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ACC 291 Final Exam Questions with Answers Options

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Question;ACC 291 Final Exam;1) Intangible assets are the rights and privileges;that result from ownership of long-lived assets that;2) Gains on an exchange of plant assets that has;commercial substance are;3) Using the percentage of receivables method for recording;bad debts expense, estimated uncollectible accounts are $15,000. If the balance;of the Allowance for Doubtful Accounts is $3,000 credit before adjustment, what;is the amount of bad debts expense for that period?;4) When an interest-bearing note matures, the balance;in the Notes Payable account is;5) Costs incurred to increase the operating efficiency;or useful life of a plant asset are referred to as;6) Hilton Company issued a four-year interest-bearing;note payable for $300,000 on January 1, 2011. Each January the company is;required to pay $75,000 on the note. How will this note be reported on the;December 31, 2012 balance sheet?;7) When the effective-interest method of bond discount;amortization is used;8) Capital stock to which the charter has assigned a;value per share is called;9) Manner, Inc. has 5,000 shares of 5%, $100 par;value, noncumulative preferred stock and 20,000 shares of $1 par value common;stock outstanding at December 31, 2011. There were no dividends declared in;2010. The board of directors declares and pays a $45,000 dividend in 2011. What;is the amount of dividends received by the common stockholders in 2011?;10) Two individuals at a retail store work the same;cash register. You evaluate this situation as;11) The Sarbanes-Oxley Act imposed which new penalty;for executives?;12) The Sarbanes-Oxley Act requires that all publicly;traded companies maintain a system of internal controls. Internal controls can;be defined as a plan to;13) The purchase of treasury stock;14) Which of the following is a fundamental factor in;having an effective, ethical corporate culture?;15) Dawson Company issued 500 shares of no-par common;stock for $4,500. Which of the following journal entries would be made if the;stock has a stated value of $2 per share?;16) Hahn Company uses the percentage of sales method;for recording bad debts expense. For the year, cash sales are $300,000 and;credit sales are $1,200,000. Management estimates that 1% is the sales;percentage to use. What adjusting entry will Hahn Company make to record the;bad debts expense?;17) Blanco, Inc. has the following income statement;(in millions);BLANCO, INC.;Income Statement for the Year Ended December 31;2011;Net Sales: $200;Cost of Goods Sold: 120;Gross Profit $80;Operating Expenses:$44;Net Income: $36;Using vertical analysis, what percentage is assigned;to Net Income?;18) Marsh Company has other operating expenses of;$240,000. There has been an increase in prepaid expenses of $16,000 during the;year, and accrued liabilities are $24,000 lower than in the prior period. Using;the direct method of reporting cash flows from operating activities, what were;Marsh's cash payments for operating expenses?;19) Andrews, Inc. paid $45,000 to buy back 9,000;shares of its $1 par value common stock. This stock was sold later at a selling;price of $6 per share. The entry to record the sale includes a;20) The book value of an asset is equal to the;21) Ordinary repairs are expenditures to maintain the;operating efficiency of a plant asset and are referred to as;22) The interest charged on a $200,000 note payable;at a rate of 6%, on a 2-month note would be;23) If a corporation issued $3,000,000 in bonds which;pay 10% annual interest, what is the annual net cash cost of this borrowing if;the income tax rate is 30%?;24) A corporation issued $600,000, 10%, 5-year bonds;on January 1, 2011 for 648,666, which reflects an effective-interest rate of;8%. Interest is paid semiannually on January 1 and July 1. If the corporation;uses the effective-interest method of amortization of bond premium, the amount;of bond interest expense to be recognized on July 1, 2011, is;25) If a corporation has only one class of stock, it;is referred to as;26) ABC, Inc. has 1,000 shares of 5%, $100 par value;cumulative preferred stock and 50,000 shares of $1 par value common stock;outstanding at