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A company had gross profit of $134,200 on net sales of $205,000. If ending inventory was $8,000 and average inventory was $7,080, what is the company's inventory turnover?(Points : 2)

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Question 1. 1. A company had gross profit of $134,200 on net sales of $205,000. If ending inventory was $8,000 and average inventory was $7,080, what is the company's inventory turnover?(Points : 2)

       10.0
       8.85
       16.77
       18.95
       28.95

 

Question 2. 2. GAAP requires that the inventory of a company be reported at:(Points : 2)

       Market value
       Historical cost
       Lower of cost or market
       Replacement cost
       Retail value

 

Question 3. 3. A ledger is:(Points : 2)

       A record containing all accounts (with amounts) for a business
       A journal in which transactions are first recorded
       A collection of documents that describe transactions and events during the accounting process
       A list of all accounts with their debit balances at a point in time

 

Question 4. 4. Goods in transit are included in a purchaser's inventory:(Points : 2)

       At any time during transit
       When the purchaser is responsible for paying freight charges
       When the supplier is responsible for freight charges
       If the goods are shipped FOB destination
       After the half-way point between the buyer and seller

 

Question 5. 5. The days' sales uncollected ratio is used to:(Points : 2)

       Measure how many days of sales remain until the end of the year
       Determine the number of days that have passed without collecting on accounts receivable
       Identify the likelihood of collecting sales on account
       Estimate how much time is likely to pass before the amount of accounts receivable is collected
       Measure the amount of layaway sales for a period

 

Question 6. 6. A company normally sells its product for $40 per unit. However, the selling price has fallen to $30 per unit. This company's current inventory consists of 200 units purchased at $32 per unit. Replacement cost has now fallen to $26 per unit. Calculate the value of this company's inventory at the lower of cost or market:(Points : 2)

       $5,200
       $6,400
       $6,000
       $8,000

 

Question 7. 7. Wisconsin Rentals purchased office supplies on credit. The general journal entry made by Wisconsin Rentals will include a:(Points : 2)

       Debit to Accounts Payable
       Debit to Accounts Receivable
       Credit to Cash
       Credit to Accounts Payable

 

Question 8. 8. Cash equivalents:(Points : 2)

       Include savings accounts
       Include checking accounts
       Are short-term investments sufficiently close to their maturity date that their value is not sensitive to interest rate changes
       Include time deposits

 

Question 9. 9. Given the following information, determine the cost of goods sold for December 31 using the FIFO periodic inventory method. 
December 2: 5 units were purchased at $7 per unit.
December 9: 10 units were purchased at $9.40 per unit.
December 11: 12 units were sold at $35 per unit
December 15: 20 units were purchased at $10.15 per unit
December 22: 18 units were sold at $35 per unit(Points : 2)

       $282.15
       $332.10
       $281.25
       $297.00

 

Question 10. 10. Given the following information:
Petty cash balance: $530.00Courier receipt: $ 74.22
Postage receipt: $ 25.00Office Supplies receipt: $ 95.64
Business Meal receipt: $ 54.21Cash on hand at the end of the month: $299.71
What is the amount that needs to be recorded for cash over and short?(Points : 2)

       debit $23.29
       credit $23.29
       debit $18.78
       no cash over and short is necessary
       credit $18.78

 

Question 11. 11. Days' sales in inventory is calculated as:(Points : 2)

       Ending inventory divided by sales times 365
       Cost of goods sold divided by ending inventory
       Ending inventory divided by cost of goods sold times 365
       Cost of goods sold divided by ending inventory times 365
       Ending inventory divided by cost of goods sold

 

Question 12. 12. Acme-Jones Corporation uses a FIFO perpetual inventory system. 
August 2, 25 units were purchased at $12 per unit.
August 5, 10 units were purchased at $13 per unit
August 15, 12 units were sold at $25 per unit.
August 18, 15 units were purchased at $14 per unit.
What was the amount of the ending inventory for the month of August?(Points : 2)

       $496.00
       $486.00
       $492.57
       $300.00
       $510.00

 

