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1.

Question 1

2.5 Points

A Balance Sheet is also known as:

A Profit and Loss Statements.

A Statement of Financial Position.

A Cash Flow Statement.

None of the above.

2.

Question 2

Question 2

2.5 Points

Use this information for the next two questions:

Equipment was purchased for Company A for $170,000.

Additional costs included: shipping charges of $10,000 and a cost of $20,000 for building a foundation and installing the equipment. These costs were added to the total depreciable value of the equipment. It is estimated that the equipment will have a $30,000 salvage value at the end of its 5-year useful life.

Depreciation expense each year using the straight-line method will be:

$29,000

$68,000

$40,000

$34,000.

3.

Question 3

Question 3

2.5 Points

Depreciation expense for Company A the first year using the Double Declining Balance method will be:

$60,000

$34,000

$68,000

$80,000

4.

Question 4

Question 4

2.5 Points

The standard form of a journal entry has the...

debit account entered in the left column. This decreases the balance

credit account entered in the left column.  This increases the balance

credit account entered in the right column. This decreases the balance

debit account entered in the left column. This increases the balance

5.

Question 5

Question 5

2.5 Points

Which of the following is an external user of accounting information:

The Board of Directors

Creditors

Corporate management

Human resources

6.

Question 6

Question 6

2.5 Points

The basic accounting equation can be restated as..

Assets – Liabilities = Owner's Equity.

Assets + Owner's Equity = Liabilities.

Owner's Equity - Liabilities = Assets.

Assets + Liabilities = Owner's Equity.

7.

Question 7

Question 7

2.5 Points

Generally accepted accounting principles are:

Income tax regulations of the Internal Revenue Service

Standards the accounting profession has developed to report and record financial events

Theories that are based on physical laws of the universe

Principles that have been proven correct by academic researchers

8.

Question 8

Question 8

2.5 Points

A net profit will result during a time period when:

liabilities exceed assets.

drawings exceed investments.

expenses exceed revenues.

revenues exceed expenses.

9.

Question 9

Question 9

2.5 Points

If a company makes a sale and collects cash, which of the following is the correct way to record the corresponding debit and credit:

Debit the accounts receivable account | Credit the revenue account

Credit the cash account | Debit the revenue account

Debit the cash account | Credit the revenue account

Credit the accounts receivable account | Credit the revenue account

10.

Question 10

Question 10

2.5 Points

If a company takes out a loan, which of the following is the correct way to record the corresponding debit and credit:

Debit the cash account | Credit the loans payable account

Credit the cash account | Debit the loans payable account

Debit the loans payable account | Credit the cash account

Credit the accounts receivable account | Debit the cash account

11.

Question 11

Question 11

2.5 Points

ABC Corporation also buys a machine for $20,000 on credit. This results in an addition to the Machinery fixed assets account, and an increase in the accounts payable (liability) account. The entry is:

......................................................................Debit...............................Credit

Machinery - Fixed Asset ....................................................................$20,000

Accounts Payable ...............................................................................$20,000

.......................................................................Debit................................Credit

Accounts Payable .......................................$20,000

Machinery - Fixed Assets ...................................................................$20,000

......................................................................Debit................................Credit

Accounts Payable ......................................$20,000

Machinery - Fixed Assets ..........................$20,000

.......................................................................Debit................................Credit

Machinery - Fixed Asset ............................$20,000

Accounts Payable ................................................................................$20,000

12.

Question 12

Question 12

2.5 Points

Use the following information two (2) questions;

Company A with no inventory on June 1st  made the following four inventory purchases

..............................................Dollar ($) Value

June 2 ..........300 units ..........$ 800

June 10 ........200 units .............590

June 15 ........200 units .............630

June 28 ........150 units ......... 525

...............................................$2,545

A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand.

The inventory method which results in the highest gross profit for June is...

the FIFO method.

the LIFO method.

the weighted average unit cost method.

None of the above

13.

Question 13

Question 13

2.5 Points

The LIFO Ending Inventory value for Company A on June 30th is:

$1,452.50

$1,092.50

$533.33

$2,011.67

14.

Question 14

Question 14

2.5 Points

Which of the following would not be considered an external user of accounting data for

the GHI Company?

Internal Revenue Service Agent.

The Chief Financial Officer

Creditors.

Customers.

15.

Question 15

Question 15

2.5 Points

Use the following information for the next three questions:

Company A starts Year 1 with no Property Plant or Equipment. It purchases a machine worth $20,000 which it can depreciate over ten (10) years.

At the end of the ten year period, the machine will have no salvage value.

Assume there are no other additions to Property Plant and Equipment during the ten year period.

Using the Straight Line Depreciation method, the amount charged for depreciation in Year 1 will be:

$2,000

$4,000

$14,000

$20,000

16.

Question 16

Question 16

2.5 Points

Using the Double Declining Balance method, the amount charged for depreciation for Company A in Year 1 will be:

$2,000

$4,000

$8,000

$20,000

17.

Question 17

Question 17

2.5 Points

Using the Straight Line Depreciation method, the accumulated depreciation for Company A in Year 4 will be:

$2,000

$4,000

$8,000

$10,000

18.

Question 18

Question 18

2.5 Points

A net loss will result during a time period when...

liabilities exceed assets.

drawings exceed investments.

revenues exceed expenses.

expenses exceed revenues.

