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accounting mcq quiz and problems with A+ answers

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Question;You invested $5,000 in the Cog corporation and $5,000 in the Gear corporation. Both of these corporations have $100 million in total assets. The Cog corporation had a net profit of $5 million and the Gear corporation had a net profit of $10 million. You read their annual reports and both companies had established a goal of having net profit equal to 10% of total assets. Which of the following statements is true regarding these 2 firms?Cog is effective and more efficient than Gear.Cog is effective but less efficient than Gear.Gear is effective and more efficient then Cog.Gear is effective but less efficient than Cog.Cannot tell without more information.2 pointsQuestion 3Sam quit his job as an accountant with We Keep Books Accurately to open his own accounting firm. He earned $40,000 with the accounting firm We Keep Books Accurately. During the current year Sam had revenues of $190,000 and total expenses of $110,000. Sam earned anaccounting profit of $40,000.accounting profit of $80,000 and an entrepreneurial profit of $40,000.entrepreneurial profit of $80,000, but an accounting of $40,000.entrepreneurial profit of $80,000.Cannot tell from the information provided.2 pointsQuestion 4Sam quit his job as an accountant with We Keep Books Accurately to open his own accounting firm. He earned $40,000 with the accounting firm We Keep Books Accurately. During the current year Sam had revenues of $150,000 and total expenses of $110,000. For Sam the opportunity cost of going into business was$40,000.$110,000.$150,000.zero because he has a profitable business.2 pointsQuestion 5All of the costs that a firm must pay, even if there are no sales, arecontribution costs.fixed costs.variable costs.sales cost.2 pointsQuestion 6Table 5-1. Steel Shelf CompanyCategory CostPayment PeriodCostRentMonthly$ 3,000UtilitiesMonthly1,100InsuranceQuarterly1,200Property TaxesAnnually6,000SteelPer Shelf9.00FormingPer Shelf0.25LaborPer Shelf0.75PricePer Shelf20.00Refer to Table 5-1. The Steel Shelf company has variable costs per unit of ________.$10.00$18.33$20.00$25.00$30,002 pointsQuestion 7Table 5-1. Steel Shelf CompanyCategory CostPayment PeriodCostRentMonthly$ 3,000UtilitiesMonthly1,100InsuranceQuarterly1,200Property TaxesAnnually6,000SteelPer Shelf9.00FormingPer Shelf0.25LaborPer Shelf0.75PricePer Shelf20.00Refer to Table 5-1. The Steel Shelf company has monthly fixed costs of _____ and a contribution margin of _____.$5,000, $10$5,000, $20$5,800, $10$11,300, $10$11,300, $202 pointsQuestion 8Table 5-1. Steel Shelf CompanyCategory CostPayment PeriodCostRentMonthly$ 3,000UtilitiesMonthly1,100InsuranceQuarterly1,200Property TaxesAnnually6,000SteelPer Shelf9.00FormingPer Shelf0.25LaborPer Shelf0.75PricePer Shelf20.00Refer to Table 5-1. The Steel Shelf company has a monthly break-even quantity of _____ shelves.2505005801,130Cannot calculate with information provided.2 pointsQuestion 9Table 5-1. Steel Shelf CompanyCategory CostPayment PeriodCostRentMonthly$ 3,000UtilitiesMonthly1,100InsuranceQuarterly1,200Property TaxesAnnually6,000SteelPer Shelf9.00FormingPer Shelf0.25LaborPer Shelf0.75PricePer Shelf20.00Refer to Table 5-1. If the Steel Shelf Company wants to earn a profit of $3,000 per month they will have to produce _____ shelves.5008001,0001,5002 pointsQuestion 10Table 5-1. Steel Shelf CompanyCategory CostPayment PeriodCostRentMonthly$ 3,000UtilitiesMonthly1,100InsuranceQuarterly1,200Property TaxesAnnually6,000SteelPer Shelf9.00FormingPer Shelf0.25LaborPer Shelf0.75PricePer Shelf20.00Refer to Table 5-1. The Steel Shelf company has annual fixed costs of ________.$5,300$56,400$60,000$69,600$135,6002 pointsQuestion 11Table 5-1. Steel Shelf CompanyCategory CostPayment PeriodCostRentMonthly$ 3,000UtilitiesMonthly1,100InsuranceQuarterly1,200Property TaxesAnnually6,000SteelPer Shelf9.00FormingPer Shelf0.25LaborPer Shelf0.75PricePer Shelf20.00Refer to Table 5-1. The Steel Shelf company has to have annual revenue of _____ in order to break even.$10,000$120,000$69,600$135,600Cannot calculate with information provided.2 pointsQuestion 12The earning power of a company can be defined as the product of 2 factors:fixed asset turnover and cash flow per share.net profit margin and fixed asset turnover.net profit margin and total asset turnover.total asset turnover and earnings per share.If a firm has $400,000 in credit sales and $100,000 in accounts receivable, accounts receivable turnover is.25%.4.5.14.Marketable securitiesconsist of government securities only.normally pay a higher rate of interest than checking accounts.never require an investment strategy.never offer any risk.Which of the following is a method used to speed up cash receipts?lock box.electronic funds transfer.writing a check.a and b above.b and c above..All of the following are part of working capital exceptaccounts receivable.inventory.mortgage.cash.none of the above.Use the following information to answer this question: Bill?s Furniture has just completed the first year of operation for his business and has the following information: sales, $200,000, cost of goods sold, $140,000, rent, $18,000, utilities, $8,400, insurance, $2,000, depreciation on equipment, $3,500, and interest, $10,000. Your forecast indicates that your sales will increase by 20%. Your rental agreement provides for a 3 increase percent per year. Bill has just read an article indicating that utility costs in his area will increase by 10% next year. Also, Bill just received a notice from his insurance company stating that his quarterly premium will increase to $600 beginning the first quarter of next year. The depreciation expense on the equipment will not change, however, Bill?s loan amortization schedule indicates that interest expense next year will be $9,000. Pro forma sales for Bill?s second year of operation is __________.