Question 37 of 100

1.0 Points

What is the process of agreeing the account balance from the general ledger accounts to the corresponding subsidiary ledger balances, investigating differences, and posting the necessary adjustments to bring the balances into agreement?

[removed] A. Final review

[removed] B. Balance sheet reconciliation

[removed] C. Segregation of duties

[removed] D. Preparing financial statements

Question 51 of 100

1.0 Points

In choosing a depreciation method for financial reporting (U.S. GAAP) purposes, the company’s goal is

[removed] A. High income
[removed] B. Low income
[removed] C. High taxable income
[removed] D. Low taxable income

Question 53 of 100

1.0 Points

Which of the following account is not a contra revenue account?

[removed] A. Sales returns
[removed] B. Sales discounts
[removed] C. Trade discounts
[removed] D. Sales allowance

Question 54 of 100

1.0 Points

Which of the following expenditures are expensed after “first use?”

[removed] A. Additions
[removed] B. Improvements
[removed] C. Repairs & maintenance
[removed] D. Purchase price

Question 55 of 100

1.0 Points

What is the journal entry to transfer raw materials to production?

[removed] A. DR: Raw Materials Inventory; CR: Finished Goods Inventory
[removed] B. DR: WIP; CR: Raw Materials Inventory
[removed] C. DR: COGS; CR: Finished Goods Inventory
[removed] D. DR: COGS; CR: Cash

Question 56 of 100

1.0 Points

The direct write off method is permitted under U.S. GAAP.

[removed] True

[removed] False

Question 57 of 100

1.0 Points

Which costs are not capitalized in the purchase of an existing building?

[removed] A. Purchase price of the building
[removed] B. Real estate commissions
[removed] C. Architect fees
[removed] D. Legal fees

Question 58 of 100

1.0 Points

Which cost flow assumption provides for the last costs inventoried are the first costs transferred to Cost of Goods Sold.

[removed] A. Specific identification method
[removed] B. First In, First Out (FIFO)
[removed] C. Last In, First Out (LIFO)
[removed] D. Weighted average cost

Question 59 of 100

1.0 Points

Which cost flow assumption provides for the first costs inventoried are the first costs transferred to Cost of Goods Sold.

[removed] A. Specific identification method
[removed] B. First In, First Out (FIFO)
[removed] C. Last In, First Out (LIFO)
[removed] D. Weighted average cost

Question 60 of 100

1.0 Points

Discount terms such as “Net 30” (n/30) mean

[removed] A. Payment is due after 30 days
[removed] B. Total after discounts, payment is due within 30 days
[removed] C. Thirty days
[removed] D. $30 will be discounted

Question 61 of 100

1.0 Points

In a PP&E disposition made through a sale, a gain results. In the journal entry, the cash and accumulated depreciation accounts are debited, the equipment account is credited, and the remaining amount of the journal entry is

[removed] A. DR: Loss
[removed] B. CR: Loss
[removed] C. DR: Gain
[removed] D. CR: Gain

Question 62 of 100

1.0 Points

What is the journal entry to record the full collection of cash related to principal on a note receivable?

[removed] A. DR: Cash; CR: Notes Receivable
[removed] B. DR: Notes Receivable; CR: Cash
[removed] C. DR: A/R; CR: Notes Receivable
[removed] D. DR: Notes Receivable; CR: Revenue

Question 63 of 100

1.0 Points

The formula for depreciation rate is

[removed] A. (1 ÷ Useful Life) X Book Value
[removed] B. # Mos in Service ÷ 12
[removed] C. 1 X Useful life
[removed] D. 1 ÷ Useful Life

Question 64 of 100

1.0 Points

Disposals of PP&E made through a sale result in

[removed] A. a gain
[removed] B. a loss
[removed] C. either a gain or loss
[removed] D. a gain and a loss

Question 65 of 100

1.0 Points

What is the journal entry to write off a receivable that will never be collected?

[removed] A. DR: Allowance for Doubtful Accounts; CR: A/R
[removed] B. DR: Bad Debt Expense; CR: Allowance for Doubtful Accounts
[removed] C. DR: Allowance for Doubtful Accounts; CR: Bad Debt Expense
[removed] D. DR: A/R; CR: Bad Debt Expense

Question 66 of 100

1.0 Points

In determining the costs to capitalize land, materials that are salvaged and sold for cash reduce the cost of the land.

[removed] True

[removed] False

Question 67 of 100

1.0 Points

Materiality defines the threshold or cutoff point after which financial information becomes relevant to the decision making needs of the users.

