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A corporation has which of the following set of characteristics?




1. A corporation has which of the following set of characteristics?;a. Shared control, tax advantages, increased skills and resources;b. Simple to set up and maintains control with founder;c. Easier to transfer ownership and raise funds, no personal liability for stockholders;d. Harder to raise funds and gives owner control;2. Which activities involve acquiring the resources to run the business?;Delivering;Financing;Investing;Operating;3. For 2007 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 2007 earnings per share?;$4.67;$0.25;$66.67;$14.86;4. Free cash flow represents;cash provided by operations less adjustments for capital expenditures and dividends;a measurement of a company?s cash generating ability;a measure of solvency;all of the above;5. The Dividends account appears;a. on the income statement along with the expenses of the business.;b. must show transactions every accounting period.;c. is increased with debits and decreased with credits.;d. is considered a long term asset of the firm.;6. Denton Company showed the following balances at the end of its first year;Cash $7,000;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 Denton Company show as total credits on its trial balance?;$30,100;$29,400;$28,700;$30,800;7. Using accrual accounting, expenses are recorded and reported only;when they are incurred whether or not cash is paid.;when they are incurred and paid at the same time.;if they are paid before they are incurred.;if they are paid after they are incurred.;8. The Village Laundry Company purchased $6,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $3,000 on hand. The adjusting entry that should be made by the company on June 30 is;Debit Laundry Supplies Expense, $3,000, Credit Laundry Supplies, $3,000.;Debit Laundry Supplies Expense, $3,500, Credit Laundry Supplies, $3,000.;Debit Laundry Supplies, $3,500, Credit Laundry Supplies Expense, $3,500.;Debit Laundry Supplies Expense, $3,500, Credit Laundry Supplies, $3,500.;9. A credit purchase of $1,600 is made on April 25, terms 2/10, net/30, on which a return of $100 is made on April 28. What amount is paid as payment in full on May 2?;$1,568;$1,470;$1,500;$1,600;10. At the beginning of the year, Midtown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,600,000. If Midtown Athletic reported ending inventory of $600,000 and sales of $2,000,000, their cost of goods sold and gross profit rate must be;$1,000,000 and 50%;$1,400,000 and 30%;$1,000,000 and 30%;$1,400,000 and 70%;11. In a period of increasing prices, which inventory flow assumption will result in the lowest amount of income tax expense?;FIFO;LIFO;Average Cost Method;Income tax expense for the period will be the same under all assumptions.;12. An aircraft company would most likely have a;high inventory turnover.;low profit margin.;high volume.;low inventory turnover.;13. A very small company would have the most difficulty in implementing which of the following internal control activities?;Separation of duties;Limited access to assets;Periodic independent verification by and external auditor.;Sound personnel procedures;14. Which of the following is not a suggested procedure to establish internal control over cash disbursements?;Anyone can sign the checks.;Different individuals approve and make the payments.;Blank checks are stored with limited access.;The bank statement is reconciled monthly.;15. An aging of a company's accounts receivable indicates that $4,000 is estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 debit balance, the adjustment to record bad debts for the period will require a;debit to Bad Debts Expense for $4,000.;debit to Allowance for Doubtful Accounts for $5,200.;debit to Bad Debts Expense for $5,200.;credit to Allowance for Doubtful Accounts for $4,000.;1. Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $10,000 at the end of the year. If the balance of the Allowance for Doubtful Accounts is $2,000 credit before adjustment, what is the amount of bad debt expense for that period?;$10,000;$8,000;$12,000;$2,000;2. Brown Clinic purchases land for $120,000 cash. The clinic assumes $1,500 in property taxes due on the land. The title and attorney fees totaled $1,000. The clinic has the land graded for $2,200. What amount does Brown Clinic record as the cost for the land?;$122,200;$120,000;$124,700;$122,500;3. Equipment was purchased for $60,000. Freight charges amounted to $2,800 and there was a cost of $8,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $12,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be;$14,160.;$11,760.;$9,840.;$9,600.;4. Ron's Pharmacy has collected $600 in sales taxes during March. If sales taxes must be remitted to the state government monthly, what entry will Ron's Pharmacy make to show the March remittance?;Dr Sales Tax Expense 600;Cr Cash 600;Dr Sales Taxes Payable 600;Cr Cash 600;Dr Sales Tax Expense 600;Cr Sales Taxes Payable 600;No entry required.;5. Mendez Corporation issues 2,000, 10-year, 8%, $1,000 bonds dated January 1, 2007, at 103. The journal entry to record the issuance will show a;debit to Cash of $2,000,000.;debit to Premium on Bonds Payable for $60,000.;credit to Bonds Payable for $2,000,000.;credit to Cash for $2,060,000.;6. If Kiner Company issues 1,000 shares of $5 par value common stock for $70,000, the account;Common Stock will be credited for $5,000.;Paid-in Capital in Excess of Par Value will be credited for $5,000.;Paid-in Capital in Excess of Par Value will be credited for $70,000.;Cash will be debited for $65,000.;7. Outstanding stock of the Apex Corporation included 20,000 shares of $5 par common stock and 5,000 shares of 6%, $10 par non-cumulative preferred stock. In 2006, Apex declared and paid dividends of $2,000. In 2007, Apex declared and paid dividends of $6,000. How much of the 2007 dividend was distributed to preferred shareholders?;$4,000;$7,000;$3,000;None of the above;8. Accounts receivable arising from sales to customers amounted to $40,000 and $35,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $110,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is;$110,000.;$105,000.;$115,000.;$150,000.;9. Loster Company reported a net loss of $10,000 for the year ended December 31, 2007. During the year, accounts receivable decreased $5,000, merchandise inventory increased $8,000, accounts payable increased by $10,000, and depreciation expense of $5,000 was recorded. During 2007, operating activities;used net cash of $2,000.;used net cash of $8,000.;provided net cash of $2,000.;provided net cash of $8,000;10. If you are comparing the 2008 income statement numbers with the income statement numbers from 2007 and 2006, you are conducting a;common-size analysis;horizontal analysis;vertical analysis;ratio analysis;11. Comparisons of data within a company are an example of the following comparative basis;Industry averages;Inter-company;Intra-company;Inter-regional;12. In vertical analysis;a base amount is required.;a base amount is optional.;the same base is used across all financial statements analyzed.;the results of the horizontal analysis are necessary inputs for performing the analysis.;13. Which one of the following is not a characteristic generally evaluated in ratio analysis?;Liquidity;Profitability;Marketability of the product;Solvency;14. Short-term creditors are usually most interested in assessing;solvency.;liquidity.;marketability.;profitability.;15. Return on common stockholders? equity ratio is affected by;net income;dividend paid to preferred stock, if any;leverage (debt to assets ratio);all of the above


Paper#32985 | Written in 18-Jul-2015

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