QUESTION 1

1. A series of equal periodic payments in which the first payment is made one compounding period after the date of the contract is:

   	a.	A deferred annuity.
   	b.	An ordinary annuity
   	c.	An annuity due.
   	d.	A delayed annuity.

2.5 points

QUESTION 2

1. Which of the following profit amounts usually will be listed in both the single-step and multiple-step formats of the income statement?

   	a.	Gross profit.
   	b.	Operating income.
   	c.	Income before taxes.
   	d.	Net nonoperating income.

2.5 points

QUESTION 3

1. Present and future value tables of $1 at 9% are presented below.

   	PV of $1	FV of $1	PVA of $1	FVAD of $1	FVA of $1
   1	0.91743	1.09000	0.91743	1.0900	1.0000
   2	0.84168	1.18810	1.75911	2.2781	2.0900
   3	0.77218	1.29503	2.53129	3.5731	3.2781
   4	0.70843	1.41158	3.23972	4.9847	4.5731
   5	0.64993	1.53862	3.88965	6.5233	5.9847
   6	0.59627	1.67710	4.48592	8.2004	7.5233

   Ajax Company purchased a five-year certificate of deposit for its building fund in the amount of $220,000. How much should the certificate of deposit be worth at the end of five years if interest is compounded at an annual rate of 9%?

   	a.	$855,723.
   	b.	$142,985.
   	c.	$319,000.
   	d.	$338,496.

2.5 points

QUESTION 4

1. For a typical manufacturing company, the most common critical point for recognizing revenue is the date:

   	a.	An order is received.
   	b.	Production is completed.
   	c.	The product is delivered.
   	d.	Payment is received.

2.5 points

QUESTION 5

1. The Baltimore Performing Arts Center sold all $25,000 worth of its tickets to a popular concert a month in advance. The journal entry the Performing Arts Center would record immediately after the concert ended is:

   	a.	Db. Deferred Revenue $25,000 Cr. Sales Revenue $25,000
   	b.	Db. Deferred Revenue $25,000 Cr. Cash $25,000
   	c.	Db. Cash $25,000 Cr. Sales Revenue $25,000
   	d.	Db. Sales Revenue $25,000 Cr. Deferred Revenue $25,000