[removed] True

[removed] False

Question 68 of 100

1.0 Points

Which of the following is a writing that requires a party to repay borrowed funds?

[removed] A. Bond
[removed] B. Promissory note
[removed] C. Credit line
[removed] D. Venture capital funding

Question 69 of 100

1.0 Points

Under U.S. GAAP, which depreciation method would produce the same depreciation expense each year?

[removed] A. Straight-line
[removed] B. Double-Declining-Balance
[removed] C. Activity-Based
[removed] D. MACRS

Question 70 of 100

1.0 Points

Which of the following intangible assets provides the exclusive right of protection given to the creator of a published work?

[removed] A. Patent
[removed] B. Trademark
[removed] C. Copyright
[removed] D. Goodwill

Question 71 of 100

1.0 Points

If a company issues 1,000 shares of $1 par value common stock for $20 per share, what would be the effect on the accounting equation?

[removed] A. Increase assets and increase liabilities.
[removed] B. Increase assets and increase revenue.
[removed] C. Increase assets and increase stockholders’ equity.
[removed] D. Increase assets and decrease stockholders’ equity.

Question 72 of 100

1.0 Points

The debt to equity ratio measures a company’s risk and is calculated as total liabilities divided by stockholders’ equity.

[removed] True

[removed] False

Question 73 of 100

1.0 Points

What would be the impact on the accounting equation when a company purchases treasury stock?

[removed] A. Increase assets and increase stockholders’ equity.
[removed] B. Decrease assets and increase stockholders’ equity.
[removed] C. Decrease assets and decrease stockholders’ equity.
[removed] D. No effect on the accounting equation.

Question 74 of 100

1.0 Points

For a bond issue that sells for less than the bond face amount, the stated interest rate is:

[removed] A. The actual yield rate.
[removed] B. The prime rate.
[removed] C. More than the market rate.
[removed] D. Less than the market rate.

Question 75 of 100

1.0 Points

When a seller sells goods with a warranty,

[removed] A. The entire liability for the warranty should be disclosed
[removed] B. The entire liability for the warranty should be accrued in the year of the sale to “match” the cost with the related revenue.
[removed] C. The entire liability for the warranty should be reversed
[removed] D. The entire liability for the warranty should be accrued in the final year of the warranty.

Question 76 of 100

1.0 Points

Which of the following is not an employee withholding?

[removed] A. Employee Federal and state income taxes
[removed] B. Social Security and Medicare
[removed] C. Federal and state unemployment taxes
[removed] D. Employee Healthcare insurance

Question 77 of 100

1.0 Points

We can calculate the issue price of a bond as the face amount plus the total periodic interest payments.

[removed] True

[removed] False

Question 78 of 100

1.0 Points

Wright Brothers Aircraft Company had 100,000 outstanding shares of common stock. On June 16, 1915, Crossroads repurchased 20,000 shares of its own stock at $30 per share. On July 23, 1915, Crossroads resold 10,000 shares at $28 per share. What net effect did the repurchase and the resell of common stock have on the accounting equation?

[removed] A. Increase in assets and decrease in stockholders’ equity.
[removed] B. Decrease in assets and increase in stockholders’ equity.
[removed] C. Increase in assets and increase in stockholders’ equity.
[removed] D. Decrease in assets and decrease in stockholders’ equity.

Question 79 of 100

1.0 Points

Which of the following is an agreement with a third party lender (not a bank) that provides a borrower with a fixed amount of principal at a specified interest rate with select maturities of 30-270 days?

[removed] A. Commercial Paper
[removed] B. Letter of Credit
[removed] C. Line of Credit
[removed] D. Subordinated Notes

Question 80 of 100

1.0 Points

The short-term classification of assets and liabilities on the balance sheet is

[removed] A. less than 12 months
[removed] B. less than or equal to 12 months
[removed] C. greater than 12 months
[removed] D. less than or equal to 3 months

Question 81 of 100

1.0 Points

When a company issues 25,000 shares of $1 par value common stock for $10 per share, the journal entry for this issuance would include:

[removed] A. A debit to Cash for $25,000.
[removed] B. A debit to Additional Paid-in Capital for $25,000.
[removed] C. A credit to Common Stock for $250,000.
[removed] D. A credit to Additional Paid-in Capital for $225,000.

Question 82 of 100

1.0 Points

We record treasury stock at the cost of the shares reacquired.

