Details of this Paper

Accounting multiple choice questions

Description

solution


Question

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.;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);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.;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.;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.;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):.;A.;3.47;B.;1.73.;C.;2.47.

 

Paper#39659 | Written in 18-Jul-2015

Price : $37
SiteLock