December 31, 2011. What is the annual dividend on the preferred;stock?;28) When the selling price of treasury stock is;greater than its cost, the company credits the difference to;29) Intangible assets???;30) Where would the event purchased land for cash;appear, if at all, on the indirect statement of cash flows?;ACC 291 Final Exam;1);Intangible assets are the rights and privileges that result from ownership of;long-lived assets that;A. must be generated internally;B. are non-renewable natural resources;C. do not have physical substance;D. have been exchanged at a gain;2) Gains on an exchange of plant;assets that has commercial substance are;A. deducted from thecostof;the new asset acquired;B. deferred;C. not possible;D. recognized;immediately;3) Using the percentage of;receivables method for recording bad debts expense, estimated uncollectible;accounts are $15,000. If the balance of the Allowance for Doubtful Accounts is;$3,000 credit before adjustment, what is the amount of bad debts expense for;that period?;A. $15,000;B. $12,000;C. $18,000;D. $8,000;4) When an interest-bearing note;matures, the balance in the Notes Payable account is;A. less than the total amount repaid by the;borrower;B. the difference between the maturityvalueof;the note and the face value of the note;C. equal to the total amount repaid by the owner;D. greater than the total amount repaid by the owner;5) Costs incurred to increase the;operating efficiency or useful life of a plant asset are referred to as;A. capital expenditures;B. expenseexpenditures;C. ordinary repairs;D. revenue expenditures;6) Hilton Company issued a;four-year interest-bearing note payable for $300,000 on January 1, 2011. Each;January the company is required to pay $75,000 on the note. How will this note;be reported on the December 31, 2012 balance sheet?;A. Long-termdebt, $300,000.;B. Long-term debt, $225,000.;C. Long-term;debt, $150,000, Long-term debt due within one year, $75,000.;D. Long-termdebt, $225,000, Long-term debt due within one year;$75,000.;7) When the effective-interest;method of bond discount amortization is used;A. the applicableinterestrateused to compute interest expense is;the prevailing market interest rate on the date of each interest payment date;B. the carryingvalueof;the bonds will decrease each period;C. interest;expense will not be a constant dollar amount over the life of the bond;D. interest paid to bondholders will be a function of the effective-interest;rate on the date thebondswere;issued;8) Capital stock to which the;charter has assigned a value per share is called;A. par value stock;B. no-par valuestock;C. stated value stock;D. assigned value stock;9) Manner, Inc. has 5,000 shares;of 5%, $100 par value, noncumulative preferred stock and 20,000 shares of $1;par value common stock outstanding at December 31, 2011. There were no;dividends declared in 2010. The board of directors declares and pays a $45,000;dividend in 2011. What is the amount of dividends received by the common;stockholders in 2011?;A. $0;B. $25,000;C. $45,000;D. $20,000;10) Two individuals at a retail;store work the same cash register. You evaluate this situation as;A. a violation of establishment of;responsibility;B. a violation of segregation of duties;C. supportingthe establishment of responsibility;D. supporting internal independent verification;11) The Sarbanes-Oxley Act;imposed which new penalty for executives?;A. Fines;B. Suspension;C. Criminal;prosecution for executives;D. Return of ill-gotten gains;12) The Sarbanes-Oxley Act;requires that all publicly traded companies maintain a system of internal;controls. Internal controls can be defined as a plan to;A.safeguard assets;B.monitorbalancesheets;C.control liabilities;D.evaluate capitalstock;13) The purchase of treasury;stock;A. decreases commonstockauthorized;B. decreases common stock issued;C. decreases;common stock outstanding;D. has no effect oncommonstockoutstanding;14) Which of the following is a;fundamental factor in having an effective, ethical corporate culture?;A. Efficient oversight by the;company?sBoardofDirectors;B. Workplace ethics;C. Code of;conduct;D. Ethics management programs;15) Dawson;Company issued 500 shares of no-par common stock for $4,500. Which of the;following journal entries would be made if the stock has a stated