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1. (TCO A) An advantage of the corporate form of business is that _____. (Points: 5);it has limited life;its owner's personal resources are at stake;its ownership is easily transferable via the sale of shares of stock;it is simple to establish;2. (TCO A) The Dividends account _____. (Points: 5);is increased with a debit;is decreased with a credit;is not an expense account;All of the above;3. (TCOs A, B) Below is a partial list of account balances for Denton Company;Cash $7,000;Prepaid insurance 700;Accounts receivable 3,500;Accounts payable 2,800;Notes payable 4,200;Common stock 1,400;Dividends 700;Revenues 21,000;Expenses 17,500;What did Denton Company show as total credits? (Points: 5);$30,100;$29,400;$28,700;$30,800;4. (TCOs B, E) A small and private company may be able to justify using a cash basis of accounting if it has _____. (Points: 5);sales under $1,000,000;no accountants on staff;insignificant receivables and payables;all sales and purchases on account;5. (TCO D) Two companies report the same cost of goods available for sale, but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using _____. (Points: 5);LIFO will have the highest ending inventory;FIFO will have the highest cost of goods sold;FIFO will have the highest ending inventory;LIFO will have the lowest cost of goods sold;6. (TCO A, E) Equipment was purchased for $17,000 on January 1, 2006. Freight charges amounted to $700 and there was a cost of $2,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $3,000 salvage value at the end of its 5-year useful life. What is the amount of accumulated depreciation at December 31, 2007, if the straight-line method of depreciation is used? (Points: 5);$6,680;$3,340;$2,860;$5,720;7. (TCOs D, G) Lopez Corporation issues 500 ten-year, 8%, $1,000 bonds dated January 1, 2007, at 96. The journal entry to record the issuance will show a _____. (Points: 5);debit to Cash of $500,000;credit to Discount on Bonds Payable for $20,000;credit to Bonds Payable for $480,000;debit to Cash for $480,000;8. (TCO C) Accounts receivable arising from sales to customers amounted to $80,000 and $70,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $240,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is _____. (Points: 5);$240,000;$250,000;$310,000;$230,000;9. (TCO F) If you are comparing the 2010 income statement numbers with the income statement numbers from 2009 and 2008, you are conducting a _____. (Points: 5);common-size analysis;horizontal analysis;vertical analysis;ratio analysis;10. (TCO F) Vertical analysis is also known as _____. (Points: 5);perpendicular analysis;common-size analysis;trend analysis;straight-line analysis;11. (TCO F) Which one of the following is not a characteristic generally evaluated in ratio analysis?(Points: 5);Liquidity;Profitability;Marketability of the product;Solvency;12. (TCO F) A common measure of profitability is the _____. (Points: 5);current ratio;current cash debt coverage ratio;return on common stockholder's equity ratio;debt to total assets;13. (TCO F) Long-term creditors are usually most interested in evaluating _____. (Points: 5);liquidity;marketability;profitability;solvency;14. (TCO G) To calculate the market value of a bond, we need to _____. (Points: 15);find out the present value of all of the future cash payments promised by the bond;calculate the present value of the principal only;calculate the present value of the interest only;multiply the bond price by the interest rate


Paper#74129 | Written in 18-Jul-2015

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