(TCO A) Which of the following is an advantage of the sole proprietorship relative to the corporate form of business organization? (Points : 5) Limited liability of investor Transferability of ownership Simple to establish Unlimited life 2. (TCO A) The payment of cash dividends is recorded in the _____. (Points : 5) operating section of the statement of cash flows investing section of the statement of cash flows financing section of the statement of cash flows noncash investing and financing section of the statement of cash flows 3. (TCOs A, B) Below is a partial list of account balances for Landon Company:: Cash $10,000 Prepaid insurance 700 Accounts receivable 3,500 Accounts payable 2,800 Notes payable 4,200 Common stock 1,400 Dividends 700 Revenues 21,000 Expenses 17,500 What did Landon Company show as total debits? (Points : 5) $32,400 $29,400 $34,500 $35,200 4. (TCOs B, E) Under the accrual basis of accounting, revenues are recorded and reported _____. (Points : 5) when companies receive payments for jobs performed or products provided when companies have provided products or performed services when companies receive payments prior to providing products or performing services when companies receive payments after providing products or performing services 5. (TCO D) In a period of increasing prices, which inventory cost flow assumption will result in the highest amount of net income? (Points : 5) LIFO The average cost method FIFO Income tax expense for the period will be the same under all assumptions. 6. (TCOs A, E) Equipment was purchased for $55,000 on January 1, 2011. Freight charges of $2,200 were incurred and there was a cost of $1,800 for installation. It is estimated the equipment will have a $5,500 salvage value at the end of its 5-year useful life. Depreciation expense for 2011 using the straight-line method will be _____. (Points : 5) $10,340 $10,700 $10,260 $9,900 7. (TCOs D, G) Payne Corporation issues 100 twenty-year, 6%, $1,000 bonds dated July 1, 2010, at 94. The journal entry to record the amount of cash will show a _____. (Points : 5) debit to Cash of $194,000 debit to Cash of $100,000 debit to Cash of $94,000 debit to Cash of $60,000 8. (TCO C) Accounts receivable arising from sales to customers amounted to $80,000 and $100,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $1,000,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is _____. (Points : 5) $20,000 $1,020,000 $1,000,000 $980,000 9. (TCO F) If you are making comparisons with other companies to provide insight into a company's competitive position, you are performing what type of analysis? (Points : 5) Common-size analysis Intercompany analysis Intracompany analysis Industry average analysis 10. (TCO F) The formula for performing horizontal analysis is _____. (Points : 5) (Current Year Amount minus Base Year Amount) divided by Current Year Amount Base Year Amount divided by Current Year Amount Current Year Amount minus Base Year Amount (Current Year Amount minus Base Year Amount) divided by Base Year Amount 11. (TCO F) Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time _____. (Points : 5) that has been arranged from the highest number to the lowest number that has been arranged from the lowest number to the highest number to determine which numbers are in error to determine the amount and/or percentage increase or decrease that has taken place 12. (TCO F) Ratio analysis is helpful for _____. (Points : 5) identifying differences between numbers identifying causes of variances between numbers performing a horizontal analysis comparing companies of different sizes 13. (TCO F) Stockholders would be most interested in which of the following ratios? (Points : 5) Days in inventory Free cash flow Current ratio Average collection period 14. (TCO G) To calculate the market value of a bond, we need to _____. (Points : 5) multiply the bond price times the interest rate calculate the present value of the principal only calculate the present value of the interest only calculate the present value of both the principal and interest payments