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(TCO1) Financial statements are: ______________ (Points: 5) standard documents issued by outside consultants who are hired to analyze key operations...
1. (TCO1) Financial statements are: ______________(Points: 5)standard documents issued by outside consultants who are hired to analyze key operations of the business in financial terms.standard documents that tell us how well a business is performing and where it stands in financial terms.reports created by management that states it is responsible for the acts of the corporation.reports issued by outside consultants who are hired to analyze key operations of the business.2. (TCO2) A company purchased inventory on account. This transaction increased assets and: (Points: 5)increased equityincreased liabilitiesincreased revenuesdecreased assets3. (TCO1) Which principle states that assets acquired by the business should be recorded at their actual price? (Points: 5)cost principle.objectivity principle.reliability principle.stable dollar principle.4. (TCO2) A company paid cash for employee wages. This transaction ________________. (Points: 5)increased cash and increased expenses.increased cash and decreased expenses.decreased cash and increased expenses.decreased cash and decreased revenues.5. (TCO2) Which type of account is increased when a company records a debt? (Points: 5)expenseretained earningsliabilitynone of the above are correct.6. (TCO2) A trial balance has which of the following features? (Points: 5)totals for balance sheet accounts onlytotals for income statement accounts onlytotals for all accounts listed in the general ledgerboth A and B are correct7. (TCO3) A company started the year with $400 of supplies. During the year the company purchased additional supplies costing $1,600. There were $800 of supplies on hand at the end of the year. An adjusted trial balance prepared at the end of the accounting period will show the which of the following balance in Supplies: (Points: 5)$1,400.$800.$600.$0.8. (TCO3) Hamilton Tool and Die Company purchased $72,000 of equipment with an estimated service life of 4 years. The equipment will be worth $4,000 at the end of its life. The annual amount of depreciation on this equipment is: (Points: 5)$17,000.$18,000.$19,000.$0.9. (TCO5) Which of the following items will cause a difference between the book balance and the bank balance? (Points: 5)deposits in timingbank collectionscanceled checksoutstanding voided checks10. (TCO5) Under the allowance method, the entry to write off a $2,600 uncollectible account includes a(n) : (Points: 5)increase to accounts receivable for $2,600.increase to uncollectible-account expense for $2,600.increase to allowance for uncollectible accounts for $2,600.decrease to Accounts Receivable for $2,600.11. (TCO5) Portia Incorporated uses the percentage-of-sales method to estimate uncollectibles. Net credit sales for the current year amount to $2,000,000, and management estimates 2% will be uncollectible. Allowance for Uncollectible Accounts prior to adjustment has a debit balance of $1,900. The amount of expense reported on the income statement and the balance in Allowance for Uncollectible accounts, respectively, will be: (Points: 5)$41,900 and $40,000.$40,000 and $38,100.$38,100 and 40,000.$40,000 and $41,900.12. (TCO5) On December 31, 2007, the payee on a $4,500, 120-day, 10% note dated November 1, 2007, will recognize: (Points: 5)interest receivable, $150.interest receivable, $75.interest payable, $150.interest payable, $75.13. (TCO4) A perpetual inventory system offers which of the following advantages? (Points: 5)inventory balances have to be counted to be accurate.this system is used for inexpensive goods.this system is more expensive than a periodic system.this system helps to determine if there is a sufficient supply of inventory on hand to fill customer orders, just by reviewing the inventory records.14. (TCO4) A company whose inventory consists of very unique items would probably use which inventory method? (Points: 5)first-in, first-outlast-in, first-outspecific unit costweighted-average of only the unique items15. (TCO4) When inventory prices are falling, the LIFO costing method will generally result in a: (Points: 5)lower gross profit than under fifo.higher gross profit than under fifo.lower inventory value than under fifo.lower owners’ equity balance than under FIFO.16. (TCO6) Which of the following should be included in the cost of land?(Points: 5)construction cost of a parking lotlandscapingreal estate brokerage commissionlighting17. (TCO6) Which of the following statements is false?(Points: 5)depreciation is a process of subjective valuation.depreciation is a non-cash expense.accumulated depreciation represents a growing amount of cash to be used to replace the existing asset.accumulated depreciation is that portion of a plant asset’s cost that has been recorded previously as an expense.18. (TCO6) On January 2, 2006, KJ Corporation acquired equipment for $260,000. The estimated life of the equipment is 5 years or 40,000 hours. The estimated residual value is $20,000. What is the book value of the asset on December 31, 2007, if KJ Corporation uses the straight-line method of depreciation?(Points: 5)$80,000$96,000$104,000$164,00019. (TCO6) A gain is recorded on the sale of a plant asset when the:(Points: 5)cash received exceeds the asset’s book value.asset’s book value is less than its historical cost.asset’s book value is greater than the amount of cash received from the sale.cash received exceeds the cash paid for the replacement asset.20. (TCO6) Current liabilities fall into two categories which are referred to as: (Points: 5)liabilities of a known amount and estimated liabilities.contingent liabilities and noncontingent liabilities.contingent liabilities and contra-liabilities.unearned liabilities and accrued liabilities.21. (TCO7) How does an investment of cash in a corporation affect the corporation’s balance sheet? (Points: 5)it increases assets and decreases stockholders’ equity.it increases assets and increases stockholders’ equity.it increases assets and increases liabilities.it increases assets and decreases liabilities.22. (TCO7) A company issues one hundred shares of no-par common stock with a $10 stated value for $17 per share. The entry to record this issuance includes a: (Points: 5)decrease to paid-in capital in excess of stated value–common for $1,000.increase to paid-in capital in excess of stated value–common for $700.increase to common stock for $1,700.increase to common stock for $700.23. (TCO7) Treasury stock accounts for the difference between: (Points: 5)authorized shares and outstanding shares.issued shares and authorized shares.issued shares and preferred shares.outstanding shares and issued shares.24. (TCO2) Consider the following transactions:Borrowed cash on a note payable, $80,000Provided services on account, $10,000III. Received cash from a customer as payment on account, $8,000IV. Received a utility bill, $1,200Total liabilities would be:(Points: 5)$1,200$81,200$98,000$80,000
