Accounting provides information to:
| managers. |
| government. |
| investors. |
| All of the above. |
Which is an advantage of a sole proprietorship form of business?
There is limited personal risk.
The business can continue indefinitely.
The owner makes all the decisions.
All of the above.
If total assets are $35,000 and total liabilities are $8,000, Capital must equal:
12000
27000
8000
20000
Revenue, expenses, and withdrawals are subdivisions of:
assets.
liabilities.
owner's equity.
All of the above.
A formal account that has columns for date, explanation, post reference, debit, and credit is called the:
T account.
standard account form.
ledger.
chart of accounts
An account that would be decreased by a credit is:
cash.
fees earned.
capital.
accounts payable.
The time period for which a statement of owner's equity is prepared is a(n):
calendar year.
accounting period.
fiscal period.
accounting cycle.
Financial statements that are prepared for a period shorter than a year are called:
accounting period statements.
fiscal year statements.
interim statements.
journal statements.
How are explanations distinguished in the journal?
They are underlined.
They are in bold print.
They are indented below the credit entries.
They are written at the margin, in line with the debit entries.
Prepaid Rent is considered to be a(n):
liability.
asset.
contra-asset.
revenue.
The journal entry to record a purchase of inventory on credit under the perpetual system include:
a debit to Merchandise Inventory.
a debit to Purchases.
a credit to Accounts Payable.
Both A and C.
The Allowance for Doubtful Accounts is listed on the balance sheet under the caption:
owner's equity.
current liabilities.
current assets.
fixed assets.
Which of the following is an operating expense?
Salaries expense
Payroll tax expense
Purchases
Both A and B
Which of the following situations would more likely not result in bad debts?
The company extends credit easily.
The company has a strict credit policy.
The company has a cash-only policy.
None of these answers are correct.
The cost of a plant asset did not include installation costs that were expensed. This error would cause:
the period's net income to be overstated.
the period's net income to be understated.
the period's end assets to be understated.
Both B and C
An item that can be converted into cash or used up during the normal operating cycle is:
a current asset.
Plant and Equipment.
a current liability.
a long term liability.
If $6,000 was the beginning inventory, purchases were $10,000, and sales were $7,000, what would the ending inventory be?
9000
6000
0
3000
Ending inventory:
increases Cost of Goods Sold.
decreases Cost of Goods Sold.
does not affect Cost of Goods Sold.
increases liabilities.
Workers' Compensation Insurance is:
paid by the employer to protect the employee against job-related injury or death.
paid by the employee to protect himself against job-related accidents or death.
paid by the employer to protect the employee against injury or death unrelated to the job.
paid by the employee to protect himself against accidents or death unrelated to the job.
The time frame when customers are allowed to pay their bills and still be eligible for a discount is the:
credit period.
discount period.
closing period.
due date.
Issued stock is:
authorized shares of stock that can be sold.
stock only sold to another company.
shares sold and in stockholders' possession.
stock sold to stockholders.
In the statement of cash flows, which event would cause net income to be increased?
A decrease in Inventory
An increase in Prepaid Insurance
A decrease in Accounts Payable
An increase in Accounts Receivable
Finished Goods Inventory appears on which of the following statements on the worksheet?
Statement of cost of goods manufactured and income statement
Statement of cost of goods manufactured and balance sheet
Income statement and balance sheet
Income statement and cost of goods sold statement
One reason a corporation might issue bonds rather than sell stock is that :
bond interest is a tax-deductible expense.
interest rates are high.
dividends will lower the amount of tax due.
bondholders have claims at liquidation.
For a corporation, bond interest :
is treated the same as dividends for tax purposes.
has no effect on earnings and therefore has no effect on income taxes.
reduces income tax by reducing earnings.
None of the above.
Dividends paid to stockholders are:
taxable to the recipient stockholder.
taxable to the corporation.
treated the same as bond interest.
None of the above.