$40,000.$200,000$240,000$220,0002 pointsQuestion 26Use the following information to answer this question: Bill?s Furniture has just completed the first year of operation for his business and has the following information: sales, $200,000, cost of goods sold, $140,000, rent, $18,000, utilities, $8,400, insurance, $2,000, depreciation on equipment, $3,500, and interest, $10,000. Your forecast indicates that your sales will increase by 20%. Your rental agreement provides for a 3 increase percent per year. Bill has just read an article indicating that utility costs in his area will increase by 10% next year. Also, Bill just received a notice from his insurance company stating that his quarterly premium will increase to $600 beginning the first quarter of next year. The depreciation expense on the equipment will not change, however, Bill?s loan amortization schedule indicates that interest expense next year will be $9,000. The projected rent expense for Bill?s second year of operation is __________.$18,000.$18,540.$23,400.$19,800.2 pointsQuestion 27Use the following information to answer this question: Bill?s Furniture has just completed the first year of operation for his business and has the following information: sales, $200,000, cost of goods sold, $140,000, rent, $18,000, utilities, $8,400, insurance, $2,000, depreciation on equipment, $3,500, and interest, $10,000. Your forecast indicates that your sales will increase by 20%. Your rental agreement provides for a 3 increase percent per year. Bill has just read an article indicating that utility costs in his area will increase by 10% next year. Also, Bill just received a notice from his insurance company stating that his quarterly premium will increase to $600 beginning the first quarter of next year. The depreciation expense on the equipment will not change, however, Bill?s loan amortization schedule indicates that interest expense next year will be $9,000. Pro forma net income for Bill?s Furniture in the second year is __________.$18,100.$30.160.$21,720.$29,320.Which of the following statements about forecasting is false?Product life cycle influences the length of the forecast.The forecasting horizon should be at least as long as your strategic plan.The longer the time horizon the more accurate the forecast will be.The longer the time horizon the more inaccurate the forecast will be.There is an inverse relationship between forecast accuracy and time.2 pointsQuestion 18Which of the following is the most appropriate firm to use the survey of sales force?Ace HardwareBest BuyBurger KingIBMK-MartWhich of the following is the correct sequence of events?pro forma balance sheet, pro forma cash budget, pro forma income statementpro forma balance sheet, pro forma income statement, pro forma cash budgetpro forma income statement, pro forma cash budget, pro forma balance sheetnone of the above.Refer to Table 6.1 to answer this question. Table 6-1Balance SheetTotal SalesPercentageForecast SalesCurrent YearofNext Year$225,000Sales$300,000AssetsCurrent AssetsCash$5,694Accounts Receivable19,662Inventory3,381Total Current Assets28,737Fixed AssetsFurniture & Fixtures5,595Equipment25,456Total Fixed Assets31,051Total Assets$59,788Liabilities and Owner's EquityCurrent LiabilitiesNotes Payable$15,456Accrued Taxes Payable3,598Total Current Liabilities19,054Long-Term Debt18,654Total Liabilities37,708Owner's Equity22,080Total Liabilities & Owner's Equity$59,788The current ratio for the current year is __________.1.51.0.76.1.59.1.54.2 pointsQuestion 29Refer to Table 6-1 to answer this question. Table 6-1Balance SheetTotal SalesPercentageForecast SalesCurrent YearofNext Year$225,000Sales$300,000AssetsCurrent AssetsCash$5,694Accounts Receivable19,662Inventory3,381Total Current Assets28,737Fixed AssetsFurniture & Fixtures5,595Equipment25,456Total Fixed Assets31,051Total Assets$59,788Liabilities and Owner's EquityCurrent LiabilitiesNotes Payable$15,456Accrued Taxes Payable3,598Total Current Liabilities19,054Long-Term Debt18,654Total Liabilities37,708Owner's Equity22,080Total Liabilities & Owner's Equity$59,788When forecasted sales for next year are $300,000, projected long-term debt using the percentage of sales method for next year is __________.$25,410.$28,281.$29,430.$24,870.2 pointsQuestion 30Refer to Table 6-1 to answer this question. Table 6-1Balance SheetTotal SalesPercentageForecast SalesCurrent YearofNext Year$225,000Sales$300,000AssetsCurrent AssetsCash$5,694Accounts Receivable19,662Inventory3,381Total Current Assets28,737Fixed AssetsFurniture & Fixtures5,595Equipment25,456Total Fixed Assets31,051Total Assets$59,788Liabilities and Owner's EquityCurrent LiabilitiesNotes Payable$15,456Accrued Taxes Payable3,598Total Current Liabilities19,054Long-Term Debt18,654Total Liabilities37,708Owner's Equity22,080Total Liabilities & Owner's Equity$59,788When forecasted sales for next year are $300,000, total assets next year are estimated at __________ when the percentage of sales method is used.$104,629.$77,724.$79,710.$79,717.

 

Paper#42233 | Written in 18-Jul-2015

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