Penn Foster exam 061691 accounting Questions 1 to 20: 1. Using a 360-day year, the maturity value of a 69-day note for $1,500 at 7% annual interest is (rounded to the nearest cent) A. $1,520.13. B. $20.13. C. $1,605.00. D. $1,584,88. 2. Which of the following would not be considered a contingent liability? A. Mortgage payable B. Potential fines from the EPA C. Pending legal action D. Cosigning a loan 3. Amanda Industries had total assets of $600,000; total liabilities of $175,000; and total stockholders' equity of $425,000. Amanda Industries' debt ratio is A. 41.2%. B. 17.1%. C. 29.2%. D. 70.8%. 4. A warranty is an example of a/an _______ liability. A. estimated B. settled C. known D. contingent 5. Which of the following would be considered a cash equivalent? (# A. Time deposits B. Money orders C. Currency# D. Checks 6. A truck costing $56,000 has accumulated depreciation of $50,000. The truck is scrapped for $500. The journal entry to record this transaction is (#11 A. debit Cash for $500, debit Accumulated Depreciation - Truck for $50,000, debit Loss on Disposal for $5,500, and credit Truck for $56,000. B. debit Loss on Disposal $6,000, debit Accumulated Depreciation - Truck for $50,000, and credit Truck for $56,000. C. debit Cash for $500, debit Truck for $50,000, debit Loss on Disposal for $5,500, and credit Accumulated Depreciation - Truck for $56,000. D. debit Cash for $500, debit Loss on Disposal for $55,500, and credit Truck for $56,000. 7. Nick Company has cash of $33,000; net accounts receivable of $41,000; short-term investments of $15,000; and inventory of $25,000. It also has $30,000 in current liabilities and $50,000 in long-term liabilities. The quick ratio for Nick Company is A. 2.97. B. 3.80. C. 1.78. D. 3.30. 8. Ryan Corporation made a basket purchase of three items. Item A was appraised at $35,000; item B was appraised at $55,000; and item C was appraised at $60,000. The purchase price was $125,000. The amount at which item B should be recorded is A. ($55,000/$95,000) Ã— $150,000. B. ($55,000/$95,000) Ã— $125,000. C. ($55,000/$150,000) Ã— $125,000. D. ($55,000/$125,000) Ã— $150,000. 9. Meranda Corporation purchases a machine for $125,000. It has an estimated salvage value of $10,000 and is expected to produce 50,000 units in its lifetime. During the first year of operation, it produced 14,500 units. To the nearest dollar, the depreciation for the first year under the units of production method will be A. $35,500. B. $31,250. C. $36,250. D. $33,350. 10. Tammy Industries inadvertently debited $5,000 betterment as an ordinary expense. Which of the following will occur as a result of this mistake? A. Retained earnings will be overstated by $5,000. B. The asset will be understated by $5,000. C. Net income will be overstated by $5,000. D. The asset will be overstated by $5,000. 11. Research and development costs (R&D) are generally A. listed as "long-term assets" on the balance sheet. B. listed as "current assets" on the balance sheet.C. listed as "other intangibles" on the balance sheet. D. expensed and become part of the income statement. 12. Which of the following would indicate poor internal control over accounts receivable? A. The person handling cash receipts passes the receipts to someone who enters them into accounts receivable. B. The mailroom employees open the mail and give the cash receipts to another employee. C. The person who handles accounts receivable wouldn't write off accounts as uncollectable. D. The same person handling cash receipts also records the accounts receivable transactions. 13. Casey Company's bank statement shows a bank balance of $43,267. The statement shows a bank service charge of $50. Casey's book balance shows outstanding checks of $5,288 and deposits in transit of $9,325. The bank-side reconciliation would show cash of A. $39,230. B. $47,304. C. $43,217. D. $43,267. 14. Casey Company's bank statement shows a bank balance of $43,267. The statement shows a bank service charge of $50 and a bank collection of $760 in Casey Company's behalf. Casey's book balance should be adjusted by a total of A. +$710. B. â€“$710. C. +$760. D. +$810. 15. Mackey Company has a five-year mortgage for $100,000. In the first year of the mortgage, Mackey will report this liability as a A. current liability of $80,000 and a long-term liability of $20,000. B. long-term liability of $100,000. C. current liability of $20,000 and a long-term liability of $80,000. D. current liability of $100,000. 16. Which of the following marketable securities are reported at market value on the balance sheet date? A. Trading securities B. Available-for-sale securities C. Held-to-maturities securities D. Available-for-sale and trading securities 17. A company purchased furniture on January 1, 2012. Its cost was $15,600, and it had a residual value of $1,600. Its useful life is determined to be three years. Using double-declining balance depreciation, he depreciation for 2012 to the nearest dollar will be A. $4,667. B. $5,200. C. $10,400.End of exam D. $9,333. 18. Brandon Company completed an aging of its accounts receivable and came up with an estimated amount of $6,342. The credit sales for the period are $85,000. The balance in the allowance for doubtful accounts is a debit of $817. If Brandon uses 5% of credit sales as its estimating uncollectable accounts, how much will the credit be to the allowance for doubtful accounts if Brandon uses the estimate of aging receivables as its method of estimating uncollectable accounts? ( A. $5,525 B. $7,159 C. $4,250 D. $5,067 19. Using a 365-day year, the maturity value of a 180-day note for $2,700 at 9% annual interest is (rounded to the nearest cent) A. $2,821.50. B. $2,943.00. C. $2,819.84. D. $119.84. 20. A patent has amortization this year of $2,300. The journal entry would be ( A. debit Amortization Expense - Patent, $2,300; credit Patent, $2,300. B. debit Accumulated Amortization - Patent, $2,300; credit Amortization Expense - Patent, $2,300. C. debit Accumulated Amortization - Patent, $2,300; credit Patent, $2,300. D. debit Amortization Expense - Patent, $2,300; credit Accumulated Depreciation - Patent, $2,300.