If beginning and ending inventories are $20,000 and $30,000, respectively, and cost of goods sold is $400,000, what is the inventory turnover ratio?
18
16
15.5
15
Declaration of a cash dividend causes:
an increase in stockholders' equity.
an increase in cash.
an increase in liabilities.
None of the above.
The current ratio is:
quick assets divided by current liabilities.
assets divided by liabilities.
current assets divided by current liabilities.
net sales divided by current liabilities.
When the contract rate of interest on bonds is equal to the market rate of interest, bonds sell at:
a premium.
their face value.
their maturity rate.
a discount.
Which line in the figure points to the cell name box?
2
4
7
8
Which line in the figure points to the row header?
1
6
8
9
Which one of the following is the symbol for multiplication in an Excel spreadsheet formula?
x
^
~
*
The values of cells K6, L6, M6, and N6, and are 12, 8, 5, and 2, respectively. What is the result of the formula =1.5*(K6+L6)/M6-N6?
3.2
4
10
17.4
The reference to a cell in a formula is $A$1. What type of reference is this?
Absolute
Mixed
Relative
Unknown
In Excel, this type of display of worksheet data is referred to as a/an __________ chart.
column
area
line
rectangle
An Excel worksheet has a date value of 25-Jun in cell G6. The Fill Handle of that cell is then dragged to cell G9. What value will appear in cell G9?
25-Jun
28-Jun
25-Sep
28-Sep
What function returns the number of nonblank cells in a given range which meet the given criteria?
RANGE
MIN(values)
COUNTIF
MIN(range)
_________ are shortcuts which allow you to reduce a series of different commands or keystrokes into a couple of clicks of the mouse.
Formulas
Functions
Macros
Databases
_________ is the shortcut for the Paste command.
Ctrl+X
Ctrl+C
Ctrl+H
Ctrl+V
Of the following, which is NOT one of the four main areas of finance?
International finance
Corporate finance
Investments
All are considered main areas of finance.
________ is a major disadvantage of the corporate form of business.
Double taxation
Unlimited liability
Lack of ability to raise capital
Transfer of ownership
Everything else equal, an industry with more leverage will have a:
higher return on assets.
higher return on equity.
lower return on equity.
Both A & B
If you can earn 5.25% per year on your investments, how long will it take to double your money?
6.31 years
19.05 years
13.55 years
There is not enough information to answer this question.
Travis bought a share of stock for $31.50 that paid a dividend of $.85 and sold six months later for $27.65. What was his dollar profit or loss and holding period return?
-$3.00, -9.52%
-$3.85, -12.22%
-$.85, -2.70%
-$3.85, -9.52%
If you were required to estimate the average return for one category of securities for the coming year, history tells us that you should have the greatest degree of confidence estimating which of the following?
Long-term government bonds
3-month U.S. Treasury bills
Small-company stocks
Large-company stocks
Which of the following are not considered a part of the firm's capital structure?
Long-term debt
Retained earnings
Inventory
Preferred stock
Which of the following choices lists the least to most aggressive actions in the pursuit of overdue debt?
1) a collection agency, 2) court action, 3) a letter requesting overdue payment
1) court action, 2) a collection agency, 3) a letter requesting overdue payment
1) a letter requesting overdue payment, 2) court action, 3) a collection agency
1) a letter requesting overdue payment, 2) a collection agency, 3) court action
John is in a high income-tax bracket and wishes to minimize current taxes payable. He also has a sizeable current income and prefers high growth rates to significant annual cash flow from his equity investments. Which of the following dividend polices would John most likely prefer if we assume that the dividend policy has no impact on the value of the firm and that the capital gains tax rate is lower than the ordinary tax rate?
High-dividend-payout policy
No-dividend-payout policy
Low-dividend-payout policy
John would be indifferent to all of the dividend policies.
Which of the following would NOT be considered a cost of debt financing?
The required return on a bank loan
The required return on preferred stock
The yield-to-maturity of a bond issue
The required return on money borrowed from a venture capitalist
