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Submitted by KnowledgeCats on Fri, 2014-04-11 23:00
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Accounting -Corporation MCQs Assignment

Corporations

Questions 1 to 20: Select the best answer to each question. Note that a question and its answers may be split across a page

break, so be sure that you have seen the entire question and all the answers before choosing an answer.

1. The accuracy of the statement of cash flows can be verified by computing the change in the balance of

the

A. asset and liability accounts.

B. revenue accounts.

C. cash and cash equivalent accounts.

D. equity account.



2. For vertical analysis purposes, the base item on the income statement is

A. net income.

B. net sales.

C. gross profit.

D. total expenses.

3. Cost of goods sold for the year was $850,000. Inventory was $60,000 at the beginning of the year and $90,000 at the end of the year. There were no changes in the amount in accounts payable for the year.

Cash payment for merchandise to be reported under the direct method is

A. $880,000.

B. $940,000.

C. $850,000.

D. $910,000.

4. Patty's Baker has cost of goods sold for the years 2011, 2010, and 2009, respectively, of $28,600, $26,900, and $25,600. If 2009 is the base year, the trend percentage for 2011 is

A. 111.72%.

B. 5.08%.

C. 11.72%.

D. 105.08%.



5. The Amanda Corporation Stockholders' Equity section includes the following information:

Preferred Stock $12,000

Paid-in Capital in Excess of Par— Preferred 2,700

Common Stock 15,000

Paid-in Capital in Excess of Par— Common 4,100

Retained Earnings 8,200

A. $20,200

B. $14,700

C. $12,000

D. $16,100

6. Rick Company's net sales decreased from $90,000 in year 1 to $45,000 in year 2, and its cost of goods sold decreased from $30,000 in year 1 to $20,000 in year 2. Vertical analysis based on sales would show which decreases in cost of goods sold for the two periods (rounded to the nearest tenth of a percent)?

A. 33.3% and 44.4%

B. 225% and 300%

C. 300% and 225%

D. 44.4% and 33.3%



7. Birch issued 200 shares of $12 par common stock in exchange for a piece of equipment with a current

market value of $3,000. Which of the following is not part of the journal entry for this transaction?

A. Crediting Paid-in Capital in Excess of Par—Common for $600

B. Debiting Equipment for $3,000

C. Crediting Common Stock for $3,000

D. Crediting Common Stock for $2,400

8. The records of Ashley Boutique showed a net loss of $30,000; depreciation expense of $25,000; and an increase in supplies on hand of $5,000. The amount of net cash flow from operating activities using theindirect method is

A. $15,000.

B. $20,000.

C. ($15,000).

D. ($10,000).

9. Rick Company has declared a $40,000 cash dividend to shareholders. The company has 5,000 shares of $20 par, 6% preferred stock, and 10,000 shares of $15 par common stock. The preferred stock is noncumulative. How much will be distributed to the preferred and common stockholders on the date of payment?

A. $0 preferred; $40,000 common

B. $34,000 preferred; $6,000 common

C. $6,000 preferred; $34,000 common

D. $40,000 preferred; $0 common

10. Operating expenses—other than depreciation—for the year were $335,000. Prepaid expenses decreased by $7,000. Cash payments for operating expenses to be reported on the cash flow statementusing the direct method would be

A. $342,000.

B. $328,000.

C. $7,000.

D. $335,000.

11. Tammy Corporation has 350,000 shares of $3 par common stock outstanding. It has declared a 5% stock dividend. The current market price of the common stock is $7.50/share. The amount that will be credited to common stock on the date of declaration is

A. $131,250.

B. $183,750.

C. $52,500.

D. $78,750.

12. If you own 500 shares (2% of a corporation's stock) and the corporation issues 15,000 new shares, how many of the new shares can you purchase under preemptive right?

A. 300

B. 0

C. 800

D. 500

13. Casey Company has an accounts receivable turnover of 36 days, an inventory turnover of 77 days, and an accounts payable turnover of 40 days. Casey's cash conversion cycle is _______ day(s).

