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| 1. (TCOs A, B, and C) Which type of corporate information is not available to investors? (Points : 3)
Dividend history Forecast of cash needs for the upcoming year Cash provided by investing activities Beginning cash balance
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| 2. (TCO C) Debt securities sold to investors that must be repaid at a particular date some years in the future are called(Points : 3)
accounts payable. notes receivable. taxes payable. bonds payable. |
| 3. (TCO C) Which activities involve putting the resources of the business into action to generate a profit? (Points : 3)
Delivering Financing Investing Operating |
| 4. (TCO A) The cost of assets consumed or services used is also known as (Points : 3)
a revenue. an expense. a liability. an asset. |
| 5. (TCO C) Edwards Company recorded the following cash transactions for the year. Paid $45,000 for salaries Paid $20,000 to purchase office equipment Paid $5,000 for utilities Paid $2,000 in dividends Collected $75,000 from customers What was Edwards’ net cash provided by operating activities? (Points : 3)
$25,000 $5,000 $30,000 $23,000 |
| 6. (TCO A) A current asset is (Points : 3)
the last asset purchased by a business. an asset which is currently being used to produce a product or service. usually found as a separate classification in the income statement. expected to be converted to cash or used in the business within a relatively short period of time. |
| 7. (TCO A) An intangible asset (Points : 3)
may have the capacity to earn revenue for its owner. is worthless because it has no physical substance. is converted into a tangible asset during the operating cycle. cannot be reported on the balance sheet because it lacks physical substance. |
| 8. (TCO A) The following are selected account balances on December 31, 2010. -Land (location of the corporation’s office building): $50,000 -Land (held for future use): 75,000 -Corporate Office Building: 300,000 -Inventory: 100,000 -Equipment: 225,000 -Office Furniture: 50,000 -Accumulated Depreciation: 150,000 What is the total NET amount of property, plant, and equipment that will appear on the balance sheet? (Points : 3)
$650,000 $550,000 $475,000 $800,000 |
| 9. (TCO B) For 2010, Mossland Corporation reported net income of $28,000; net sales $400,000; and average share outstanding 6,000. There were no preferred stock dividends. What was the 2010 earnings per share? (Points : 3)
$4.67 $0.25 $66.67 $14.86 |
| 10. (TCO B) Morten Corporation had beginning retained earnings of $764,000 and ending retained earnings of $833,000. During the year they issued common stock totaling $47,000. There were no dividends issued. What was their net income for the year? (Points : 3)
$69,000 $22,000 $116,000 $91,000 |
| 11. (TCO D) On March 1, 2010, Dillon Company hires a new employee who will start the work on March 6. The employee will be paid on the last day of each month. Should a journal entry be made on March 6? Why, or why not?(Points : 3)
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| 12. (TCO D) The left side of an account is (Points : 3)
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| 13. (TCO D) The classification and normal balance of the dividend account is (Points : 3)
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| 14. (TCO D) A debit is not the normal balance for which account listed below? (Points : 3) |
| 15. (TCO D) Which pair of accounts follows the rules of debit and credit in relation to increases and decreases in the same manner? (Points : 3) |
| 16. (TCO E) An accounting time period that is 1 year in length is called (Points : 3) |
| 17. (TCO E) In a service-type business, revenue is considered earned (Points : 3) |
| 18. (TCO E) Expenses sometimes make their contribution to revenue in a different period than when the expense is paid. When wages are incurred in one period and paid in the next period, this often leads to which account appearing on the balance sheet at the end of the first period? (Points : 3)
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| 19. (TCO E) The following is selected information from J Corporation for the fiscal year ending October 31, 2010. -Cash received from customers: $75,000 -Revenue earned: 87,500 -Cash paid for expenses: 42,500 -Expenses incurred: 50,000 Based on the accrual basis of accounting, what is J Corporation’s net income for the year ending October 31, 2007?(Points : 3)
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| 20. (TCO E) Adjusting entries are made to ensure that (Points : 3) |
| 21. (TCOs A and B) A perpetual inventory system would most likely be used by a(n) (Points : 3) |
| 22. (TCO B) Hunter Company purchased merchandise inventory with an invoice price of $3,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Hunter Company pays within the discount period? (Points : 3) |
| 23. (TCOs A and B) Jake’s Market recorded the following events involving a recent purchase of merchandise. -Received goods for $20,000, terms 2/10, n/30. -Returned $400 of the shipment for credit. -Paid $100 freight on the shipment. -Paid the invoice within the discount period. As a result of these events, the company’s merchandise inventory (Points : 3) |
| 24. (TCO A) If goods in transit are shipped FOB destination (Points : 3) |
| 25. (TCO A) When a perpetual inventory system is used, which of the following is a purpose of taking a physical inventory? (Points : 3) |
| 26. (TCO A) Of the following companies, which one would not likely employ the specific identification method for inventory costing? (Points : 3) |
| 27. (TCO A) Which of the following statements is true regarding inventory cost flow assumptions? (Points : 3)
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| 28. (TCO A) In a period of rising prices, which of the following inventory methods generally results in the lowest net income figure? (Points : 3) |
| 29. (TCO B) The figure for which of the following items is determined at a different time under the perpetual inventory method than under the periodic method? (Points : 3) |
| 30. (TCO B) The primary source of revenue for a retailer is (Points : 3) |
31. (TCO D) Describe the process of preparing a trial balance. What is the purpose of preparing a trial balance? If a trial balance does not balance, identify what might be the reasons why it does not balance. If
GERTZ COMPANY
Income Statement
For the Year Ended December 31, 2007
Sales ………………………………………………………….. $575,000
Less: Sales Returns and Allowances …………………………. $ 50,000
Sales Discounts …………………………………………….. 9,500 59,500
Net Sales ………………………………………………………….. 515,500
Cost of Goods Sold……………………………………………………. 347,000
Gross Profit …………………………………………………………. 168,500
Operating Expenses
Store Salaries Expense…………………………………………. $ 74,000
Utilities Expense ………………………………………………….. 18,000
Advertising Expense …………………………………………….. 15,000
Depreciation Expense ………………………………………….. 3,500
Freight-out ………………………………………………………….. 2,000
Total Operating Expenses………………………………… 112,500
Income from Operations ………………………………. 56,000
Other Revenues and Gains
Interest Revenue………………………………………………….. 25,000
Other Expenses and Losses
Interest Expense……………………………………….. 19,000 6,000
Net Income ……………………………………………….,,,, $ 62,000
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