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ACC 291 Final Exam

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ACC291 Final Exam (100% correct answers);1) 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 Debts Expense 15000 Allowances for Doubtful Accounts 15000;B. Bad Debts Expense 12000 Allowances for Doubtful Accounts 12000;C. Bad Debts Expense $12,000 Accounts Receivable $12,000;D. Bad Debts Expense $15,000 Accounts Receivable $15,000;2) 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;3) Intangible assets;A. should be reported under the heading Property, Plant, and Equipment;B. should be reported as a separate classification on the balance sheet;C. should be reported as Current Assets on the balance sheet;D. are not reported on the balance sheet because they lack physical substance;4) Intangible assets are the rights and privileges that result from ownership of long-lived assets that;A. must be generated internally;B. are depletable natural resources;C. do not have physical substance;D. have been exchanged at a gain;5) The book value of an asset is equal to the;A. asset?s market value less its historic cost;B. blue book value relied on by secondary markets;C. replacement cost of the asset;D. asset?s cost less accumulated depreciation;6) Gains on an exchange of plant assets that has commercial substance are;A. deducted from the cost of the new asset acquired;B. deferred;C. not possible;D. recognized immediately;7) Ordinary repairs are expenditures to maintain the operating efficiency of a plant asset and are referred to as;A. capital expenditures;B. expense expenditures;C. improvements;D. revenue expenditures;8) Costs incurred to increase the operating efficiency or useful life of a plant asset are referred to as;A. capital expenditures;B. expense expenditures;C. ordinary repairs;D. revenue expenditures;9) 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 maturity value of 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;10) 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;11) 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;12) 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-term debt, $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-term debt, $225,000, Long-term debt due within one year, $75,000;13) 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;14) When the effective-interest method of bond discount amortization is used;A. the applicable interest rate used to compute interest expense is the prevailing market interest rate on the date of each interest payment date;B. the carrying value of 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 the bonds were issued;15) If a corporation has only one class of stock, it is referred to as;A. classless stock;B. preferred stock;C. solitary stock;D. common stock;16) Capital stock to which the charter has assigned a value per share is called;A. par value stock;B. no-par value stock;C. stated value stock;D. assigned value stock;17) 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;18) 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;19) When the selling price of treasury stock is greater than its cost, the company credits the difference to;A. Gain on Sale of Treasury Stock;B. Paid-in Capital from Treasury Stock;C. Paid-in Capital in Excess of Par Value;D. Treasury Stock;20) The purchase of treasury stock;A. decreases common stock authorized;B. decreases common stock issued;C. decreases common stock outstanding;D. has no effect on common stock outstanding;21) 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;22) 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. Financing activities section;D. Does not represent a cash flow;23) In performing a vertical analysis, the base for cost of goods sold is;A. total selling expenses;B. net sales;C. total revenues;D. total expenses;24) Blanco, Inc. has the following income statement (in millions);Using vertical analysis, what percentage is assigned to Net Income?;A. 100%;B. 82%;C. 18%;D. 25%;25) 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 Stated Value 3,500;D. Common Stock $4,500 Cash 4,500;26) 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 Retained Earnings for $9,000;C. debit to Pain-In Capital from Treasury Stock for $45,000;D. debit to Retained Earnings for $45,000;27) Which of the following is a fundamental factor in having an effective, ethical corporate culture?;A. Efficient oversight by the company?s Board of Directors;B. Workplace ethics;C. Code of conduct;D. Ethics management programs;28) 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. supporting the establishment of responsibility;D. supporting internal independent verification;29) 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;30) 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. monitor balance sheets;C. control liabilities;D. evaluate capital stock;Here is some additional information on items you missed;Topic;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%? Question Source Textbook: Ch. 10, Financial Accounting;Topic;Which of the following is a fundamental factor in having an effective, ethical corporate culture? Question Source SME: Ch. 7, Financial Accounting, Danyell Weaver

 

Paper#74027 | Written in 18-Jul-2015

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