NEED 15 MULTIPLE CHOICE ACCOUNTING QUESTIONS ANSWERED
LewisHendrix1. Speers Corporation owns 40% of Queens Company, which Speers originally purchased at the beginning of the year for $300,000. Queens earned income for the year of $30,000 and paid dividends of $5,000. Which of the following is the amount of investment income Speers will report for the year?
a. $5,000
b. $30,000
c. $14,000
d. $2,000
e. $12,000
2. Which of the following principles dictates that warranty expense should be recorded in the same period as the sale of the item it covers even though the expense must be estimated?
a. Matching
b. Conservatism
c. Revenue recognition
d. Consistency
e. None of the above
3. Rollins Corporation has the following assets and liabilities:
Cash |
$4,000 |
Accounts Receivable |
5,000 |
Investment in Trading Securities |
8,000 |
Equipment |
7,000 |
Salaries Payable |
2,000 |
Interest Payable |
1,000 |
Unearned Revenue |
3,000 |
Bonds Payable |
9,000 |
Which of the following is Rollin's current ratio?
a. 1.60 to 1
b. 4.00 to 1
c. 1.13 to 1
d. 2.83 to 1
e. 1.33 to 1
4. Which of the following is true about an available-for-sale security?
a. It is expected to be held for a short-time.
b. Unrealized gains/losses are reported on the income statement.
c. It is accounted for exactly like a trading security.
d. It is reported at fair value.
e. All of the above
5. Grady Company purchases 400 shares of Train Company for $4 each on May 1, 20X6. This qualifies as a trading security. On December 31, 20X6, Train is selling for $5 per share. Which of the following is the unrealized gain or loss Grady will report?
a. $500 loss
b. $2,000 gain
c. $100 loss
d. $400 gain
e. $100 gain
6. Patterson Corporation began the year with assets of $7,000 and ended the year with assets of $9,000. During the year, Patterson earned revenues of $7,680, and incurred expenses of $5,680. Which of the following is Patterson's total asset turnover for the year?
a. .96 times
b. 1.04 times
c. .63 times
d. 1.10 times
e. .85 times
7. Tyler Company purchases 400 shares of West Company for $7 each on September 1, 20X6. This qualifies as an available-for-sale security. On December 31, 20X6, West is selling for $5 per share. At what amount will the investment in West be reported on Tyler's 12/31/X6 balance sheet?
a. $400
b. $2,800
c. $2,000
d. $800
e. $500
8. A parent must own which of the following percentages of a subsidiary's stock in order to present consolidated financial statements?
a. 100%
b. more than 75%
c. more than 50%
d. more than 20%
e. There is no minimum.
9. Which of the following is true about an equity method security?
a. It is expected to be held for a short-time.
b. Dividends are not allowed to be paid on equity method investments.
c. It is accounted for exactly like a trading security.
d. It is reported at fair value.
e. None of the above is true.
10. Which of the following is typically classified as a noncurrent liability?
a. Bonds payable
b. Accounts payable
c. Interest payable
d. Rent payable
e. Salaries payable
11. Which of the following is a reason that a trading security is shown at its fair value?
a. Fair value is easily determined
b. A buyer does not have to be found
c. It is a short-term investment
d. Both a and b
e. All of the above
12. Tydings Corporation is being sued by a former employee. Tydings' lawyer believes that the chance of loss is remote. Which of the following describes how Tydings should report this contingent loss?
a. The loss should not be reported.
b. The loss should be disclosed in the notes to the financial statements.
c. The loss should be reported in the financial statements.
d. Both a and b.
e. Both b and c.
13. Pushkin Corporation sells toasters with an embedded warranty. During 20X1, Pushkin sold toasters and correctly recorded $4,000 in warranty expense. During 20X2, Pushkin spent $3,000 repairing toasters. At the end of 20X2, Pushkin determines that the warranty payable account should have a final balance of $1,200. What change should be made to warranty expense?
a. Debit of $100
b. Debit of $200
c. Credit of $400
d. Credit of $200
e. Debit of $500
14. Robin Corporation begins the period with a balance in unearned revenue of $300,000 related to unredeemed gift cards. During the period, $800,000 in gift cards are sold and $600,000 worth of gift cards are redeemed. Another $50,000 in gift cards expired during the period and were transferred to revenue. At the end of the period, what is the balance in unearned revenue relating to unredeemed gift cards?
a. $450,000
b. $500,000
c. $800,000
d. $1,100,000
e. $1,050,000
15. Which of the following is typically classified as current liability?
a. Long-term leases
b. Deferred income taxes
c. Bonds payable
d. Notes payable
e. Unearned revenue