A. 1

B. 73

C. 81

D. 153



14. The Isaiah Corporation Stockholders' Equity section includes the following information:

Total par value of the preferred and common stock is

Preferred Stock $22,000

Paid-in Capital in Excess of Par—Preferred 2,980

Common Stock 48,000

Paid-in Capital in Excess of Par—Common 3,400

Retained Earnings 7,350

Total par value of the preferred and common stock is  (Verify this)

A. $77,350.

B. $70,000.

C. $76,380.

D. $83,730.



15. Casey Company reported net income of $35,000; depreciation expenses of $20,000; an increase in accounts payable of $2,000; and an increase in current notes receivable of $3,000. Net cash flows from operating activities under the indirect method is operating activities under the indirect method is

A. $54,000.

B. $56,000.

C. $50,000.

D. $55,000.

16. Brandon Company had extraordinary losses of $150,000. If its corporate tax rate is 30%, at which amount will the losses be shown on the income statement?

A. $45,000

B. $105,000

C. Not enough information is given to answer the question.

D. $150,000

17. What is Jane's rate of return on total assets if average total assets are $100,000; net income is $2,000; interest expense if $1,600; and income tax is $2,000?

A. 5.6%

B. 3.6%

C. 5.2%

D. 4.6%

18. If Rick's net sales increased from $40,000 to $80,000 and its operating expenses increased from $30,000 to $50,000, then vertical analysis based on net sales would show which of the following for operating expenses for the two periods (to the nearest tenth of a percent)?

A. 62.5% and 75.0%

B. 75.0% and 62.5%

C. 133.3% and 160.0%

D. 160.0% and 133.3%

19. If current assets were $100,000 in 2009 and $88,000 in 2010, what was the amount of increase or decrease in percentage terms from 2009 to 2010? (Round to the nearest percent.)

A. Decrease of 14%

B. Decrease of 12%

C. Increase of 12%

D. Increase of 14%



20. To determine why net income and cash on the balance sheet don't equal, an accountant can prepare

a/an

A. income statement.

B. statement of cash flows.

C. statement of retained earnings.

D. balance sheet.

 

Answer
Submitted by KnowledgeCats on Fri, 2014-04-11 23:04
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Accounting -Corporation MCQs Assignment

body preview (851 words)

Questions x xx 20:xxxxxx xxx best answer xx each question. xxxx xxxx a xxxxxxxx and its answers xxx xx split across a page

break, so xx sure that you have xxxx the xxxxxxxxxxxxxx xxx xxxthe answers before choosing an answer.

 

xxxxx xxxxxxxx of the statement xx cash xxxxx can xx xxxxxxxx xx computing the xxxxxx xx the xxxxxxx of

xxx

A.asset and xxxxxxxxx accounts.

xxrevenue accounts.

xxcash and cash xxxxxxxxxx accounts.

D.equity account.

xx

xx

2.xxx vertical xxxxxxxx purposes, xxx xxxx item xx xxx income xxxxxxxxx xx

A.net xxxxxxx

B.xxx xxxxxx

xxxxxxx xxxxxxx

xxtotal xxxxxxxxx

 

xxCost of xxxxx xxxx xxx the year xxx $850,000. xxxxxxxxx xxx $60,000 xx the beginning of the xxxx xxx xxxxxxx at xxx xxx xx the xxxxx xxxxx xxxx no changes in xxx amount xx accounts payable xxx the xxxxx

Cash payment xxx merchandise xx xx xxxxxxxx under xxx direct xxxxxx xx

A.xxxxxxxxx

B.$940,000.

xxxxxxxxxxx

D.xxxxxxxxx

 

4.xxxxxxx xxxxx xxx cost of xxxxx sold xxx xxx years xxxxx

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Answer
Submitted by KnowledgeCats on Fri, 2014-04-11 23:02
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Accounting -Corporation MCQs Assignment

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