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ACCT multiple choice questions-Temporary accounts would not include

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Question;1. Temporary accounts would not include;A. salaries payable.;B. cost of goods sold.;C. depreciation expense.;D. supplies expense.;2. In a recent annual report, Apple Computer reported the;following in one of its disclosure notes: "Warranty Expense: The Company;provides currently for the estimated cost for product warranties at the time;the related revenue is recognized." This note exemplifies Apple's use of;A. economic entity.;B. realization principle.;C. the matching principle.;D. conservatism.;3. Listed below are account balances (in $millions) taken;from the records of Symphony Stores. All of these are permanent accounts;except the last two that have yet to be closed. The installment receivables are;current. Symphony uses a perpetual inventory system.;What would Symphony report as total shareholders' equity?;A. $808;B. $838;C. $323;D. $928;4. Janson Corporation Co.'s trial balance included the;following account balances at December 31, 2011;Accounts receivable;$12,000;Inventories;40,000;Patent;12,000;Investments;30,000;Prepaid insurance;6,000;Note receivable, due 2014;50,000;Investments consist of treasury bills that were purchased in;November and mature in January. Prepaid insurance is for the next two years.;What amount should be included in the current asset section of Janson's;December 31, 2011, balance sheet?;A. $88.000;B. $55,000;C. $135,000;D. $85,000;5. Janson Corporation Co.'s trial balance included the;following account balances at December 31, 2011;Accounts payable;$25,000;Bond payable, due 2020;22,000;Salaries payable;16,000;Note payable, due 2012;20,000;Note payable, due 2016;40,000;What amount should be included in the current liability;section of Janson's December 31, 2011, balance sheet?;A. $63,000;B. $41,000;C. $101,000;D. $61,000;6. Listed below are account balances (in $millions) taken;from the records of Symphony Stores. All of these are permanent accounts;except the last two that have yet to be closed. The installment receivables are;current. Symphony uses a perpetual inventory system.;https://my.pennfoster.com/exams/images/061500NR_Q16-19.gif;What is the amount of working capital for Symphony?;A. $98;B. $113;C. $128;D. $143;7. In its first year of operations Acme Corp. had income;before tax of $400,000. Acme made income tax payments totaling $150,000 during;the year and has an income tax rate of 40%. What would be the balance in income;tax payable at the end of the year?;A. $10,000 debit.;B. $150,000 credit.;C. $10,000 credit.;D. $160,000 credit.;8. On December 31, 2011, the end of Larry's Used Cars first;year of operations, the accounts receivable was $53,600. The company estimates;that $1,200 of the year-end receivables will not be collected. Accounts;receivable in the 2011 balance sheet will be valued at;A. $1,200.;B. $52,400.;C. $53,600.;D. $54,800.;9. Which of the following was the first private sector;entity that set accounting standards in the United States?;A. AICPA;B. Committee on Accounting Procedure;C. Accounting Principles Board;D. Financial Accounting Standards Board;10. The most political issue in the FASB's most recent;deliberations and amendments to GAAP on business combinations was;A. the negative effects on subsequent earnings of amortizing;goodwill if firms were required to use the pooling method of accounting for the;combination.;B. the unrealistic balance sheet assets that would be;created if firms were required to use the purchase method of accounting for the;combination.;C. the negative effects on subsequent earnings of amortizing;goodwill if firms were required to use the purchase method of accounting for;the combination.;D. the unrealistic balance sheet assets that would be;created if firms were required to use the pooling method of accounting for the;combination.;11. On September 1, 2011, Fortune Magazine sold 600 one-year;subscriptions for $81 each. The total amount received was credited to unearned;subscriptions revenue. What would be the required adjusting entry at December;31, 2011?;a.;Unearned subscriptions revenue;48,600;?Subscriptions revenue;16,200;?Prepaid subscriptions;32,400;b.;Unearned subscriptions revenue;16,200;?Subscriptions revenue;16,200;c.;Unearned subscriptions revenue;16,200;?Subscriptions payable;16,200;d.;Unearned subscriptions revenue;32,400;?Subscriptions revenue;32,400;A. Option b;B. Option c;C. Option a;D. Option d;12. Eve's Apples opened business on January 1, 2011, and;paid for two insurance policies effective that date. The liability