Question 13. 13. A company made a bank deposit on September 30 that did not appear on the bank statement dated September 30. In preparing the September 30 bank reconciliation, the company should:(Points : 2)

       Deduct the deposit from the bank statement balance
       Send the bank a debit memorandum
       Deduct the deposit from the September 30 book balance and add it to the October 1 book balance
       Add the deposit to the book balance of cash
       Add the deposit to the bank statement balance

 

Question 14. 14. Which of the following list of events properly reflects the early steps taken in the accounting process?(Points : 2)

       Record relevant transactions, Post journal information to ledger accounts Analyze each transaction, Prepare and analyze the trial balance
       Post journal information to ledger accounts, Analyze each transaction, Post journal information to ledger accounts, Prepare and analyze the trial balance
       Prepare and analyze the trial balance, Analyze each transaction, Post journal information to ledger accounts, Record relevant transactions
       Analyze each transaction, Post journal information to ledger accounts, Record relevant transactions, Prepare and analyze the trial balance
       Analyze each transaction, Record relevant transactions, Post journal information to ledger accounts, Prepare and analyze the trial balance

 

Question 15. 15. A company had cash sales of $49,527, credit sales of $38,540, sales returns and allowances of $7,100 and sales discounts of $4,375. The company's net sales for this period equal:(Points : 2)

       $80,967
       $83,692
       $88,067
       $76,592
       $99,542

 

Question 16. 16. The operating cycle for a merchandiser that sells only for cash moves from:(Points : 2)

       Purchases of merchandise to inventory to cash sales
       Purchases of merchandise to inventory to accounts receivable to cash sales
       Inventory to purchases of merchandise to cash sales
       Accounts receivable to purchases of merchandise to inventory to cash sales

 

Question 17. 17. Pre-numbered printed checks are an example of which internal control principle?(Points : 2)

       Technological controls
       Maintain adequate records
       Perform regular and independent reviews
       Establish responsibilities

 

Question 18. 18. At the end of the day, the cash register's record shows $1,000 but the count of cash in the register is $1,035. The proper entry to record this excess includes a:(Points : 2)

       Credit to Cash for $35
       Debit to Cash for $35
       Credit to Cash Over and Short for $35
       Debit to Cash Over and Short for $35
       Debit to Petty Cash for $35

 

Question 19. 19. On July 22, a company purchased merchandise inventory at a cost of $5,250 with credit terms 2/10, net 60. If the company borrows money at 12% to pay for the purchase on the last day of the discount period and pays the loan off on the last day of the credit period, what would be the net savings for the company?(Points : 2)

       $99.50
       $-20.43
       $84.57
       $20.43
       $-84.57

 

Question 20. 20. An income statement that includes cost of goods sold as another expense and shows only one subtotal for total expenses is a:(Points : 2)

       Balanced income statement
       Single-step income statement
       Multiple-step income statement
       Combined income statement
       Simplified income statement

 

Question 21. 21. The acid-test ratio:(Points : 2)

       Is also called the quick ratio
       Measures profitability
       Measures inventory turnover
       Is generally greater than the current ratio

 

Question 22. 22. Western Company has an annual reporting period that runs from July 1st through 
June 30th. Based on this information which of the following is a true statement?(Points : 2)

       Western probably has little seasonal variation in their sales
       Western has violated the time period principle
       Western must prepare financial statements as of December 31 each year
       Western has adopted a fiscal year
       Western does not have an accountant

 

Question 23. 23. Interim financial statements refer to financial reports:(Points : 2)

       That cover less than one year, usually spanning one, three or six-month periods
       That are prepared before any adjustments have been recorded
       That show the assets above the liabilities and the liabilities above the equity
       Where revenues are reported on the income statement when cash is received and expenses are reported when cash is paid
       Where the adjustment process is used to assign revenues to the periods in which they are earned and to match expenses with revenues

 

Question 24. 24. Given the following information, determine the cost of goods sold at December 31 using the Weighted Average periodic inventory method. 
December 2: 5 units were purchased at $7 per unit.
December 9: 10 units were purchased at $9.40 per unit.
December 11: 12 units were sold at $35 per unit
December 15: 20 units were purchased at $10.15 per unit
December 22: 18 units were sold at $35 per unit(Points : 2)

