Accounting quiz 14 Questions
1 Resources owned by a business
are referred to as
profits. dividends. assets. equity.
2 For 2014, EAB Corporation
reported net income of $78,750; net sales of $1,378,125; and weighted average
shares outstanding of 10,500. There were no preferred dividends. What was the
2014 earnings per share?
$17.50 $7.50 $75.00 $131.25
3 Selling a long-term asset is an
example of a(n)
operating activity.
investing activity.
financing activity.
noncash investing and financing
activity.
4 Dividends declared are reported
on which of the following statements?
Income Statement
Statement of Retained Earnings
Balance Sheet
Statement of Financial Position
5 Which of the following
describes the normal balance and classification of the Accumulated Depreciation
account?
Debit, asset Credit, liability Credit, asset Debit, expense
6 The accrual accounting term
used to indicate recording an expense before paying cash for the item is
deferral. accrual. depreciation. prepayment.
7 LBJ Company recorded the
following events involving a recent purchase of merchandise.
Received goods for $200,000,
terms 2/10, n/30.
Returned $5,000 of the shipment
for a credit due to damaged goods.
Paid $2,500 for freight in.
Paid the invoice within the
discount period.
As a result of these events, the
company's merchandise inventory
increased by $193,600. increased by $195,950. increased by $197,500. increased by $193,500.
8 In periods of rising prices,
which of the following inventory methods results in the highest gross profit
figure?
FIFO LIFO Average cost method Cannot be determined based on the
information given
9 On a classified balance sheet,
prepaid expenses are classified as
current liabilities. long-term liabilities. current assets. Prepaid expenses do not belong on the
Balance Sheet.
10 Which of the following is an
internal control procedure?
Control environment
Comparisons and compliance
monitoring
Promote operational efficiency
Encourage employees to follow
company policies
11 Your friend, Ellen, has hired
you to evaluate the following internal control procedures.
Explain to your friend whether
each of the numbered items below is an internal control strength or weakness.
You must also state which internal control procedure relates to each of the
internal controls.
For the weaknesses, you also need
to state a recommendation for improvement.
(1) The cashier counts the total
receipts and reconciles the receipts with the cash register total.
(2) Electronic documents are
password-protected.
(3) The accountant is completely
independent of the sales department.
(4) Invoices are not numbered.
(5) Large purchase orders must be
approved by a manager.
Spellchecker
12 Please prepare the following
journal entries. Indicate which account should be debited and which account
should be credited, along with the dollar amount of the debit and credit.
(1) Investors invest $70,000 in
exchange for 1,000 shares of common stock.
(2) Company paid a utility bill
for $2,000.
(3) The unadjusted balance of the
Supplies account is $5,200 and the total cost of supplies on hand is $4,000.
(4) Company received $5,000 for
services performed.
(5) The company needs to record
$15,000 for depreciation.
13 The following items are taken
from the financial statements of Ashe Company for 2012:
Equipment $100,000 Accounts Receivable 12,000 Accounts Payable 9,000 Cost of Goods Sold 72,000 Utilities Expense 11,000 Depreciation Expense 17,000 Insurance
Expense 9,000 Common
Stock 200,000 Dividends 12,000 Rent Expense 3,000
Note Payable (due 2014) 40,000 dvertising Expense 14,000 Prepaid Insurance 17,000 Retained Earnings (beginning) 44,000 Accumulated Depreciation 50,000 Salaries Expense 60,000 Salaries Payable 3,500 Net sales 205,000 Supplies 4,000 Supplies
Expense 5,000
Instructions
Calculate the net income.
(b) Calculate the balance of
Retained Earnings that would appear on a balance sheet at December 31, 2012.
(c) Calculate the gross profit
percentage.
14 The following items are taken
from the financial statements of BGS Company for 2012:
Cash $500,000 Accounts Receivable 200,000 Supplies 70,000 Accounts Payable 147,300 Unearned Service Revenue 18,000 Equipment, net of accumulated depreciation
212,000 Common Stock 500,000 Retained Earnings 12/31/2011 78,300 Long-term debt 142,400 Service revenue 240,000 Cost
of Goods Sold 72,000 Rent expense 36,000 Supplies
expense12,000 Insurance
expense 24,000
Instructions
(a) Please create a classified
balance sheet in good form for the year ended 2012. (25 points)
(b) Please calculate the current
ratio.
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