policy was;$36,000 for eighteen months, and the crop damage policy was $12,000 for a;two-year term. What was the balance in Eve's prepaid insurance as of December;31, 2011?;A. $18,000;B. $48,000;C. $30,000;D. $9,000;13. The mostlikely important flaw leading to the demise of;the APB was the perceived lack of;A. competence.;B. confidence.;C. importance.;D. independence.;14. An example of a contra account is;A. depreciation expense.;B. accounts receivable.;C. accumulated depreciation.;D. sales revenue.;15. Yummy Foods purchased a two-year fire and extended;coverage insurance policy on August 1, 2011, and charged the $4,200 premium to;Insurance expense. At its December 31, 2011, year-end, Yummy Foods would record;which of the following adjusting entries?;a.;Insurance expense;875;?Prepaid insurance;875;b.;Prepaid insurance;875;?Insurance expense;875;c.;Insurance expense;875;Prepaid insurance;3,325;?Insurance payable;4,200;d.;Prepaid insurance;3,325;?Insurance expense;3,325;A. Option c;B. Option d;C. Option b;D. Option a;16. The primary historical reason for the FASB reversing its;positions when political pressures occur is that;A. the cost of gathering data was prohibitive.;B. the SEC didn't support the FASB position.;C. they have no authority in such situations.;D. the difficulties in measurement were too great.;17. In its first year of operations Best Corp. had income;before tax of $500,000. Best made income tax payments totaling $210,000 during;the year and has an income tax rate of 40%. What was Best's net income for the;year?;A. $300,000;B. $306,000;C. $294,000;D. $290,000;18. Based on recent financial statement data for Harmony;Health Foods, Inc. (HHF), shown below, HHF's debt-to-equity ratio is (rounded);https://my.pennfoster.com/exams/images/061500NR_Q36-38.gif;A. 0.53.;B. 0.75.;C. 1.13.;19. Listed below are account balances (in $millions) taken;from the records of Symphony Stores. All of these are permanent accounts;except the last two that have yet to be closed. The installment receivables are;current. Symphony uses a perpetual inventory system.;https://my.pennfoster.com/exams/images/061500NR_Q16-19.gif;What would Symphony report as total current assets?;A. $838;B. $843;C. $1,696;D. $823;20. Davis Hardware Company uses a perpetual inventory;system. How should Davis record the sale of merchandise, costing $620, and sold;for $960 on account?;a.;Inventory;620;?Accounts receivable;620;Sales;960;?Revenue from sales;960;b.;Accounts receivable;960;?Sales revenue;960;Cost of goods sold;620;?Inventory;620;c.;Inventory;620;Gain on sale;340;?Sales revenue;960;d.;Accounts receivable;960;?Sales revenues;620;?Gain on sale;340;A. Option b;B. Option c;C. Option a;D. Option d;21. SFAC No.5 focuses on;A. recognition and measurement concepts in accounting.;B. qualitative characteristics of accounting information.;C. objectives of financial reporting.;D. elements of financial statements.;22. The primary objective of financial accounting;information is to provide useful information to;A. capital providers.;B. none of the entities mentioned here.;C. regulators.;D. management.;23. In its first year of operations, Best Corp. had income;before tax of $500,000. Best made income tax payments totaling $210,000 during;the year and has an income tax rate of 40%. What was Best's net income for the;year?;A. $306,000;B. $294,000;C. $290,000;D. $300,000;24. Permanent accounts would not include;A. accumulated depreciation.;B. inventory.;C. cost of goods sold.;D. current liabilities.;25. Ace Bonding Company purchased merchandise inventory on;account. The inventory costs $2,000 and is expected to sell for $3,000.;Indicate how Ace should record the purchase by selecting one of the options;listed below.;a.;Inventory;2,000;?Accounts payable;2,000;b.;Cost of goods sold;2,000;Deferred revenue;1,000;?Sales in advance;3,000;c.;Cost of goods sold;2,000;?Inventory payable;2,000;d.;Cost of goods sold;2,000;Profit;1,000;?Sales payable;3,000;A. Option a;B. Option b;C. Option d;D. Option c;26. The Hamada Company sales for 2011 totaled $150,000 and;purchases totaled $95,000. Selected January 1, 2011, balances were: accounts;receivable, $18,000, inventory, $14,000, and accounts payable, $12,000.;December 31, 2011, balances were: accounts receivable, $16,000, inventory;$15,000, and accounts payable, $13,000. Net cash flows from these activities;were;A. $74,000.;B. $45,000.;C. $58,000.;D. $55,000.;27. Which of the following accounts has a debit balance?;A. Accumulated depreciation;B. Bad debt expense;C. Accounts payable;D. Accrued taxes;28. On June 1, Royal Corp. began operating a service company;with an initial cash investment by shareholders