ACC 291 Week 5 Practice Quiz

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ACC/291

PRINCIPLES OF ACCOUNTING II

The Latest Version A+ Study Guide

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ACC 291 Entire Course Link
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ACC 291 Week 1 Practice Quiz

Practice Question 01

What type of receivable is evidenced by a formal instrument and normally requires the
payment of interest?

A trade receivable

An account receivable

A note receivable

Past-due accounts receivables


Practice Question 05

When is a receivable recorded by a service organization?

When service is provided on account

When the related expenses are incurred

When the bill is sent to the customer

When the customer pays

Practice Question 10

At what value are accounts receivable reported on the balance sheet?

Cash (net) realizable value

Present value

Maturity value

Fair market value

Practice Question 21
Short-term notes receivable are reported at their cash (net) realizable value.

True

False

Practice Question 25

Which one of these statements about promissory notes is incorrect?

The party to whom payment is to be made is called the payee.

The party making the promise to pay is called the maker.

A promissory note is not a negotiable instrument.

A promissory note is more liquid than an account receivable.

Practice Question 02

Which of the following should be classified as an other receivable?

Accounts receivable

Notes receivable
Interest receivable

Trade receivables

Practice Question 03

What type of receivables result from sales transactions?

Other receivables

Non-trade receivables

Trade receivables

Long-term receivables

Practice Question 52

Which one of the following is not a method used by companies to accelerate cash
receipts?

Offering discounts for early payment

Writing off receivables


Selling receivables to a factor

Accepting national credit cards for customer purchases

Practice Question 53

Which of the following accounts is debited when a company factors its accounts receivable?

Interest Expense

Accounts Receivable

Service Charge Expense

Loss on Sale of Accounts Receivable

Practice Question 57

Which of the following is the value at which loans and receivables should be reported under
IFRS?

Maturity value
Cash realizable value

Amortized cost

Net of bad debt expense

ACC 291 Week 2 Practice Quiz

Practice Question 01

Land improvements are depreciable assets.

True

False

Practice Question 05

Which of the following is not a depreciable asset?

Land improvements

Equipment

Buildings
Lan

Practice Question 10

Expenditures to maintain the operating efficiency and expected productive life of the unit are expensed as

incurred.

True

False

Practice Question 15

What is depreciation?

A valuation approach

A cash accumulation approach

A cost allocation method

An adjustment to market value over time

Practice Question 22

Cuso Company purchased equipment on January 1, 2016, at a total invoice cost of $400,000. The equipment

has an estimated salvage value of $10,000 and an estimated useful life of 5 years. What is the amount of
accumulated depreciation at December 31, 2017, if the straight-line method of depreciation is used?

$156,000

$78,000

$80,000

$160,000

Practice Question 29

When there is a change in estimated depreciation

current and future years depreciation should be revised.

new plant assets should be acquired to replace the old.

only future years depreciation should be revised.

previous depreciation should be corrected.

Practice Question 36

On June 1, 2017, Brislin Company sold some equipment for $22,000. The original cost was $80,000, the

estimated salvage value was $8,000, and the expected useful life was 8 years. The equipment was fully

depreciated. How much is the gain or loss on the sale?


$50,000 loss

$5,400 gain

$14,000 gain

$850 loss

Practice Question 44

Given the following account balances at year end, how much is amortization expense on Anisha Enterprises

income statement for the current year if Anisha thinks all of its intangibles should be amortized over ten

years?

Sales revenue $45,000,000

Patents 1,500,000

Accounts receivable 4,000,000

Land 15,000,000

Equipment 25,000,000

Trademarks 1,000,000

Goodwill 4,500,000

Research & development 2,000,000

$250,000

$700,000

$900,000

Some other answer

Practice Question 51
Walk Cos average total assets are $200,000, net sales total to $100,000, and net income is $40,000. How

much net income did Walk Co generate for each dollar of assets invested?

$0.50

$0.20

$5.00

$2.00

Practice Question 58

Schneider Trucking Inc. purchased a new semi-truck on January 1, 2016 for $200,000. Its useful life is

expected to be 4 years and its salvage value is estimated at $25,000. What is the depreciation for 2017

using the declining-balance method at double the straight-line rate?