19.

Question 19

Question 19

2.5 Points

Use the following items taken from the financial statements of the Postal Service for the year ending December 31, 2012 to answer the following two questions :

Accounts payable ...........................................................$ 9,000

Accounts receivable ........................................................11,000

Accumulated depreciation – equipment ......................28,000

Advertising expense ........................................................21,000

Cash ...................................................................................11,000

Owner’s capital (12/31/12) ............................................105,000

Owner’s drawings .............................................................14,000

Depreciation expense ......................................................12,000

Insurance expense .............................................................3,000

Note payable, due 6/30/13 ...............................................5,000

Prepaid insurance (6 - month policy) ..............................6,000

Rent expense ....................................................................17,000

Salaries and wages expense ..........................................32,000

Service revenue .............................................................125,000

Supplies/Inventory ............................................................4,000

Supplies expense ...............................................................6,000

Equipment (Long-term) ................................................210,000

What are total current liabilities of the Postal Service at December 31, 2012?

$14,000

$15,000

$18,000

$105,000

20.

Question 20

Question 20

2.5 Points

What are the total current assets of the Postal Service at December 31, 2012?

242,000

22,000

32,000

28,000

21.

Question 21

Question 21

2.5 Points

Which of the following is true about Property, Plant and Equipment

It is essentially the company’s Fixed Assets

It includes all unimpaired Goodwill

It is also the company’s Intangible Assets

The land portion of PP&E is depreciated over the period of time it benefits the firm.

22.

Question 22

Question 22

2.5 Points

Sources of increases to owner's equity are:

purchases of merchandise.

withdrawals by the owner.

additional investments by owners.

expenses.

23.

Question 23

Question 23

2.5 Points

ABC Corporation - Partial Income Statement - FY 2016

Revenue ............................................. $ 12,000,000

Cost of Goods Sold ..................................... 4,000,000

Selling General and Admin. ....................... 1,500,000

Research and Development .......................1,200,000

Depreciation ................................................ 1,500,000

Operating Expenses ............................... ????

Operating Income .................................. ????

Interest Income ................................................200,000

Interest Expense ..............................................300,000

Pre-Tax Income .........................................3,700,000

Tax (35% rate)

EPS Basic .................................................. $   ??

Weighted avg. Shares ...........1,300,000

Use the above information to answer the following four questions:

What is ABC's Gross Profit for 2016?

$12,000,000

$8,000,000

$4,200,000

$2,405,000

24.

Question 24

Question 24

2.5 Points

What is ABC's Operating Income?

$8,000,000

$3,800,000

$3,700,000

$2,405,000

25.

Question 25

Question 25

2.5 Points

What is ABC's Earnings Per Share for 2016?

$2.00

$1.95

$1.85

$1.15

26.

Question 26

Question 26

2.5 Points

Owner's equity can be described as...

creditorship claim on total assets.

ownership claim on total assets.

benefactor's claim on total assets.

debtor claim on total assets.

27.

Question 27

Question 27

2.5 Points

Credits...

decrease both assets and liabilities.

increase both assets and liabilities.

increase assets and decrease liabilities.

decrease assets and increase liabilities.

28.

Question 28

Question 28

2.5 Points

The normal balance of any account is the

left side.

right side.

side which increases that account.

side which decreases that account.

29.

Question 29

Question 29

2.5 Points

Owner's equity is decreased by all of the following except...

owner's investments.

owner's withdrawals.

expenses.

dividends

30.

Question 30

Question 30

2.5 Points

At January 1, 2012, Alligator Industries reported owner’s equity of $130,000. During 2012, Alligator had a net loss of $30,000 and owner drawings of $15,000. At December 31, 2012, the amount of owner’s equity is

$85,000.

$100,000.

$115,000.

$145,000.

31.

Question 31

Question 31

2.5 Points

Assuming there is no increase in the accounts payable account, an increase in a current asset other than cash indicates a decrease in cash.

True

False

Clear selection

32.

Question 32

Question 32

2.5 Points

The Last In First Out inventory method means the latest goods purchased are first to be sold.

True

False

Clear selection

33.

Question 33

Question 33

2.5 Points

The Last In First Out inventory method will result in a higher ending inventory balance than

the First In First Out inventory method (assuming there is price inflation during the period).

True

False

Clear selection

34.

Question 34

Question 34

2.5 Points

A decrease in a current asset indicates an increase in cash.

True

False

Clear selection

35.

Question 35

Question 35

2.5 Points

Manufacturing companies have only one Inventory classification.

True

False

Clear selection

36.

Question 36

Question 36

2.5 Points

Financing activities increase or decrease long term assets.

True

False

Clear selection

37.

Question 37

Question 37

2.5 Points

The payment of an electrical bill is classified as a Financing Activity on a Cash Flow Statement.

True

False

Clear selection

38.

Question 38

Question 38

2.5 Points

A decrease in Inventory is classified as a Financing Activity on a Cash Flow Statement.

True

False

Clear selection

39.

Question 39

Question 39

2.5 Points

Operating Margins cannot be greater than 95%.

True

False

Clear selection

40.

Question 40

Question 40

2.5 Points

If a company had retained earnings of $60,000 at the beginning of the year, net earnings of $50,000, and a year ending retained earnings of $90,000, it paid its owners a dividend at some point during the year.

True

False

Clear selection