1.The concept that an item is not large enough to influence the users of a financial statement is
A, cost effectiveness
b. Materiality
c. reliability
d. relvance
e. none
2. The quality that allows quantitative assessment of the similarities and differences among enterprises is known as
a.comparability
b. consistency
c. reliability
d. relevance
e. none
3. Profit margin and asset turnover can be combined to create
a. return on assets
b return on equity
c. earnings per share
d. price earnings ratio
e. none
4.which of the following increases cash
a. issuance to long term debt
b. acquisition of property plant and equipment
c. payment of divdends
d decrease in short term debt
e. none
5. if a company pays out more than the income tax incurred as shown in the income tax liability decrease, the effect on cash is a
a. decrease
b. increase
c.no effect
d. none of the above
6. which of the following increases cash
a. increase in inventory
b. increase in accounts receivable
c. increase in the accounts payable
d. none
7.Grayson is saving for a used car. He needs $14,000. How much he invest at 3% annual interest rate to have $ 14,000 in two years? Round to the nearest dollar.
a. 12,983
b.12,417
c. 13,720
d. 13.196*
e, none
8.ellen fetter invested $5,000 in a savings account that paid 5% interest compounded annually. She kept the account for three years. At the end of the three years, ellen will have approimentely
a. $6,103
b. $5,444
c.5,414
d.5,788*
e. none
9. Which of the following is a snapshot of the financial position of a company
a. Balance sheet
B.income statement
C. statement of retained earnings
D. cash flow statement
e. none
10.which of the following rations is not useful for comparison purposes?
a. return on assets
b. price earnings ratio
c. return on equity
d. earnings per share
e. none*
11.elsie Jackson is saving for a down payment on a condo. She needs 20,000. How much must she invest in a savings account that pays 5% annually to have the 20,000 in 8years? Round to the nearest dollar.
a. 13,206
b $12,983
c. 13,616
d. 13,537
e. none
12.which of the following is added to net income to calculate cash flow?
a. depreciation
b. increase in accounts receivable
c. increase in inventory
D. decrease in accounts payable
e. none
13. which of the following increase cash?
a.issuance of long term debt
b. acquisition of property plant and equipment
c. payment of divdends
d. decrease in short term debt
e. none
14. profit margin and asset turnover can be combined to create
a. return on assets
b. return on equity
c. earnings per share
d. price earnings ratio
e. none
15.Bart is saving for college. He needs 20,000 for the first year. How much must he invest at a 5% annual interest rate to have 20,000 in five years? Round to the nearest dollar?
a. 14.982
b.15,016
c.15,023
d 15,671
e none
16.which of the following are added to net income to determine cash flow from operating activities?
a. depreciation
b. amortization
c. both a and b*
d. gain on asset sale
e. none
17. which of the following ratios is coverage ratio
a. return on assets
b. return on equity
c. earnings per share
d. times interest earned
e. none
18. ellis industries is a large, multinational company located in the us. Ellisâs financial statements are in us dollars. This GAAP is known as
a. monetary concept
b. economic entity
c.conservatism
d. matching
e. none
19.ginger Ellison invested $10,000 in a bank account at offshore bank. The account pays 3% interest compounded annually. How much will Ginger have in five years? Round to the nearest dollar?
a. 11,593
b. 11,108
c. 10,213
d. 12,619
e. none
20.which ratio is wall streetâs favorite
Inventory turnover
B. receivables turnover
Current
D. price- earnings*
E. none
21. ginger Ellison invested $10,000 in a bank account at offshore bank. The account pays 3% interest compounded annually. How much will Ginger have in five years? Round to the nearest dollar?
a. 11,593
b. 11,108
c. 10,213
d. 12,619
e. none
22.information that can make a difference to the decision at hand is considered to be
a. a reliable
b. a comparable
c. relevant
d. understandable
c. none
23. Blackson incorporated signed a 3 year lease for the building that blackson occupies and paid the first 6 months in advance. The account that should be debited is
a. prepaid expenses
b. cash
c. building
d. accounts payable
e. none
24.right-hand entries increase
a. asset accounts
b owners equity accounts
c. liabilities
d. both b and c
e. none
25.The quality that ensures that information is reasonably free from error is
a. reliability
b. relevant
c. understandability
d. consistent
e. none
26. a customer pays on an account receivable. The account that should be credited is
a. inventory
b. cash
c. accounts payable
d. accounts receivable
e. none
27. which of the following ratios measures liquidity?
a. current
b. payout
c. gross margin
d. asset turnover
e. none
28. Jesse Ellis invested $4,000 in a savings account that paid 6% interest compounded annually for 6 years. At the end of 6 years, Jesse will have approximately.