$50,000

$100,000

$43,750

$87,500

ACC 291 Week 3 Practice Quiz

Practice Question 01
The time period for classifying a liability as current is one year or the operating cycle, whichever is

probable.

longer.

shorter.

possible.

Practice Question 05

Which one of the following is not a typical current liability?

Mortgages payable

Salaries payable

Current maturities of long-term debt

Interest payable

Practice Question 10

Buttner Company borrows $88,500 on September 1, 2017, from Harrington State Bank by signing an

$88,500, 12%, one-year note. How much is accrued interest at December 31, 2017?

$10,620
$2,655

$3,540

$4,425

Practice Question 25

How is the market value of a bond issuance determined?

By adding the face value of the principal amount to the stated value of the interest payments.

By computing the present value of the principal.

By computing the present value of the interest payments.

By adding the present value of the principal amount to the present value of the interest payments.

Practice Question 30

If the contractual rate of interest is lower than the market rate of interest, bonds will sell at a premium.

True

False

Practice Question 35
What is the effect of amortizing a bond discount?

It decreases bond interest expense.

It increases the carrying value of the bonds.

It decreases the maturity value of the bonds.

There is no effect on the bond interest expense.

Practice Question 31

Cuso Inc. issues 10-year bonds with a maturity value of $200,000. If the bonds are issued at a premium,

what does this indicate?

The contractual interest rate exceeds the market interest rate.

The contractual interest rate and the market interest rate are the same.

The market interest rate exceeds the contractual interest rate.

No relationship exists between the market and contractual rates.

Practice Question 34

When a bond is sold at a premium, at what amount is it reported on the balance sheet?

Premium value
Market value

Interest value

Carrying value

Practice Question 36

Tanner, Inc. issued a 10%, 5-year, $100,000 bond when the market rate of interest was 12%. At what value

will the bond sell?

Face value

A premium

A discount

Par

Practice Question 46

Which of the following is not a commonly used method of presenting current liabilities on the balance sheet?

Listing currently maturing long-term debt first.

Listing current debt in the order of oldest first and then chronologically.

In order of magnitude or size.


In order of their maturity.

ACC 291 Week 3 The Liabilities Section of OBrians Balance

Sheet
Purpose of Assignment

The purpose of this assignment is to help you understand the balance sheet presentation
for the liabilities of a company.

Assignment Steps

Resources: Financial Accounting: Tools for Business Decision Making

Prepare the liabilities section of O'Brian's balance sheet using the following information:
Accounts payable $157,000
Notes payable (due May 1, 2018) $20,000
Bonds payable (due 2021) $900,000
Unearned rent revenue $240,000
Discount on bonds payable $41,000
FICA taxes payable $7,800
Interest payable $40,000
Notes payable (due 2019) $80,000
Income taxes payable $3,500
Sales taxes payable $1,700

The Liabilities Section of O'Brian's balance sheet must be 525 words.

Show work on the Week 3 Excel spreadsheet.

Note: This assignment requires that you only submit an Excel Workbook file. There are
no written or APA guideline requirements.

Click the Assignment Files tab to submit your assignment.


ACC 291 Week 4 Practice Quiz

Practice Question 01

The stockholders of a corporation have unlimited

liability.

True

False

Practice Question 05

Which of the following is a disadvantage of the

corporate business form?

No income taxes

Easy acquisition of capital


Government regulation

Continuous life

Practice Question 10

If a corporation issues 1,000 shares of $3 par common stock for $7 a share, how
much is the legal capital?

$3,000

$7,000

$0

$4,000

Practice Question 20

For what reason might a company acquire treasury stock?

To increase the number of shares of stock outstanding

To reissue the shares to officers and employees under bonus and stock
compensation plans
To signal to the stock market that management believes the stock is
overpriced

To increase profit

Practice Question 30

Which one of the following is not a right of preferred stockholders?

Priority to the assets in the event of liquidation

Priority in relation to dividends

Priority voting rights

Priority to dividends and assets in liquidation.

Practice Question 59

If everything else is held constant, what will cause earnings per share to
increase?

The purchase of treasury stock

The payment of a cash dividend to preferred stockholders

The issuance of new shares common stock

The payment of a cash dividend to common stockholders


Practice Question 56

Which of the following does not increase the return on common stockholders
equity?

An increase in the return on assets ratio

An increase in the use of debt financing

An increase in the companys stock price

An increase in the companys net income

Practice Question 60

When a stock dividend is declared, which of the following accounts is debited?

