Quiz
SBS MBA - Accounting Skills 505
Fragen in diesem Quiz (48)
1If the indirect approach for the statement of cash flows is presented, which of the following items should be subtracted from accrual basis net income to derive cash flow from operating activities?
- AGains on the sale of long-term investments
- BLosses on the sale of long-term investments
- CDepreciation expense
- DAmortisation expense
2For purposes of calculating cash receipts from customers, which of the following adjustments should be made to convert accrual basis sales to cash basis sales?
- AAdd an increase in accounts receivable to accrual basis sales
- BSubtract an increase in accounts receivable from accrual basis sales
- CAdd cash in bank to accrual basis sales
- DAdd the change in cash to the accrual basis sales
3In preparing the statement of cash flows, how should non-cash investing/financing activities be reported?
- ANot be reported
- BBe reported in a separate schedule accompanying the statement of cash flows
- CBe reported in the investing activities section of the statement of cash flows
- DBe reported in the financing activities section of the statement of cash flows
4On a statement of cash flows, which of the following types of activities would not be disclosed in a separate section?
- AOperating activities
- BInvesting activities
- CFinancing activities
- DContractual activities
5Which of the following activities would generally be regarded as a financing activity in preparing a statement of cash flows?
- ADividend distribution
- BProceeds from the sale of stocks of other firms
- CLoans made by the entity to other businesses
- DEmployees' salaries and wages paid
6Ames Corporation's net accounts receivable were $750,000 on December 31, 20X1, and $1,250,000 on December 31, 20X2. Net cash sales for 20X2 were $3,300,000. The accounts receivable turnover ratio for 20X2 was 16. What were the total net sales for 20X2?
- A$12,800,000
- B$16,000,000
- C$16,100,000
- D$19,300,000
7Thompson Corporation wrote off a $200 uncollectible account receivable against the $2,400 balance in its Allowance for Bad Debts account. Compare the current ratio before the write-off (X) with the current ratio after the write-off (Y).
- AX greater than Y
- BX equals Y
- CX less than Y
- DCannot be determined
8Zhang Corporation had net income of $100,000 paid income taxes of $30,000, and had interest expense of $8,000. What was Zhang's times interest earned ratio?
- A12.5
- B16.25
- C17.25
- D17.85
9Financial statement ratio analysis may be undertaken to study liquidity, turnover, profitability, and other indicators. To which does the current ratio most relate?
- ALiquidity
- BTurnover
- CProfitability
- DOther indicator
10Gerber Department Store utilises the retail inventory method. Gerber's beginning inventory cost $140,000 and retailed for $280,000. Purchases for the period amounted to $390,000 and were priced to sell at twice that amount. Sales for the period, all at normal retail, were $600,000. How much is the cost of Gerber's estimated ending inventory?
- A$115,000
- B$150,000
- C$230,000
- D$300,000
11Wonder Corporation failed to record the purchase of merchandise on account. The merchandise and related accounts payable should have been recorded but were not. What is the effect of these errors on assets, liabilities, retained earnings, and net income, respectively?
- AUnderstated, understated, no effect, no effect
- BUnderstated, understated, understated, understated
- CUnderstated, overstated, overstated, understated
- DOverstated, overstated, understated, overstated
12An inventory pricing procedure in which the oldest costs incurred rarely have an effect on the ending inventory valuation is:
- AFIFO
- BLIFO
- CRetail
- DWeighted-average
13Which of the following inventory methods will always produce the same results under both a periodic and perpetual system?
- AFIFO
- BLIFO
- CAverage
- DAll of these
14Ritz Company agreed to purchase certain inventory items from Hostess Corporation. Hostess shipped the goods F.O.B. destination. On December 31, Ritz's accounting year-end, Ritz was aware that the goods had been shipped and would be received any day.
- ARitz should include the goods in its inventory calculated on December 31
- BRitz should include the goods in its inventory calculated on December 31, but should not record the obligation to pay for them
- CRitz should not include the goods in its inventory calculated on December 31, but should include the related payable on its balance sheet at December 31
- DRitz should not include the goods in its inventory calculated on December 31, and should not include the related payable on its balance sheet at December 31
15Inventory accounts should be classified in which section of a balance sheet?
- ACurrent assets
- BInvestments
- CProperty, plant and equipment
- DIntangible assets
16Under the income statement approach to adjusting entries, the receipt of $5,000 of unearned revenue would be recorded by debiting Cash. What account should be credited?
- ACash
- BRevenue
- CUnearned revenue
- DPrepaid revenue
17At the end of the current accounting period, Johnson Company failed to record utilities consumed during the period. Johnson will be billed for the utilities during the next accounting period. As a result, current period assets, liabilities, equity, and income, respectively, are:
- AOverstated, overstated, correct, correct
- BCorrect, understated, overstated, overstated
- COverstated, understated, overstated, overstated
- DOverstated, understated, correct, correct
18The appropriate journal entry to record equipment depreciation expense would consist of a debit to Depreciation Expense and a credit to which of the following accounts?
