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11 Aug 2019

Which of the following is a potential source of capital for a company to invest in long-term assets?

Select one:

A. Bank loans

B. Net Income from past years

C. Issuing additional common stock

D. Issuing bonds

E. All of the above

The time value of money dictates that money received today will be worth ______ in the future than it is worth today?

Select one:

A. It depends on the discount.

B. More

C. Less

D. The Same

If the cash method of accounting is used rather than the accrual method, which of the following adjustments must be made to Net Income to arrive at after-tax cash flows?

Select one:

A. Change in Accounts Receivable

B. Change in Accounts Payable

C. Change in Expense Liability accounts

D. Depreciation expense

E. None of the above

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Nelly StrackeLv2
14 Aug 2019

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1.

Because of the time value of money, a company would prefer toreceive a payment due to them:

Select one:

A. As early as possible

B. As late as possible

C. It does not make a difference when the payment isreceived

D. It depends on the discount rate

E. None of the above

2.

Which of the following items are impacted by taxes whenconsidering Net Present Value?

Select one:

A. Cash receipts from future sales

B. Depreciation expense

C. Cash outlays for future expenses

D. Cash receipts for disposal of fully-depreciated assets

E. All of the above

3.

Which of the following items are impacted by taxes whenconsidering Net Present Value?

Select one:

A. Cash receipts from future sales

B. Depreciation expense

C. Cash outlays for future expenses

D. Cash receipts for disposal of fully-depreciated assets

E. All of the above

Questions 1 – 4: Use the following information to answer the next 4 questions:
Dr. Kaplan, M.D., maintains the accounting records of Kaplan Klinic on an accrual basis. In 2017, Kaplan Klinic reported Net Income of $186,388. The following information relates to the beginning and ending balances of Dr. Kaplan’s accrual accounts:

January 1, 2017

December 31, 2017

Accounts Receivable

$16,758

$ 31,374

Unearned Service Revenue

5,152

8,812

Accrued Expenses Payable

6,354

4,068

Prepaid Expenses

4,214

7,094

Below is a partially completed schedule that converts Dr. Kaplan’s Net Income (accrual basis) to “Excess of Cash Collected over Cash Disbursed’ for the year 2017. For each item, select the correct number to complete the schedule.

Net Income (accrual) $186,388

1.Change in Accounts Receivable ________

A -$16,758

B $14,616

C -$14,616

D $31,374

E None of the above

2.Prepaid Expenses ________

A $4,214

B $7,094

C $2,880

D -$2,880

E None of the above

1) Which of the following items would be reported net of taxesafter income from continuing operations?

Select one:

a. Gain or loss on the sale of property.

b. Loss due to a factory strike.

c. Interest expense.

d. Gain or loss on the sale of a major segment of theentity.

2)

Given the following list of accounts, calculate TotalAssets:

Accounts Receivable

$ 5,000

Capital Stock

20,000

Cash

14,300

Equipment

15,400

Fees Earned

44,400

Miscellaneous Expense

18,200

Rent Expense

4,150

Retained Earnings

6,550

Wages Expense

13,900

Select one:

a. $54,700

b. $26,550

c. $79,100

d. $34,700

3)

Which of the following is NOT associated with accrual basisaccounting?

Select one:

a. Income statement.

b. Matching principle.

c. Statement of cash flows.

d. Revenue recognition principle.

4)

Which of the following is an example of an intangible asset?

Select one:

a. Trademark

b. Timber

c. Equipment

d. Marketable securities

5)

Which of the following would be shown under the financingactivities section on the statement of cash flows?

Select one:

a. Cash received from customers.

b. The payment of cash to retire a long-term note.

c. Depreciation expense.

d. The proceeds from the sale of a building.

6)

A machine was purchased for $32,000 on April 1st. It has auseful life of 5 years and a residual value of $4,000. What is thedepreciation expense for the first fiscal year ending on December31st under the straight-line method?

Select one:

a. $1,400

b. $6,400

c. $4,200

d. $5,600

7)

The entry to record the signing of a contract to receiveinventory and make payment at a future date includes

Select one:

a. No debits or credits—just a memorandum.

b. A debit to cost of goods sold.

c. A credit to cash.

d. A debit to inventory.

8)

An inventory cost flow assumption is NOT needed for a productline

Select one:

a. If all of the inventory available for sale was purchased atthe same unit cost.

b. If all of the inventory looks the same.

c. If there is still some inventory on hand at the end of theyear.

d. If there is no beginning inventory carried over from theprevious accounting period.

9)

Fees received this period from customers for services to beperformed in the next accounting period, would be a(n)

Select one:

a. Expense disclosed on the statement of cash flows.

b. Revenue disclosed on the income statement.

c. Liability disclosed on the balance sheet.

d. Item not included on the financial statements until the nextaccounting period.

10)

Which of the following is TRUE of a corporation?

Select one:

a. They are incorporated with a national agency.

b. At least one owner has unlimited liability.

c. They are a separate taxable entity.

d. More than 70% of businesses are organized this way.

11)

The effects on the accounts of recording the cost of merchandisesold for cash using a perpetual inventory system include an

Select one:

a. Increase in Accounts Payable.

b. Increase in Merchandise Inventory.

c. Increase in Sales.

d. Increase in Cost of Goods Sold;

12)

Which of the following is NOT a limitation of externallyreported accounting information?

Select one:

a. The income statement contains atypical data due to the timingof the fiscal year end.

b. Accounting information relies on estimates.

c. Management has some discretion regarding the reportingclassification and choice of accounting measurement methods.

d. There is a hodge-podge of valuation techniques used on thefinancial statements.

13)

Given the following information regarding merchandise inventoryat the end of the fiscal year:

Ending inventory at cost $34,000

Ending inventory at market $33,400

Which of the following is correct?

Select one:

a. No journal entry should be made based upon the informationgiven.

b. Inventory should be reported on the balance sheet at$34,000.

c. Inventory should be reported on the balance sheet at$33,400.

d. A journal entry should be made to recognize a gain of$600.

14)

Which of the following describes the closing process when acompany has net earnings for the period?

Select one:

a. The Dividends account is debited for its balance.

b. The individual asset accounts are credited for theirbalances.

c. The individual expense accounts are debited for theirbalances.

d. The Income Summary account is debited for its balance.

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