A. 5,103
b. $5,674
c. 5,506
d.4,903
e.none
29. which of the following is not a functional area of accounting?
a. Managerial accounting
b. tax accounting
c.economic accounting*
d. financial accounting
e. none
30.John Vincent invested $10,000 in a savings account. The account pays 4,5% annual interest. John will have much in the account at the end of 10 years? Round to the nearest dollar.
a. 15,530
b. 14,984
c. 16,010
d. 16,311
e none
31.capital stock is a part of which of the following accounts?
a. ownersâ equity
b. liabilities
c. current assets
d. long term assets
e. none
32.The stock market values a company based on which of the following accounts?
a. assets
b. liabilities
c. capital stock
d. retained earnings*
e none
33. The following accounts are listed in order of liquidity
a. current assets
b. current liabilities
c. both a and b
d. long term assets
e. none
34. When shares are sold from one shareholder to another in the open market: the following accounts is impacted
a. capital stock
b. retained earnings
c. long term liabilities
d. current assets
e. none*
35. The accounts that reflects the amount the owners have invested in the business is
a. capital stock
b. retained earnings
c. long term liablilties
d. long term assets
d. none
36. Karen Quigley is saving for new car. The car cost $22,000. How much must Karen invest in a savings account that pays 4% annually to have the $22,000 in three years? Round to the nearest dollar.
a. 20,147
b. 19,107
c. 19,558
d.19,328
e. none
37. Agr corporation signed a two-yr lease for the building that the company occupies. The account that should be debited is
a. prepaid expense
b.cash
c. accounts payable
d. building
e. none
38. left-hand entries DECREASE
a. asset accounts
b. liability accounts
c. ownerâs equity accounts
d. both b and c*
e.none
39. which of the following is a source of cash? (question 42 different choices)
a. issuance of long-term debt
b. increase in inventories
c. decrease in accounts payable
d. increase in accounts receivable
e. none
REPEAT Different choice 40. which of the following increases cash?
Issuance of long-term debt
Acquition of property plant and equipment
Cpaymentof divdends
D. decrease in short term debt
none
41.The ratio that shows how much in excess of current earnings investors are willing to pay for company stock is.
A payout
b.current
c, price-earnings*
d.return on equity
e none
42. which of the following is a source of cash?
A increase in accounts recievable
b. increase in inventories
c. increase in accounts payable
d. none*
43. A gain on the sale of an asset is subtracted from net income to determine cash flow from operating activities because of
a. double counting
b. asset sales require a basis
c. losses are cash flow neutral *
d. none
44. which of the following is an expense allocation scheme?
a. cost of goods sold
b. amortization
c. Depreciation
D. Band C*
e. none
45.The account that reflects the amount the owners have invested in the business is
a. capital stock
b. retained earnings
c. long term liabilies
d. long term asset
e. none
46. which of the following statements represents a flow concept?
a. balance sheet
b. income statement*
c. statement of retained earnings
d. inventory statement
e. none
47. left- hand entries INCREASE
a. asset accounts
b. liability accounts
c. ownersâ equity accounts
D. both B and C
e. none
48.which of the following ratios measures operating performance?
a. price-earnings
b. current
c. receivable turnover*
d. operating cycle
e. none
49. credit sales increase
a. cash
b. land
c. ownersâ equity
d. accounts payable
e. none*
50.Projecting inventory levels for next year would be an example of
a. financial accounting
b managerial accounting*
c. tax accounting
d. none
51. investments representing long term holdings of securities would appear on the balance sheet as
a. long term liabilities
b long-term asset
c. capital stock
d. retained earnings
e. none*
52. which organization is recognized today as the authoritative voice of accounting rules and principles?
a. sec
b. aICPA
c.FASB *
d.AAA
e. none
53. which account below would be credited to record this transaction: purchase merchandise for resale on credit
a. inventory
b. cash
c. accounts payable *
d.accounts receivable
e. none
54. Formis, Inc. estimates the useful life of each asset purchased and depreciates the asset over the useful life. This GAAP is known as
a. Monetary concept
b. economic entity
c. going concern
d. matching*
e. none
55. which of the following is one gauge of the companyâs ability to meet its short-term obilgations?
a. gross margin
b. asset turnover
c. profit margin
d. working capital*
e. none
