Question : 41. If the quick ratio has been increasing over the past : 1228551

 

41. If the quick ratio has been increasing over the past several years, which of the following would cause the ratio to continue to increase? 
A. An increase in accounts payable.
B. An increase in inventories.
C. An increase in short-term borrowings.
D. A decrease in taxes payable.

42. Chavez Chocolates had a quick ratio of 1.74 at year-end 2009. Which of the following would cause the ratio to decrease during 2010? 
A. A decrease in both cash and marketable securities.
B. An increase in both cash and marketable securities.
C. An increase in current assets that exceeded the increase in current liabilities.
D. Current assets as a percentage of total assets increased while current liabilities as a percentage of total liabilities and stockholders’ equity decreased.

43. Which of the following statements is correct? 
A. Social Security tax is employer paid only.
B. The pay period always ends in conjunction with the company’s fiscal year end.
C. Many fringe benefits such as sick and vacation leave benefits should be recognized when the employee earns the benefit not when they take the leave.
D. Unemployment taxes are paid by the employee only.

44. Which of the following describes an accrued liability? 
A. It is an expense that has been both incurred and paid.
B. It is an expense that has been incurred but not yet paid.
C. It is an expense that has been prepaid but not yet consumed.
D. It is a liability where the cash flow has taken place but the revenue has yet to be earned.

45. Miranda Company borrowed $100,000 cash on September 1, 2010, and signed a one-year 6%, interest-bearing note payable. Assuming no adjusting entries have been made during the year, the required adjusting entry at the end of the accounting period, December 31, 2010, would be which of the following?
   
A. Option A
B. Option B
C. Option C
D. Option D

46. Miranda Company borrowed $100,000 cash on September 1, 2010, and signed a one-year 6%, interest-bearing note payable. The interest and principal are both due on August 31, 2011. Assume that the appropriate adjusting entry was made on December 31, 2010 and that no adjusting entries have been made during 2011. The required journal entry to pay the note on August 31, 2011 would be which of the following?
   
A. Option A
B. Option B
C. Option C
D. Option D

47. Landseeker’s Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2011. In 2010, cost of goods sold was $258 million and accounts payable was $72 million. What was Landseeker’s accounts payable turnover ratio in 2011? 
A. 4.23
B. 4.15
C. 4.04
D. 3.91

48. Which of the following transactions will decrease the accounts payable turnover ratio? 
A. Using cash to pay an accounts payable balance.
B. Selling inventory on account.
C. Selling inventory for cash.
D. A customer returning inventory purchased on account.

49. Which of the following statements incorrectly describes the accounts payable turnover ratio? 
A. A high ratio indicates that suppliers are being paid in a timely manner.
B. It increases when inventory is sold on account regardless of the sales price.
C. It can be manipulated by aggressively paying off accounts payable at year-end.
D. It is not affected by the choice of inventory accounting methods.

50. On September 1, 2010, Donna Equipment signed a one-year, 8% interest-bearing note payable for $50,000. Assuming that Donna Equipment maintains its books on a calendar year basis, how much interest expense that should be reported in the 2011 income statement? 
A. $2,667
B. $4,000
C. $1,333
D. $3,000

2011 interest expense ($2,667) = Amount borrowed ($50,000) ? Interest rate (8%) ? Number of months borrowed relative to a year (8 ? 12)

 

 

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