- AEquipment
- BAccumulated Depreciation: Equipment
- CRetained Earnings
- DCash
19Adjusting entries at the end of an accounting period would not be required for which of the following?
- AMultiperiod costs that must be split among two or more accounting periods
- BMultiperiod revenues that must be split among two or more accounting periods
- CExpenses that have been incurred in a given period but not as yet recorded in the accounts
- DRevenue that has been earned and recording in the accounting records
20For purposes of measuring business income, the life of a business is:
- Adivided into specific points in time
- Bdivided into irregular cycles
- Cdivided into discrete accounting periods
- Dconsidered to be a continuous cycle
21Which of the following errors will be disclosed in the preparation of a trial balance?
- ARecording transactions in the wrong account
- BDuplication of a transaction in the accounting records
- CPosting only the debit portion of a particular journal entry
- DRecording the wrong amount for a transaction to both the account debited and the account credited
22The trial balance:
- Ais a formal financial statement
- Bis used to prove that there are no errors in the journal or ledger
- Cprovides a listing of every account in the chart of accounts
- Dprovides a listing of the balance of each account in active use
23Failure to record the receipt of a utility bill for services already received will result in:
- Aan overstatement of assets
- Ban overstatement of liabilities
- Can overstatement of equity
- Dan understatement of assests
24The following comments each relate to the recording of journal entries. Which statement is true?
- AFor any given journal entry, debits must exceed credits.
- BIt is customary to record credits on the left and debits on the right.
- CThe chart of accounts reveals the amount to debit and credit to the affected accounts.
- DJournalization is the process of converting transactions and events into debit/credit format.
25The following comments all relate to the recording process. Which of these statements is correct?
- AThe general ledger is a chronological record of transactions.
- BThe general ledger is posted from transactions recorded in the general journal.
- CThe trial balance provides the primary source document for recording transactions into the general journal.
- DTransposition is the transfer of information from the general journal to the general ledger.
26The basic sequence in the accounting process can best be described as:
- ATransaction, journal entry, source document, ledger account, trial balance.
- BSource document, transaction, ledger account, journal entry, trial balance.
- CTransaction, source document, journal entry, trial balance, ledger account.
- DTransaction, source document, journal entry, ledger account, trial balance.
27Of the following account types, which would be increased by a debit?
- ALiabilities and expenses
- BAssets and equity
- CAssets and expenses
- DEquity and revenues
28Gerald has beginning total stockholder's equity of $160,000. During the year total assets increased by $240,000 and total liabilities increased by $120,000. Gerald's net income was $180,000. No additional investments were made; however, dividends did occur during the year. How much were the dividends?
- A$20,000
- B$60,000
- C$140,000
- D$220,000
29Which of the following would not be included on a balance sheet?
- AAccounts receivable
- BAccounts payable
- CSales
- DCash
30Retained earning will change over time because of several factors. Which of the following factors would explain an increase in retained earnings?
- ANet loss
- BNet income
- CDividends
- DInvestments by stockholders
31Which of these items would be accounted for as an expense?
- ARepayment of a bank loan
- BDividends to stockholders
- CThe purchase of land
- DPayment of the current period's rent
32The accounting profession can be divided into three major categories; specifically, the practice of public accounting, private accounting, and governmental accounting. A somewhat unique and important service of public accounting is:
- AFinancial accounting
- BManagerial accounting
- CAuditing
- DCost accounting
33The primary private sector agency that oversees external financial reporting standards is the:
- AFinancial Accounting Standards Board
- BFederal Bureau of Investigation
- CGeneral Accounting Office
- DInternal Revenue Service
34Which of the following equations properly represents a derivation of the fundamental accounting equation?
- AAssets + Liabilities = Owner's equity
- BAssets = owner's equity
- CCash = assets
- DAssets - Liabilities = Owner's Equity
35Wilson Company owns land that cost $100,000. If a "quick sale" of the land was necessary to generate cash, the company feels it would receive only $80,000. The company continues to report the asset on the balance sheet at $100,000. This is justified under which of the following concepts?
- AThe historical-cost principle
- BThe value is tied to objective and verifiable past transactions
- CNeither of the above
- DBoth 'a' and 'b'
36The proper journal entry to record Ransom Company's billing of clients for $500 of services rendered is:
- ACash 500
Accounts Receivable 500 - BAccounts Receivable 500
Capital Stock 500 - CAccounts Receivable 500
Service Revenue 500 - DCash 500
Service Revenue 500
- ACash 500
37The proper journal entry to record $1000 of Dividends paid by Myer's Corporation is:
- ADividends 1000
Cash 1000 - BAccounts Payable 1000
Cash 1000 - CDividends Expense 1000
Cash 1000 - DDividends Expense 1000
Service Revenue 1000
- ADividends 1000
38Lynn Lipincott invested land valued at $5000 in her business. This transaction would be recorded by:
- ACash 5000
Capital Stock 5000 - BLand 5000
Capital Stock 5000 - CLand 5000
Service Revenue 5000 - DCapital Stock 5000
Land 5000
- ACash 5000
39Blankenship Company pays its employees every Friday for work rendered that week. The payroll is typically $10,000 per week. Which of the following journal entries would Blankenship ordinarily record on the Friday payday?
