29) Team Shirts, Inc. recognized $13,880 in salaries and wages expense for the quarter. At the beginning of the quarter, the balance in Salaries Payable was $2,300. At the end of the quarter, the balance was $3,425. How is the accounting information for these items reported on the statement of cash flows using the indirect method? 30) Use the following information from Artizan, […]
59.Notes payable due within one year are usually shown in the A. Current Assets section of the balance sheet. B. Current Liabilities section of the balance sheet. C. Other Expenses section of the income statement. D. Long-Term Liabilities section of the balance sheet. 60.Upon collection of the amount due on a $6,000 face value, 90-day note with interest at 10 […]
21.An investment that costs $40,000 will produce annual cash flows of $12,000 for a period of 4 years. Given a desired rate of return of 10%, the investment will generate a (Do not round your PV factors and intermediate calculations. Round your answer to nearest whole dollar): A. positive net present value of $38,038. B. positive net present value of $1,962. C. negative net […]
Multiple Choice Questions 39.A statement of cash flows is not intended to assist investors in evaluating: A. Reasons for differences between the amount of net income and net cash flow from operations. B. The company’s ability to meet its obligations and to pay dividends. C. Non-cash aspects of investing and financing activities. D. The profitability of business operations. 40.The “bottom line” […]
51. _____ measures the amount of sales generated from a particular level of investments in fixed assets. A. Fixed asset ratio B. Fixed asset turnover ratio C. Asset ratio D. Fixed asset ratio E. Inventory turnover ratio 52. Which of the following could affect the fixed asset turnover ratio? A. a firms often invests in fixed assets several periods before these assets generate sales from products manufactured in their […]
116. A corporation has 40,000 shares of $25 par value stock outstanding. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be A. 120,000 shares B. 40,000 shares C. 80,000 shares D. 13,333 shares 117. When a corporation completes a 3-for-1 stock split A. the ownership interest of current stockholders is decreased B. the market price per share of the […]
51. The measurement of the assets and liabilities on the balance sheet also determines the measurement of ______________. A. additional paid-in-capital B. common stock C. retained earnings D. total shareholders’ equity E. par value 52. Corporate laws within many jurisdictions require that, within _____, firms distinguish between amounts received from owners and amounts generated by operations which the firm has not distributed to owners. A. cash B. shareholders’ equity […]
95.A list of all the accounts in the accounts receivable ledger with their balances and the total is a: A. Schedule of accounts. B. Controlling account. C. Schedule of accounts receivable. D. Subsidiary ledger. E. Special journal. 96.The Accounts Payable account in the general ledger is: A. A controlling account for the subsidiary accounts payable ledger. B. The account that controls the purchases journal. C. The subsidiary account to the purchases journal. […]
During Bisbee’s first year of business, office supplies were purchased for cash in the amount of $4,300 and the amount was debited to supplies expense. At the end of the first year, the physical count indicated that $425 of supplies was unused. How much should be reported on the balance sheet for office supplies? a. $4,300 b. $3,875 c. $4,725 d. $425 […]
161. Rusty Co. sells two products, X and Y. Last year Rusty sold 5,000 units of X’s and 35,000 units of Y’s. Related data are: Unit Selling Price Unit Variable Unit contribution Product Price Cost Margin X $110.00 $70.00 $40.00 Y 70.00 50.00 $20.00 Assuming that last year’s fixed costs totaled $675,000. What was Rusty Co.’s break-even […]
131. The assets of a company total $700,000; the liabilities, $200,000. What are the claims of the owners?
A. $900,000.
B. $700,000.
C. $500,000.
D. $200,000.
E. It is impossible to determine unless the amount of this owners' investment is known.
132. On June 30 of the current year, the assets and liabilities of Phoenix, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owner's equity as of July 1 of the current year?
A. $8,300
B. $13,050
C. $20,500
D. $31,100
E. $40,400
133. Assets created by selling goods and services on credit are:
A. Accounts payable.
B. Accounts receivable.
C. Liabilities.
D. Expenses.
E. Equity.
134. An exchange of value between two entities is called:
A. The accounting equation.
B. Recordkeeping or bookkeeping.
C. An external transaction.
D. An asset.
E. Net Income.
135. Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?
A. Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase.
B. Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect.
C. Assets, $30,000 decrease; liabilities, $30,000 increase; equity, no effect.
D. Assets, no effect; liabilities, $30,000 decrease; equity, $30,000 increase.
E. Assets, $30,000 decrease; liabilities, no effect; equity $30,000 decrease.
136. How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed?
A. +$10,000 accounts receivable, -$10,000 accounts payable.
B. +$10,000 accounts receivable, +$10,000 accounts payable.
C. +$10,000 accounts receivable, +$10,000 cash.
D. +$10,000 accounts receivable, +$10,000 revenue.
E. +$10,000 accounts receivable, -$10,000 revenue.
137. Zion Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation?
A. Assets increase by $75,000 and expenses increase by $75,000.
B. Assets increase by $75,000 and expenses decrease by $75,000.
C. Liabilities increase by $75,000 and expenses decrease by $75,000.
D. Assets decrease by $75,000 and expenses decrease by $75,000.
E. Assets increase by $75,000 and liabilities increase by $75,000.
138. Viscount Company collected $42,000 cash on its accounts receivable. The effects of this transaction as reflected in the accounting equation are:
A. Total assets decrease and equity increases.
B. Both total assets and total liabilities decrease.
C. Total assets, total liabilities, and equity are unchanged.
D. Both total assets and equity are unchanged and liabilities increase.
E. Total assets increase and equity decreases.
139. If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period, the assets of the business must have:
A. Decreased $105,000.
B. Decreased $45,000.
C. Increased $30,000.
D. Increased $45,000.
E. Increased $105,000.
140. If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period, equity in the business must have:
A. Increased $22,000.
B. Decreased $22,000.
C. Increased $89,000.
D. Decreased $156,000.
E. Increased $156,000.
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