Multiple Choice Questions   211. Which of the following is characteristic of liabilities, rather than of equity? (More than one answer may be correct.)  A. The obligation matures. B. Interest paid to the provider of the capital is deductible in the determination of taxable income. C. The capital providers’ claims are residual in the event of liquidation of the business. D. The capital providers normally have the right […]

    91. Accounting for just-in-time operations requires fewer transactions because A. large batches of inventory are combined in a smaller number of transactions.B. costs are accumulated in one department and then transferred to the next department.C. combined material and conversion costs are transferred to finished goods.D. costs are transferred from department to department allowing for better controls in costs.   92. Which of the following results in fewer transactions in just-in-time […]

  55.Which of the following statements regarding accounting information systems is not true?     A.Accounting information systems collect and process data from transactions and events. B.Accounting information systems organize data in useful forms. C.Accounting information systems are not subject to internal control policies. D.Accounting information systems are useful to effective decision making. E.Accounting information systems communicate information to business decision makers. 56.Which of the following […]

  71. Slickers, Inc. had the following capital structure during 2010: Preferred stock, 7%, $50 par value, 1,000 shares issued and outstanding with dividends in arrears for 2008 and 2009. Common stock, $100 par value, 2,000 shares issued and outstanding. The total dividends declared and paid during 2010 totaled $25,000. How much of the dividend is paid to the preferred stockholders during 2010 assuming the preferred […]

    125. Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $15,500.  If the issuing corporation redeems the bonds at 98.5, what is the amount of gain or loss on redemption? A. $500 lossB. $15,500 lossC. $15,500 gainD. $500 gain   126. Bonds Payable has a balance of $1,000,000 and Premium on Bonds Payable has a balance of $7,000.  If the issuing corporation redeems […]

108.Which of the following is not considered in computing net cost of purchases?   a. Freight paid on goods shipped to customers b. Purchases returns and allowances c. Freight paid on purchased goods d. Purchases       109.Which of the following is necessary for computing cost of goods sold but not necessary for computing the cost of goods available for sale?   a. Freight-in […]

  Objective 11.3   1) Relevant costs in a make-or-buy decision of a part include ________. A) setup overhead for the manufacture of the product using the outsourced part B) currently used manufacturing capacity that has alternative uses C) annual plant insurance costs that will remain the same D) management consultant fees to restructure the organization framework of the company   2) Which of the […]

    91. The adjustment for changes in operating working capital accounts depends in part on a firm’s rate of growth. Rapidly growing firms usually experience significant increases in.  A. accounts receivable, only. B. inventories, only. C. accounts receivable and inventories. D. neither accounts receivable, nor inventories. E. none of the above   92. The adjustment for changes in operating working capital accounts depends in part on a firm’s rate of growth. […]

    71.Internal control systems are:    A.Developed by the Securities and Exchange Commission for public companies.   B.Developed by the Small Business Administration for non-public companies.   C.Developed by the Internal Revenue Service for all U.S. companies.   D.Required by Sarbanes-Oxley (SOX) to be documented and certified if the company’s stock is traded on an exchange.   E.Required only if a company plans to engage […]

  11. Which of the following is a factor involved in communicating useful information?  A. Attributes of the users B. Purpose for which the information will be used C. Process by which the information is analyzed D. All of the other answers are correct. 12. Current financial reporting standards assume that users of accounting information:  A. Have a reasonably informed knowledge of business. B. Have an expert’s understanding of economic and financial events […]