Question :
41. Which of the following best describes operating revenues? A. They increases in : 1228492
41. Which of the following best describes operating revenues?
A. They are increases in net assets as a result of peripheral transactions.
B. They are decreases in net assets as a result of ongoing operations.
C. They are increases in net assets as a result of ongoing operations.
D. They are decreases in net assets as a result of peripheral transactions.
42. Which of the following transactions will result in an increase in operating income as of the date of the transaction?
A. The sale of plant and equipment at a gain.
B. Collection of cash from a customer for services to be provided at a later date.
C. Providing a service to a customer on account.
D. The receipt of cash dividends from an investment.
43. Which of the following expenses has no impact on operating income?
A. Income tax expense
B. Cost of goods sold
C. Depreciation expense
D. Rent expense
44. Which of the following statements is false?
A. An expense is a cost incurred to generate revenues.
B. Expenses are reported on the income statement as they are incurred.
C. Revenues are reported on the income statement as they are earned.
D. Revenues result in an increase in net assets, net income, and contributed capital.
45. The following information has been provided by Hable Company:
Advertising expense $9,900;
Interest expense $3,700;
Rent expense $12,000;
Loss on sale of plant and equipment $5,700;
Cost of goods sold $21,300;
Depreciation expense $7,100.
How much were Hable’s operating expenses?
A. $50,300
B. $54,000
C. $59,700
D. $43,200
46. Smith Corporation has provided the following information:
Error! Hyperlink reference not valid.Error! Hyperlink reference not valid. Cash sales totaled $125,000.
? Credit sales totaled $279,000.
? Cash collections from customers for services yet to be provided totaled $38,000.
? An $11,000 gain from the sale of plant and equipment occurred.
? Interest income totaled $7,700.
How much were Smith’s operating revenues?
A. $404,000
B. $411,700
C. $442,000
D. $460,700
47. Lantz Company has provided the following information:
? Cash sales totaled $255,000.
? Credit sales totaled $479,000.
? Cash collections from customers for services yet to be provided totaled $88,000.
? A $22,000 loss from the sale of plant and equipment occurred.
? Interest income was $7,700.
? Interest expense was $19,900.
? Cost of goods sold was $336,000.
? Rent expense was $36,000.
? Salaries expense was $49,000.
? Other operating expenses totaled $79,000.
How much was Lantz’s operating income?
A. $221,800
B. $322,000
C. $199,800
D. $234,000
48. Lantz Company has provided the following information:
? Cash sales totaled $255,000.
? Credit sales totaled $479,000.
? Cash collections from customers for services yet to be provided totaled $88,000.
? A $22,000 loss from the sale of plant and equipment occurred.
? Interest income was $7,700.
? Interest expense was $19,900.
? Cost of goods sold was $336,000.
? Rent expense was $36,000.
? Salaries expense was $49,000.
? Other operating expenses totaled $79,000.
How much was Lantz’s income before income taxes?
A. $553,800
B. $465,800
C. $487,800
D. $531,800
49. Which of the following correctly describes the impact of collecting cash from customers for services to be provided in the future?
A. Assets and stockholders’ equity increase.
B. Assets and revenues increase.
C. Assets and liabilities increase.
D. Assets and operating income increase.
50. Colby Corporation has provided the following information:
Operating revenues were $199,700.
Operating expenses were $111,000.
Interest expense was $9,200.
Gain from sale of plant and equipment was $3,300.
Dividend payments to Colby’s stockholders were $7,700.
Income tax expense was $36,000.
How much was Colby’s net income?
A. $39,100
B. $48,300
C. $52,700
D. $46,800