of $2,000,000. The company;provided $6,400,000 of services in June and received full payment in July.;Royal also incurred expenses of $3,000,000 in June that were paid in August.;During June, Royal paid its shareholders cash dividends of $1,000,000. What was;the company's income before income taxes for the two months ended July 31 under;the following methods of accounting?;??;Cash Basis;Accrual Basis;a.;$3,400,000;$3,400,000;b.;$5,400,000;$2,400,000;c.;$6,400,000;$3,400,000;d.;$6,400,000;$2,400,000;A. Option a;B. Option d;C. Option b;D. Option c;29. Which of the following is nottrue about net operating;cash flow?;A. It's easy to understand, and all information required to;measure it is factual.;B. It's a measure used in accrual accounting and is;recognized as the best predictor of future operating cash flows.;C. It's the difference between cash receipts and cash;disbursements from providing goods and services.;D. Over short periods of time, it may not be indicative of;long-run cash-generating ability.;30. Dave's Duds reported cost of goods sold of $2,000,000;this year. The inventory account increased by $200,000 during the year to an;ending balance of $400,000. What was the cost of merchandise that Dave;purchased during the year?;A. $1,800,000;B. $2,200,000;C. $2,400,000;D. $1,600,000;31. A cause-and-effect relationship is implicit in the;A. matching principle.;B. realization principle.;C. historical cost principle.;D. going concern assumption.;32. On November 1, 2011, Tim's Toys borrows $30,000,000 at;9% to finance the holiday sales season. The note is for a six-month term and;both principal and interest are payable at maturity. What should be the balance;of interest payable for the loan as of December 31, 2011?;A. $450,000.;B. $112,500.;C. $225,000.;D. $1,350,000.;33. Molly's Auto Detailers maintains its records on the cash;basis. During 2011, Molly's collected $72,000 from customers and paid $21,000;in expenses. Depreciation expense of $5,000 would have been recorded on the;accrual basis. Over the course of the year, accounts receivable increased;$4,000, prepaid expenses decreased $2,000, and accrued liabilities decreased;$1,000. Molly's accrual basis net income would be;A. $54,000.;B. $38,000.;C. $42,000.;D. $49,000.;34. Pat's Custom Tuxedo Shop maintains its records on the;cash basis. During this past year Pat's collected $42,000 in tailoring fees;and paid $14,000 in expenses. Depreciation expense totaled $2,000. Accounts;receivable increased $1,500, supplies increased $4,000, and accrued liabilities;increased $2,500. Pat's accrual basis net income would be;A. $23,000.;B. $34,000.;C. $18,000.;D. $29,000.;35. Cal Farms reported supplies expense of $2,000,000 this;year. The supplies account decreased by $200,000 during the year to an ending;balance of $400,000. What was the cost of supplies the Cal Farms purchased;during the year?;A. $2,400,000;B. $1,800,000;C. $2,200,000;D. $1,600,000;36. The full disclosure principle requires a balance between;A. relevance and cost effectiveness.;B. timeliness and predictive value.;C. reliability and neutrality.;D. comparability and consistency.;37. In its first year of operations Acme Corp. had income;before tax of $400,000. Acme made income tax payments totaling $150,000 during;the year and has an income tax rate of 40%. What would be the balance in income;tax payable at the end of the year?;A. $160,000 credit.;B. $10,000 debit.;C. $10,000 credit.;D. $150,000 credit.;38. Listed below are account balances (in $millions) taken;from the records of Symphony Stores. All of these are permanent accounts;except the last two that have yet to be closed. The installment receivables are;current. Symphony uses a perpetual inventory system.;https://my.pennfoster.com/exams/images/061500NR_Q16-19.gif;What would Symphony report as total assets?;A. $2,318;B. $2,303;C. $2,338;D. $2,323;39. Assume a company's liquidity and financing ratios all;are less than 1.0 before it purchases inventory on credit. When it makes the;purchase;A. its quick ratio remains unchanged.;B. its quick ratio decreases.;C. its current ratio remains unchanged.;D. its current ratio decreases.;40. Based on recent financial statement data for Harmony;Health Foods, Inc. (HHF), shown below, HHF's long term debt-to-equity ratio;equity is;https://my.pennfoster.com/exams/images/061500NR_Q36-38.gif.;A. 133.3%.;B. 180%.;C. 75%;41. Based on recent financial statement data for Harmony;Health Foods, Inc. (HHF), shown below, HHF's times interest earned ratio is;(rounded);https://my.pennfoster.com/exams/images/061500NR_Q36-38.gif.;A. 3.47;B. 1.73.;C. 2.47.

 

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