4578477
Description
Quiz by Nick J. Whise, updated more than 1 year ago
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Created by Nick J. Whise
about 8 years ago
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Question 1
Question
Frodo Corp. purchased a used 2nd breakfast maker from Bilbo Corp., which Bilbo had fully depreciated. Payment was $2,000. Frodo believes the maker will last four years. Frodo uses straight-line depreciation, and there is no residual value.
The balance of Accumulated Depreciation—2nd Breakfast Maker after the first year of use by Frodo will be:
Answer
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$0
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$400
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$500
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$1,000
Question 2
Question
On November 1, 2015, AquinasCo. signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2016. AquinasCo. should report interest payable at December 31, 2015, in the amount of:
Answer
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$0
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$1,000
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$2,000
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$3,000
Question 3
Question
All of the following costs would be found in a company’s accounting records except:
Answer
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sunk costs.
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opportunity costs.
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indirect costs.
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direct costs.
Question 4
Question
Which of the following would most likely be included as part of overhead in the production of picnic tables?
Answer
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The wood used in the tables.
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The wages paid to workers who assemble the tables.
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The commissions paid to the salespersons who sold the tables.
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The wood stain used on the tables.
Question 5
Question
If a company overstated ending inventory in year 1 and stated ending inventory correctly in year 2, which statement is correct?
Answer
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Net income is understated in year 1.
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Net income is correct in year 2.
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Net income is overstated in year 2.
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There is no effect on income in year 3.
Question 6
Question
An increase in the Prepaid Insurance account of $1,000 over the course of a year would be shown on the company's statement of cash flows prepared under the indirect method as:
Answer
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an addition to net income of $1,000 in order to arrive at net cash provided by operating activities.
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a deduction from net income of $1,000 in order to arrive at net cash provided by operating activities.
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an addition of $1,000 under financing activities.
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a deduction of $1,000 under financing activities.
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