[removed] True

[removed] False

Question 83 of 100

1.0 Points

A bond issue with a face amount of $500,000 bears interest at the rate of 7%. The current market rate of interest is 8%. These bonds will sell at a price that is:

[removed] A. Equal to $500,000.
[removed] B. More than $500,000.
[removed] C. Less than $500,000.
[removed] D. The answer cannot be determined from the information provided.

Question 84 of 100

0.0 Points

All publicly held corporations in the United States are regulated by the Securities and Exchange Commission.

[removed] True

[removed] False

Question 85 of 100

1.0 Points

Total assets, total liabilities, and total stockholders’ equity do not change as a result of a stock dividend.

[removed] True

[removed] False

Question 86 of 100

1.0 Points

Serial bonds are:

[removed] A. Bonds backed by collateral.
[removed] B. Bonds that mature in installments.
[removed] C. Bonds with greater risk.
[removed] D. Bonds issued below the face amount.

Question 87 of 100

1.0 Points

Ordinarily, the proceeds from the sale of a bond issue will be equal to:

[removed] A. The face amount of the bond.
[removed] B. The total of the face amount plus all interest payments.
[removed] C. The present value of the face amount plus the present value of the stream of interest payments.
[removed] D. The face amount of the bond plus the present value of the stream of interest payments.

Question 88 of 100

1.0 Points

Cortez Inc. issues 100 shares of its $1 par value common stock for $15 per share. The entry to record the issuance will not include a:

[removed] A. Debit to Cash $1,500.
[removed] B. Credit to Additional Paid-In Capital $1,400.
[removed] C. Credit to Common Stock of $100.
[removed] D. All of the other options would be included.

Question 89 of 100

1.0 Points

Term bonds require payments in installments over a series of years.

[removed] True

[removed] False

Question 90 of 100

1.0 Points

Which of the following is true for bonds issued at a discount?

[removed] A. The stated interest rate is greater than the market interest rate.
[removed] B. The market interest rate is greater than the stated interest rate.
[removed] C. The stated interest rate and the market interest rate are equal.
[removed] D. The stated interest rate and the market interest rate are unrelated

Question 91 of 100

1.0 Points

The Statement of Cash Flows:

[removed] A. Lists all cash flows over the life of a company.
[removed] B. Breaks down all cash transactions into investing and financing cash flows.
[removed] C. Shows that the change in total cash from one year to the next is equal to the net operating, investing, and financing cash flows
[removed] D. Has two methods for investing cash flows – direct and indirect.

Question 92 of 100

1.0 Points

The purchase of land is classified in the statement of cash flows as a(n):

[removed] A. Operating activity.
[removed] B. Investing activity.
[removed] C. Financing activity.
[removed] D. Noncash activity.
Question 93 of 100	1.0 Points

Investing activities include cash transactions involving the purchase and sale of long-term assets and current investments.

[removed] True

[removed] False

Question 94 of 100

1.0 Points

During the year, Next Tec Corp. had the following cash flows: receipt from customers, $10,000; receipt from the bank for long-term borrowing, $6,000; payment to suppliers, $5,000; payment of dividends, $1,000, payment to workers, $2,000; and payment for machinery, $8,000. What amount would be reported for financing cash flows on the Statement of Cash Flows?

[removed] A. $5,000.
[removed] B. $2,000.
[removed] C. $6,000.
[removed] D. ($8,000).

Question 95 of 100

1.0 Points

Which of the following is not true regarding cash flows?

[removed] A. Operating activities include the payment of dividends.
[removed] B. Investing activities involve long-term investments.
[removed] C. Financing activities involve long-term liabilities and equities.
[removed] D. Purchasing a building with a note is considered a noncash activity.

Question 96 of 100

1.0 Points

In the operating activities section of the statement of cash flows, we start with net income when using:

[removed] A. The direct method.
[removed] B. The indirect method.
[removed] C. Both the direct and the indirect method.
[removed] D. Neither the direct nor the indirect method.

Question 97 of 100

1.0 Points

The sale of land is reported in the operating section of the statement of cash flows.

[removed] True

[removed] False

Question 98 of 100

1.0 Points

Financing activities include cash receipts and cash payments for transactions relating to revenue and expense activities.

[removed] True

[removed] False

Question 99 of 100

1.0 Points

_________ is an investing cash flow and ________ is a financing cash flow, as reported on the Statement of Cash Flows.

[removed] A. Issuing bonds; selling investments.
[removed] B. Purchasing land; repaying a bank loan.
[removed] C. Receiving cash from the sale of inventory; paying cash dividends.
[removed] D. Purchasing treasury stock; lending cash to an employee.

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