       $282.15
       $332.10
       $284.70
       $290.70
       $210.30

 

Question 25. 25. A company's current assets were $17,980, its quick assets were $11,420 and its current liabilities were $12,190. Its quick ratio equals:(Points : 2)

       0.94
       1.07
       1.48
       1.57
       2.40

 

Question 26. 26. The Discount on Common Stock account reflects:(Points : 2)

       The difference between the par value of stock and its issue price when the issue price is below par value.
       One share's portion of the issued corporation's net assets recorded in its accounts
       The difference between the par value of the stock and the amount contributed by stockholders when the amount contributed is more than par value
       An amount of assets defined by state law that stockholders must invest and leave invested in a corporation

 

Question 27. 27. A company has 1,000 shares of $50 par value, 4.5% cumulative and nonparticipating preferred stock and 10,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $1,000 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is: @ Feedback: Preferred stock dividend: 1,000 shares x $50/share x 4.5% = $2,250 Dividends in arrears year 1: $2,250 - $1,000 = $1,250 Preferred dividends due year 2: $1,250 + 2,250 = $3,500(Points : 2)

       $1,000
       $1,250
       $2,250
       $3,500

 

Question 28. 28. Stockholders' equity consists of:(Points : 2)

       Long-term assets
       Contributed capital and retained earnings
       Contributed capital and par value
       Retained earnings and cash
       Premiums and discounts

 

Question 29. 29. A discount on bonds payable:(Points : 2)

       Occurs when a company issues bonds with a contract rate less than the market rate
       Occurs when a company issues bonds with a contract rate more than the market rate
       Increases the Bond Payable account
       Decreases the total bond interest expense
       Is not allowed in many states to protect creditors

 

Question 30. 30. Shamrock Company had net income of $30,000. On January 1, there were 8,000 shares of common stock outstanding. On April 1, the company issued an additional 2,000 shares of common stock. The company declared a $2,700 dividend on its noncumulative, nonparticipating preferred stock. There were no other stock transactions. The company has an earnings per share of: @ Feedback: {$30,000 - $2,700/[(8,000 x 3/12) + (10,000 x 9/12)]} = $2.87(Points : 2)

       $2.87
       $2.73
       $3.41
       $3.16
       $3.75

 

Question 31. 31. A company had a profit margin of 8%. If net income equaled $40,000 and average total assets equaled $332,500, how much were net sales? @ Feedback: $40,000/.08 = $500,000(Points : 2)

       $3,200
       $500,000
       $26,600
       $4,156,250
       $372,500

 

Question 32. 32. A company receives a 6.2%, 60-day note for $9,650. The total amount of cash due on the maturity date is: @ Feedback: ($9,650 x 0.062 x 60/360) + $9,650 = $9,749.72(Points : 2)

       $598.30
       $99.72
       $9,650.00
       $10,248.30
       $9,749.72

 

Question 33. 33. A change in inventory reporting from LIFO to FIFO is:(Points : 2)

       An extraordinary item
       A discontinued item
       Not allowed once lower of cost or market is applied
       Allowed, if it improves the usefulness of information in the financial statements
       Not reported, as it is considered a change in accounting estimate

 

Question 34. 34. Horizontal analysis:(Points : 2)

       Is a method used to evaluate changes in financial data across time
       Is also called vertical analysis
       Is the presentation of financial ratios
       Is a tool used to evaluate financial statement items relative to industry statistics
       Evaluates financial data across industries

 

Question 35. 35. A company had total assets of $1,760,000, total cash flows of $1,320,000 and cash flows from operations of $205,000. The cash flow on total assets ratio is equal to: @ Feedback: $205,000/$1,760,000 = 11.65%(Points : 2)

       1.33%
       8.58%
       11.65%
       15.5%
       75%

 

Question 36. 36. A depreciation method in which a plant asset's depreciation expense for a period is determined by applying a constant depreciation rate each period to the asset's beginning book value is called:(Points : 2)