value of $2;per share?;A. Cash: $4,500;Common Stock: 4,500;B. Cash: $4,500;Common Stock: 1,000;Paid-In Capital in Excess of Par 3,500;C. Cash;$4,500;Common Stock: 1,000;Paid-In Capital in Excess of StatedValue 3,500;D. Common Stock: $4,500;Cash:$4,500;16) Hahn Company uses;the percentage of sales method for recording bad debts expense. For the year;cash sales are $300,000 and credit sales are $1,200,000. Management estimates;that 1% is the sales percentage to use. What adjusting entry will Hahn Company;make to record the bad debts expense?;A.Bad DebtsExpense: $15,000;Allowances for DoubtfulAccounts: $15,000;B.Bad Debts Expense;$12,000;Allowances for Doubtful Accounts: $12,000;C.Bad Debts Expense: $12,000;Accounts Receivable: $12,000;D.Bad Debts Expense: $15,000;Accounts Receivable: $15,000;17) Blanco, Inc. has the;following income statement (in millions);BLANCO, INC.;IncomeStatement for the;Year Ended December 31, 2011;Net Sales: $200;Costof Goods Sold: 120;GrossProfit $80;Operating Expenses:$44;NetIncome: $36;Using vertical analysis, what;percentage is assigned to Net Income?;A. 100%;B. 82%;C. 18%;D. 25%;18) Marsh Company has other;operating expenses of $240,000. There has been an increase in prepaid expenses;of $16,000 during the year, and accrued liabilities are $24,000 lower than in;the prior period. Using the direct method of reporting cash flows from;operating activities, what were Marsh's cash payments for operating expenses?;A. $228,000;B. $232,000;C. $200,000;D. $280,000;19) Andrews, Inc. paid $45,000 to;buy back 9,000 shares of its $1 par value common stock. This stock was sold;later at a selling price of $6 per share. The entry to record the sale includes;a;A. credit to Paid-In Capital from Treasury;Stock for $9,000;B. credit to RetainedEarningsfor;$9,000;C. debit to Pain-In Capital from TreasuryStockfor;$45,000;D. debit to Retained Earnings for $45,000;20) The book value of an asset is;equal to the;A. asset?smarketvalueless its historic cost;B. blue book value relied on by secondary markets;C. replacementcostof;the asset;D. asset?s;cost less accumulated depreciation;21) Ordinary repairs are;expenditures to maintain the operating efficiency of a plant asset and are;referred to as;A. capitalexpenditures;B. expense expenditures;C. improvements;D. revenue;expenditures;22) The interest charged on a;$200,000 note payable, at a rate of 6%, on a 2-month note would be;A. $12,000;B. $6,000;C. $3,000;D. $2,000;23) If a corporation issued;$3,000,000 in bonds which pay 10% annual interest, what is the annual net cash;cost of this borrowing if the income tax rate is 30%?;A. $3,000,000;B. $90,000;C. $300,000;D. $210,000;24) A corporation issued;$600,000, 10%, 5-year bonds on January 1, 2011 for 648,666, which reflects an;effective-interest rate of 8%. Interest is paid semiannually on January 1 and;July 1. If the corporation uses the effective-interest method of amortization;of bond premium, the amount of bond interest expense to be recognized on July;1, 2011, is;A. $30,000;B. $24,000;C. $32,434;D. $25,946;25) If a corporation has only one;class of stock, it is referred to as;A. classlessstock;B. preferred stock;C. solitary stock;D. common;stock;26) ABC, Inc. has 1,000 shares of;5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par;value common stock outstanding at December 31, 2011. What is the annual;dividend on the preferred stock?;A. $50 per share;B. $5,000 in;total;C. $500 in total;D. $.50 per share;27) When the selling price of;treasury stock is greater than its cost, the company credits the difference to;A. Gain on Sale of TreasuryStock;B. Paid-in;Capital from Treasury Stock;C. Paid-in Capital in Excess of Par Value;D. Treasury Stock;28) Intangible assets???;A. should be reported under the;headingProperty, Plant, and Equipment;B. should be;reported as a separate classification on the balance sheet;C. should be reported as CurrentAssetson;the balance sheet;D. are not reported on thebalancesheet;because they lack physical substance;29) Where would the event;purchased land for cash appear, if at all, on the indirect statement of cash;flows?;A. Operating activities section;B. Investing;activities section;C. Financingactivities section;D. Does not represent a cash flow

 

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