111. On August 9, Pierce Company receives a $8,500, 90-day, 8% note from customer Eric Simms as payment on his account. What entry should be made on the maturity date assuming the maker pays in full?  A. Debit Notes Receivable $8,500; debit Interest Receivable $170; credit Sales $8,670. B. Debit Cash $8,670; credit Interest Revenue $170; credit Notes Receivable $8,500. C. Debit Cash $8,628; credit Interest Revenue $128; […]

  91. A depreciation method in which a plant asset’s depreciation expense for a period is determined by applying a constant depreciation rate to the asset’s beginning-of-period book value is called:  A. Book value depreciation. B. Declining-balance depreciation. C. Straight-line depreciation. D. Units-of-production depreciation. E. Modified accelerated cost recovery system (MACRS) depreciation. 92. A depreciation method that produces larger depreciation expense during the early years of an asset’s life and smaller expense […]

  111.Which of the following would not be a proper application of the concept of materiality by Millridge Corporation?    A. Transactions involving small dollar amounts are not recorded in Millridge’s accounting records.   B. Estimates of supplies on hand are used to determine the supplies expense for the period.   C. On a monthly basis, utility bills are expensed in the month paid, rather than in the month […]

11) A $300 receipt of cash on account was recorded as a $500 debit to cash and a $500 credit to accounts receivable. This error will cause: A) cash to be overstated $200. B) cash to be understated $500. C) cash to be understated by $800. D) accounts receivable to be overstated $500. 12) Recording service revenue on account as a cash transaction will cause: […]

  11) Foodiez Inn is a fast-food restaurant that sells burgers and hot dogs in a 1980s environment. The fixed operating costs of the company are $10,000 per month. The controlling shareholder, interested in product profitability and pricing, wants all costs allocated to either the burgers or the hot dogs. The following information is provided for the operations of the company:   BurgersHot Dogs Sales […]

  102.A product sells for $30 per unit and has variable costs of $18 per unit. The fixed costs are $720,000. If the variable costs per unit were to decrease to $15 per unit, fixed costs increase to $900,000, and the selling price does not change, break-even point in units would:    A. Increase by 20,000. B. Equal 6,000. C. Increase by 6,000. D. Decrease by 20,000. E. Not change. 103.Forrester […]

    71. The expected average rate of return for a proposed investment of $600,000 in a fixed asset, with a useful life of four years, straight-line depreciation, no residual value, and an expected total net income of $240,000 for the 4 years, is: A. 40%B. 20%C. 60%D. 24%   72. The amount of the average investment for a proposed investment of $90,000 in a fixed asset, with a useful life of […]

  81. Carrie Company sold merchandise with an invoice price of $1,000 to Underwood, Inc., with terms of 2/10, n/30. Which of the following is the correct entry to record the payment by Underwood Inc., within the 10 days if the company uses the periodic inventory system and the gross method to record purchases?     A. Option A B. Option B C. Option C D. Option D 82. Iris Company has […]

    43. A 30-day note dated October 15, would be due on November  A. 14. B. 15. C. 16. D. 17.   44. A one-month note dated October 15, would be due on November  A. 14. B. 15. C. 16. D. 17.   45. A 20-day note dated October 15, would be due on November  A. 4. B. 5. C. 6. D. 7.   46. Which of the following statements is correct?  A. To be considered a negotiable instrument, a promissory […]

  74.What effect will the declaration and distribution of a stock dividend have on net income and cash flows?      A. Option A B. Option B C. Option C D. Option D 75.The issuance of a stock dividend will    A. not affect total equity. B. increase retained earnings. C. decrease paid-in capital. D. decrease total assets. 76.A reason often given for a corporate stock split is:    A. to protect the interest of creditors. B. to reduce […]