1)In a Financing Lease the Lessee records an Asset and a Liability A)FalseB) True 2)The balance sheet of ABC reports total assets of $1,500,000 and

$20,000

32) Given the information in the above table, what is the company's gross profit?

A) $100,000.                    B) $50,000.                     C) $170,000.                   D) $280,000.

33) THIS year a company made an error in its ending inventory

A) Neither this year's Balance Sheet nor Income Statement will be wrong

B) This year's Balance Sheet will be correct but the Income Statement will be wrong

C) This year's Balance Sheet will be wrong but the Income Statement will be correct

D) Both this year's Balance Sheet and Income Statement will be wrong

34) Which of the following are made BEFORE a Trial Balance is prepared?

A) Closing Entries                        B) Transaction Entries                   C) Adjusting Entries

35) If your employer declares bankruptcy, this can have a major effect on your pension if you are in a

A) Either plan                                                           B) Defined Benefit Plan

C) Neither Plan                                                         D) Defined Contribution Plan

36) Where do we put gains/losses on the sale of Treasury Stock (cost method)?

A) there is no gain or loss on purchase of Treasury Stock

B) Additional Paid in Capital / Retained Earnings

C) Income Statement

D) adjustments to total Equity

37) If you put $200 into a savings account that pays annual compound interest of 8% per year and then withdraw the money two years later, you will earn interest of $32.

A) False                                                                      B) True

38) In the Allowance Method when we we collect on a previously written off receivable

A) Assets stay the same, Net Income stays the same.

B) Assets decrease, Net Income decreases

C) Assets increase, Net Income increases.

D) It depends

39) ABC sold inventory for $1,200 that was purchased for $700. ABC records which of the following when it sells inventory using a periodic inventory system?

A) No entry is required for cost of goods sold and inventory.

B) Debit Inventory $700; credit Cost of Goods Sold $700.

C) Debit Cost of Goods Sold $700; credit Inventory $700.

D) Debit Cost of Goods Sold $1,200; credit Inventory $1,200.

40) Which statement is true

A) In both plans the Employee has all the investment risk

B) In a Defined Benefit Plan the Employer has all the investment risk, in a Defined Contribution Plan the Employee has all the investment risk

C) In a Defined Benefit Plan the Employee has all the investment risk, in a Defined Contribution Plan the Employer has all the investment risk

D) In both plans the Employer has all the investment risk

41) When intangible assets, like franchises or patents, die, it is called

A) Amortization                B) Depletion                    C) Depreciation               D) Impairment

42) Which of the following is true regarding the relationship between the current ratio and the acid-test ratio?

A) The current ratio will always be equal to or larger than the acid-test ratio for a specific company.

B) The acid-test ratio will always be equal to or larger than the current ratio for a specific company.

C) One ratio will always exceed 1.0, while the other will always be less than 1.0.

D) Either the current ratio or the acid-test ratio could be larger for a specific company.

43) The market will generally react to dividends on which day?

A) Declaration Date                      B) Payment Date                           C) Record Date

44) Define Solvency

A) Ability to pay Current Debt

B) Ability to generate free cash flow from operations

C) Ability to pay both Current and Long Term Debt

D) Ability to pay Long Term Debt

45) Which of the following expenses would you find in a factory

A) Electric expense                                                   B) Both

C) Labor expense                                                      D) Neither

46) When treasury stock is resold at a gain, the difference between its cost and the cash received when resold:

A) Increases net income but decreases stockholders' equity.

B) Has no effect on net income or stockholders' equity.

C) Increases net income.

D) Increases stockholders' equity.

47) In accounting, goodwill

A) Is amortized over its useful life.

B) May be recorded whenever a company achieves a level of net income that exceeds the industry average.

C) Must be expensed in the period it is recorded because benefits from goodwill are difficult to identify.

D) May be recorded when a company purchases another business.

48) When a firm gets riskier what will happen to its bonds

A) the market interest rate of the bonds will go up and the price of the bonds will go up

B) there is no definite answer

C) the market interest rate of the bonds will go up and the price of the bonds will go down

D) the market interest rate of the bonds will go down and the price of the bonds will go down

E) the market interest rate of the bonds will go down and the price of the bonds will go up

49) The abbreviation of the rules an accountant has to follow when doing financial statement analysis is:

A) None of these             B) FASB                         C) GAAP                        D) IFRS

50) On February 22, ABC acquired 200 shares of its $5 par value common stock for $25 each. On March 15, the company reissued 70 shares for $30 each. What is true of the entry for reissuing the shares?

A) Credit Cash $1,750.                                             B) Credit Treasury Stock $2,100.

C) Credit Additional Paid in Capital $350.              D) Debit Treasury Stock $1,750.