Common Stock Dividends Distributable

Paid-in Capital in Excess of Par Value

Common Stock

Stock Dividends

Practice Question 55

Jaylo Inc. had net income of $500,000, net sales of $10,000,000 and paid cash
dividends of $200,000 to the common stockholders. How much is Jaylos payout
ratio?

4%

40%

20%

2%

Practice Question 54

Consider the following data for a corporation:

Net income $800,000


Preferred stock dividends $50,000
Market price per share of stock $25
Average common stockholders equity $4,000,000
Cash dividends declared on common stock $20,000

What is the return on common stockholders equity?

19.50%

20.00%

21.25%

18.75%
ACC 291 Week 4 Stockholders Equity Section of the Balance

Sheet
Purpose of Assignment

The purpose of this assignment is to help you become familiar with examining the
stockholders' equity section of the balance sheet.

Assignment Steps

Resources: Financial Accounting: Tools for Business Decision Making, Ch. 11

Answer the following questions in 1,050 words using the Lachlin Corporation Balance
Sheet located on p. 575 of Financial Accounting:
How many shares of common stock are outstanding?
Assuming there is a stated value, what is the stated value of the common stock?
What is the par value of the preferred stock?
If the annual dividend on preferred stock is $36,000, what is the dividend rate on
preferred stock?
If dividends of $72,000 were in arrears on preferred stock, what would be the
balance reported for retained earnings?

Use the Week 4 Excel spreadsheet and submit with your answers.

Click the Assignment Files tab to submit your assignment.

ACC 291 Week 5 Financial Reporting Problem II


Purpose of Assignment

The purpose of this assignment is to expose you to the basic process involved in the
analysis of the cash flow statement.

Assignment Steps

Resources: Appendix A of Financial Accounting: Tools for Business Decision Making


Note: This is a two part assignment.

Part 1

Answer questions A-F in problem CT12-1 in Financial Accounting (p. 640).

Provide an 875-word analysis of your findings.

Include conclusions concerning the management of the company's cash.

Part 2

Complete a 1,050-word summary of findings and recommendations from the following


questions:
What is the par or stated value per share of Apple's common stock?
What percentage of Apple's authorized common stock was issued at September
27, 2014?
How many shares of common stock were outstanding at September 28, 2013,
and at September 27, 2014?
Calculate the payout ratio, earnings per share, and return on common
stockholders' equity for 2014.

Use the Week 5 Excel spreadsheet and submit with your analysis and summary.

Click the Assignment Files tab to submit your assignment.

ACC 291 Week 5 Practice Quiz

Practice Question 10

Which of the following is an operating activity?

Payment of a cash dividend


Sale of equipment

Payment of interest

Making a loan to another entity

Practice Question 15

Which is an example of a cash flow from an investing activity?

Payment of cash to repurchase outstanding capital stock

Receipt of cash from the sale of equipment

Payment of cash to suppliers for inventory

Receipt of cash from the issuance of bonds payable

Practice Question 20

Hanover, Inc. purchased land through the issuance of long-term bonds. How is this
reported on the statement of cash flows?

Operating activity
Significant noncash investing and financing activity that merits disclosure

Investing inflow

Financing outflow

Practice Question 25

Under the indirect method of preparing the statement of cash flows, which of the following
is added to net income in the operating activities section?

Gain on sale of equipment

Depreciation expense

Decrease in accounts payable

Increase in accounts receivable

Practice Question 30

In what section of the statement of cash flows will the issuance of bonds payable to
acquire a building be reported?
Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Noncash investing and financing activities

Practice Question 45

Which of the following items is reported in the operating activities section of a statement of
cash flows prepared using the direct method?

Cash payments to suppliers

Depreciation expense

Loss on sale of building

Increase in accounts receivable

Practice Question 20

In horizontal analysis of a balance sheet, of what amount is each item expressed as a


percentage?

Current year net income amount

Base-year amount

Current year stockholders equity amount

Current year total assets amount

Practice Question 23

The following schedule is a display of what type of analysis?