       Book value depreciation
       Declining-balance depreciation
       Straight-line depreciation
       Units-of-production depreciation
       Modified accelerated cost recovery system (MACRS) depreciation

 

Question 37. 37. The direct method for the preparation of the operating activities section of the statement of cash flows:(Points : 2)

       Separately lists each major item of operating cash receipts and cash payments
       Reports adjustments to reconcile net income to net cash provided or used by operating activities in the statement
       Reports a different amount of cash flows from operations than if the indirect method is used
       Is required if the company is a merchandiser
       Is required by the FASB

 

Question 38. 38. The appropriate section in the statement of cash flows for reporting the issuance of common stock for cash is:(Points : 2)

       Operating activities
       Financing activities
       Investing activities
       Schedule of noncash investing or financing activity
       None of these as this is not reported on the statement of cash flows

 

Question 39. 39. A company paid $0.75 in cash dividends per share. It has an earnings per share of $3.50 and a market price per share of $37.50. Its dividend yield equals: @ Feedback: $0.75/$37.50 = 2%(Points : 2)

       11.7%
       2.0%
       10.9%
       21.4%
       46.7%

 

Question 40. 40. Guidelines (rules-of-thumb) are developed from:(Points : 2)

       Industry statistics from the government
       Past experience
       Analysis of competitors
       Relations between financial items

 

Question 41. 41. Quick assets divided by current liabilities is equal to the:(Points : 2)

       Acid-test ratio
       Current ratio
       Working capital ratio
       Current liability turnover ratio
       Quick asset turnover ratio

 

Question 42. 42. Current assets minus current liabilities is equal to:(Points : 2)

       Profit margin
       Financial leverage
       Current ratio
       Working capital
       Quick assets

 

Question 43. 43. Selected information from Doodle Company's for 2010 is below (in millions):
Inventory decreased $6.0 
Accounts Payable increased by $7.0 
Cost of goods sold $36.50 
Salaries Expense $24.0 
Salaries Payable decreased $6.0 
Accounts Receivable increased by $10.0 
Sales $56.4
What is the amount of cash paid for purchases by Doodle during 2010? @ Feedback: 36.5-6-7 = 23.5(Points : 2)

       $36.5
       $47.5
       $37.5
       $23.5

 

Question 44. 44. A company has total assets of $5,600,482, common stock of 2,111,111, retained earnings of $1,058,473. What is the company's debt ratio? @ Feedback: ((5,600,482-2,111,111-1,058,476)/5,600,482) = 43.41%(Points : 2)

       43.41%
       65.00%
       41.57%
       50.00%
       42.81%

 

Question 45. 45. Stockholders' equity consists of: (Points : 2)

        Long-term assets
        Contributed capital and retained earnings
        Contributed capital and par value
        Retained earnings and cash

 

Question 46. 46. When using the indirect method to calculate and report net cash provided or used by operating activities, which of the following is subtracted from net income?(Points : 2)

       Decrease in income taxes payable
       Depreciation expense
       Amortization of intangible assets
       Bad debts expense
       Decrease in merchandise inventory

 

Question 47. 47. A company has total assets of $5,600,482, common stock of 2,111,111, retained earnings of $1,058,473. What is the company's equity ratio?(Points : 2)

       43.41%
       65.00%
       41.57%
       56.59%
       54.22%

 

Question 48. 48. Dell had net sales of $35,404 million. Its average total assets for the period were $14,502 million. Dell's total asset turnover is equal to: @ Feedback: $35,404/$14,502 = 2.44(Points : 2)

       0.40
       0.35
       1.45
       2.44
       3.50

 

Question 49. 49. Which one of the following is representative of typical cash flows from operating activities?(Points : 2)

       Proceeds from collecting the principal amount of loans
       Repayment of principal on loans
       Proceeds from the issuance of bonds and notes payable
       Payments by a merchandiser to acquire equity securities of other companies
       Receipts of cash sales

 

Question 50. 50. Total asset turnover is used to evaluate:(Points : 2)

       The efficiency of management's use of assets to generate sales
       The need for asset replacement
       The number of times operating assets were sold during the year
       The cash flows used to acquire assets
       The relation between asset cost and book value

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