		Plant and Equipment

5 points

QUESTION 7

1. A financial tool used to help determine profitability of individual products and help to improve decisions regarding those products is the breakeven analysis.

   True

   False

10 points

QUESTION 8

1. Corporation A had NET sales of $2,400 for the year, cost of goods sold of $800, and interest expense of $500 for last year.

   What is the Gross Profit if sales were $3,000 for the current year if the relationships remain the same?

8 points

QUESTION 9

1. What are the different methods for calculating depreciation

   		exponential
   		Double-Declining Balance
   		Sum of the years' digits
   		Ignor Depreciation if you want
   		straight-line

8 points

QUESTION 10

1. What causes a decrease in Accounts Receivable?

   		Customer purchase items on Credit
   		Payments from customers on prior purchase
   		Customers purchase items with Cash
   		Company spending cash on Inventory

5 points

QUESTION 11

1. There is a Decrease in Long Term Debt if a company pays extra on a Long term note due to a very high interest rate.

   True

   False

5 points

QUESTION 12

1. Calculate the Beginning Cash Balance given the following information:

   Beginning Cash Balance (1/1/XX): ?

   Sources of Funds: $35,000

   Uses of Funds: $10,000

   Ending Cash Balance: $100,000

8 points

QUESTION 13

1. If a product sales price decrease while COGS remains constant, what happens the breakeven point and the revenue generated from the same amount of sales.

   		Sales Revenue will increase, Breakeven will decrease
   		Sales Revenue will decrease, Breakeven will decrease
   		Sales Revenue will Increase, Breakeven will increase
   		Sales Revenue will decrease, Breakeven will increase

5 points

QUESTION 14

1. If the company has a breakeven goal of 2000 units, what price per unit should the product be priced at for a fixed cost of $30000 and a per unit cost of $20?

   Fixed Cost: $30,000

   Variable Cost $20 / unit

   Unit Sales Price $ FIND

8 points

QUESTION 15

1. The Return on Assets ratio will increase if the net income of Company B increases $100,000 while the Assets Decrease $100,000.

   True

   False

5 points

QUESTION 16

1. There is a Decrease in Long Term Debt if a company pays extra on a Long term note due to a very high interest rate.

   True

   False

5 points

QUESTION 17

1. Short term debt is debt a company owes that is due within 1 year.

   True

   False

5 points

QUESTION 18

1. Cash flow can be impaired by slowing down payments to suppliers.

   True

   False

5 points

QUESTION 19

1. Units Cost

   Inventory, Jan 1 8000 $11

   Purchase June 21 13000 $12

   Purchase Dec 21 5000 $13

   If 11000 units are on hand at the end of the year, what is the cost of ending inventory using FIFO inventory system.

8 points

QUESTION 20

1. Units Cost

   Inventory, Jan 1 8000 $11

   Purchase June 21 13000 $12

   Purchase Dec 21 5000 $13

   If 11000 units are on hand at the end of the year, what is the cost of ending inventory using LIFO inventory system?

8 points

QUESTION 21

1. Calculate the Net Income given the following Information

   Revenue: $6000

   Gross Margin Percentage: 20%

   G&E expenses: $850

   Depreciation Expense: $195

8 points

QUESTION 22

1. Differentiate between the Governmental and for-profit Financial statements. Identify the primary statements for each and briefly describe what they convey to the reader.