Amount Percent

Current assets $200,000 25%

Property, plant, and equipment 600,000 75%

Total assets $800,000 100%

Trend analysis

Horizontal analysis

Vertical analysis
Ratio analysis

Practice Question 25

Ceradyne, Inc. presented the following data for a company:

Current liabilities $360

Long-term debt 480

Common stock 640

Retained earnings 520

Total liabilities & stockholders equity $2,000

How would common stock appear on a common size balance sheet using vertical analysis?

32.0%

Cannot be determined from the data given

75.0%

55.1%

Practice Question 44

Use the following financial statement information as of the end of each year to answer this
question.

2017 2016
Inventory $54,000 $48,000

Current assets 81,000 106,000

Total assets 392,000 336,000

Current liabilities 27,000 36,000

Total liabilities 102,000 88,000

Total stockholders equity 290,000 248,000

Preferred stock 10,000 10,000

Net sales 784,000 697,000

Cost of goods sold 306,000 277,000

Net income 34,000 90,000

Tax expense 22,000 18,000

Interest expense 12,000 12,000

Dividends paid to preferred stockholders 2,000 2,000

Dividends paid to common shareholders 1,000 1,000

Compute the profit margin for 2017.

4.3%

8.9%

11.7%

8.4%

ACC 291 Week 5 Final Exam

Multiple Choice Question 60

Your answer is correct.


The term "receivables" refers to

cash to be paid to debtors.

amounts due from individuals or companies.

merchandise to be collected from individuals or companies.

cash to be paid to creditors.

Multiple Choice Question 70

Your answer is correct.

Three accounting issues associated with accounts receivable are

accrual, bad debts, and accelerating collections.

depreciating, valuing, and collecting.

recognizing, valuing, and accelerating collections.

depreciating, returns, and valuing.

Multiple Choice Question 82

Your answer is correct.

When the allowance method is used to account for uncollectible accounts, Bad Debts
Expense is debited when
a sale is made.

an account becomes bad and is written off.

management estimates the amount of uncollectibles.

a customer's account becomes past due.

Multiple Choice Question 175

Which one of the following is not a principle of sound accounts receivable management?

Determine a payment period.

Delay cash receipts from receivables if necessary.

Determine to whom to extend credit.

Monitor collections.

Multiple Choice Question 176

Your answer is correct.

The accounts receivable turnover is computed by dividing

total sales by average receivables.


total sales by ending receivables.

net credit sales by average receivables.

net credit sales by ending receivables.

Multiple Choice Question 177

Your answer is correct.

The accounts receivable turnover is used to analyze

profitability.

liquidity.

risk.

long-term solvency.

Multiple Choice Question 190

Your answer is correct.

The following information is provided for Sheridan Company and Concord Corporation:

(in $ millions) Sheridan Company Concord Corporation


Net income 2017 $170 $390
Net sales 2017 1625 4550
Total assets 12/31/15 1005 2280
Total assets 12/31/16 1160 3080
Total assets 12/31/17 1160 4000
What is Concord's return on assets (rounded) for 2017?

11.0%

9.8%

14.6%

12.7%

Multiple Choice Question 48

Your answer is correct.

Which of the following is not properly classified as property, plant, and equipment?

Building used as a factory.

Land used in ordinary business operations.

Land improvement, such as parking lots and fences.

A truck held for resale by an automobile dealership.

Multiple Choice Question 49

Your answer is correct.

A characteristic of a plant asset is that it is


held for sale in the ordinary course of the business.

not currently used in the business but held for future use.

intangible.

used in the operations of a business.

Multiple Choice Question 69

Your answer is correct.

A current liability is a debt that can reasonably be expected to be paid

out of currently recognized revenues.

out of cash currently on hand.

within one year, or the operating cycle, whichever is longer.

between 6 months and 18 months.

Multiple Choice Question 70

Your answer is correct.

Which of the following most likely would be classified as a current liability?


Dividends payable

Bonds payable in 5 years

Mortgage payable as a single payment in 10 years

Three-year notes payable

Multiple Choice Question 210

Your answer is correct.

The 2017 financial statements of Sunland Company contain the following selected data (in
millions).

Current assets $75


Total assets 185
Current liabilities 39
Total liabilities 64
Cash 9
Interest expense 4
Income taxes 11
Net income 13

The debt to assets ratio (rounded) is

52.0%.

2.89%.

34.6%.

7.7 times.
Multiple Choice Question 207

Your answer is correct.