- ASalary Expense 10,000
Salary Payable 10,000 - BSalary Expense 10,000
Cash 10,000 - CSalary Payable 10,000
Cash 10,000 - DSalary Payable 10,000
Salary Expense 10,000
- ASalary Expense 10,000
40Blankenship Company pays its employees every Friday for work rendered that week. The payroll is typically $10,000 per week. What journal entry would be recorded (on Wednesday) if the end of the accounting period occurred on a Wednesday?
- ASalary Expense 6,000
Salary Payable 6000 - BSalary Expense 6,000
Cash 6,000 - CSalary Payable 6,000
Cash 6,000 - DSalary Payable 6,000
Salary Expense 6,000
- ASalary Expense 6,000
41Blankenship Company pays its employees every Friday for work rendered that week. The payroll is typically $10,000 per week. Blankenship's year-end occurred on Wednesday, at which time a correct adjusting entry was recorded. On the following Friday, which of the following payroll journal entries should be recorded?
- ASalary Expense 10,000
Cash 10,000 - BSalary Expense 4,000
Salary Payable 6,000
Cash 10,000 - CSalary Expense 6,000
Salary Payable 4,000
Cash 10,000 - DSalary Payable 10,000
Cash 10,000
- ASalary Expense 10,000
42On November 1, 20X1, Limit Company purchased a one-year insurance policy for $12,000. Limit Company debited Cash and credited Prepaid Insurance for $12,000. At the end of December, 20X1, $2,000 of insurance had expired. The journal entry to properly state all accounts involved on December 31, 20X1, would be:
- AInsurance Expense 2,000
Prepaid Insurance 22,000
Cash 24,000 - BInsurance Expense 2,000
Prepaid Insurance 2,000 - CInsurance Expense 2,000
Cash 2,000 - DPrepaid Insurance 2,000
Insurance Expense 2,000
- AInsurance Expense 2,000
43Simmons Company received and recorded a $5,000 payment for services to be rendered in the future. If the income statement approach to adjusting entries is used, the appropriate adjusting entry at the end of the accounting period for $3,000 of revenue not yet earned would be:
- AService Revenue 3,000
Unearned Service Revenue 3,000 - BService Revenue 2,000
Unearned Service Revenue 2,000 - CAccounts Receivable 3,000
Unearned Service Revenue 3,000 - DNo entry would be needed.
- AService Revenue 3,000
44Hefty Company wants to know the effect of different inventory methods on financial statements. Given below is information about beginning inventory and purchases for the current year.
January 2 Beginning Inventory 500 units at $3.00
April 7 Purchased 1,100 units at $3.20
June 30 Purchased 400 units at $4.40
December 7 Purchased 1,600 units at $4.40
Sales during the year were 2,700 units at $5.00. If Hefty used the first-in, first-out method, ending inventory would be:- A$2,780
- B$3,960
- C$9,700
- D$10,880
45Hefty Company wants to know the effect of different inventory methods on financial statements. Given below is information about beginning inventory and purchases for the current year.
January 2 Beginning Inventory 500 units at $3.00
April 7 Purchased 1,100 units at $3.20
June 30 Purchased 400 units at $4.00
December 7 Purchased 1,600 units at $4.40
Sales during the year were 2,700 units at $5.00. If Hefty used the periodic LIFO method, cost of goods sold would be:- A$2,780
- B$3,960
- C$9,700
- D$10,800
46Hefty Company wants to know the effect of different inventory methods on financial statements. Given below is information about beginning inventory and purchases for the current year.
January 2 Beginning Inventory 500 units at $3.00
April 7 Purchased 1,100 units at $3.20
June 30 Purchased 400 units at $4.00
December 7 Purchased 1,600 units at $4.40
Sales during the year were 2,700 units at $5.00. If Hefty used the Weighted-Average method, gross profit would be:- A$3,255
- B$3,415
- C$10,245
- D$13,500
47Bernstein Corporation recently experienced a fire which destroyed all of its inventory. The following data have been reconstructed from partial accounting information, and pertain to the year up to the date of the fire.
Beginning inventory $20,000
Net Purchases $45,000
Sales $80,000
Gross Profit Rate 40%
Using the gross profit method, estimate the dollar amount of inventory which was destroyed in the fire.- A$17,000
- B$33,000
- C$48,000
- D$65,000
48Selected information for 20X1 for the Bernstein Company is as follows:
Cost of goods sold $6,000,000
Average Inventory $2,000,000
Net sales $8,000,000
Average receivables $3,000,000
Net Income $1,000,000
Assuming a 360-day business year, what was the inventory turnover ratio for Bernstein?- A3
- B4
- C5
- D6
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