In a recent year Monty Corp. had net income of $152000, interest expense of $28700, and
income tax expense of $41500. What was Monty Corp.s times interest earned (rounded)
for the year?

6.30

5.30

7.74

6.74

Multiple Choice Question 168

Your answer is correct.

If bonds are issued at a discount, it means that the

bondholder will receive effectively less interest than the contractual rate of interest.

market interest rate is lower than the contractual interest rate.

market interest rate is higher than the contractual interest rate.

financial strength of the issuer is suspect.


Multiple Choice Question 161

Your answer is correct.

If bonds are issued at a premium, the stated interest rate is

adjusted to a higher rate of interest.

higher than the market rate of interest.

lower than the market rate of interest.

too low to attract investors.

Multiple Choice Question 50

Your answer is correct.

The chief accounting officer in a company is known as the

vice-president.

treasurer.

controller.

president.

Multiple Choice Question 51

Your answer is correct.


Which one of the following would not be considered an advantage of the corporate form of
organization?

Limited liability of stockholders.

Separate legal existence.

Continuous life.

Government regulation.

Multiple Choice Question 54

Your answer is correct.

Which of the following would not be true of a privately held corporation?

Its shares are regularly traded on the New York Stock Exchange.

It does not offer its shares for sale to the general public.

It is sometimes called a closely held corporation.

It is usually smaller than a publicly held company.

Multiple Choice Question 200

.
The following information pertains to Blue Company. Assume that all balance sheet
amounts represent average balance figures.

Total assets $400000


Stockholders' equity-common 280000
Total stockholders' equity 282000
Sales revenue 108000
Net income 22000
Number of shares of common stock 6000
Common dividends 6100
Preferred dividends 6600

What is Blue's payout ratio?

27.73%.

21%.

13%.

41%.

Multiple Choice Question 195

Your answer is correct.

Concord Corporation had net income of $67245 and paid dividends of $38000 to common
stockholders and $16500 to preferred stockholders in 2017. Concord Corporation common
stockholders equity at the beginning and end of 2017s was $450000 and $545000,
respectively. Concord Corporation return on common stockholders equity is

10%.
5%.

14%.

9%.

Multiple Choice Question 44

Your answer is correct.

The primary purpose of the statement of cash flows is to

provide information about the cash receipts and cash payments during a period.

provide information about the investing and financing activities during a period.

prove that revenues exceed expenses if there is a net income.

facilitate banking relationships.

Multiple Choice Question 43

Your answer is correct.

Which one of the following items is not generally used in preparing a statement of cash
flows?

Additional information.
Adjusted trial balance.

Current income statement.

Comparative balance sheets.

Multiple Choice Question 54

Your answer is correct.

The category that is generally considered to be the best measure of a company's ability to
continue as a going concern is

usually different from year to year.

cash flows from operating activities.

cash flows from investing activities.

cash flows from financing activities.

Multiple Choice Question 69

Your answer is correct.

Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows.
Indicate where, if at all, a stock dividend declared and issued would be classified on the
statement of cash flows.

Financing activities section.


Does not represent a cash flow.

Investing activities section.

Operating activities section.

Multiple Choice Question 71

Your answer is correct.

Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows.
Indicate where, if at all, an inventory increase with cash would be classified on the
statement of cash flows.

Investing activities section.

Financing activities section.

Operating activities section.

Does not represent a cash flow.

Multiple Choice Question 153

Free cash flow provides an indication of a companys ability to

generate net income.


generate cash to invest in capital expenditures.

generate cash to pay dividends.

generate cash to invest in capital expenditures and to pay dividends.

Multiple Choice Question 147

Your answer is correct.

When using the indirect method to compute cash provided by operating activities

decreases in inventory are subtracted from net income.

income taxes paid may be ignored.

amortization expense is added to net income.

increases in accounts receivable are added to net income.

Multiple Choice Question 138

Your answer is correct.

To determine the net cash provided (used) by operating activities, it is necessary to


analyze

the current year's income statement.


a comparative balance sheet.

additional information.

all of these answer choices are correct.

Multiple Choice Question 196

Your answer is correct.

Which of these is not a liquidity ratio?

Inventory turnover

Accounts receivable turnover

Current ratio

Asset turnover

Multiple Choice Question 193

Your answer is correct.

The current ratio would be of most interest to

short-term creditors.

long-term creditors.
customers.

stockholders.

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