Final Review Combined F

127 Questions | Total Attempts: 88

SettingsSettingsSettings
Final Review Combined F - Quiz

Questions and Answers
  • 1. 
    If a bond is sold at par value for $1,000, has a life of 5 years, and a contract rate of 8%, how much will have to be paid to redeem the bond on its maturity date?
    • A. 

      $ 80

    • B. 

      $1,000

    • C. 

      $920

    • D. 

      $400

  • 2. 
    The ratio that is computed by taking total liabilities and dividing them by total equity is called the:
    • A. 

      Quick ratio

    • B. 

      Debt to equity ratio

    • C. 

      Reinvested assets ratio

    • D. 

      Debt ratio

  • 3. 
    While the balance sheet is a "snapshot" of the business, the income statement has been compared to a "home video" because it
    • A. 

      Shows the company's performance for a particular date in time

    • B. 

      Shows the company's performance for a period of time

    • C. 

      Depicts the operations of the company on a precise date

    • D. 

      None of these answers is correct

  • 4. 
    The relationship among the accounting elements found on the income statement can be represented by the following equation:
    • A. 

      Revenues - expenses = net loss

    • B. 

      Revenues - expenses = net income

    • C. 

      Answers A and B are both correct

    • D. 

      Assets - liabilities = net income

  • 5. 
    The excess of the rewards over the sacrifices for a given time period is the monetary reward of doing business, which is also known as:
    • A. 

      Net earnings

    • B. 

      Earnings

    • C. 

      Net profit

    • D. 

      All of these answers are correct.

  • 6. 
    Gross margin is an important item shown on the income statement because:
    • A. 

      Gross margin is not shown on a multiple-step income statement

    • B. 

      Sales minus gross margin equals net income

    • C. 

      Gross margin is the revenue generated from the sale of tangible products

    • D. 

      It highlights the relationship between sales revenue and cost of goods sold

  • 7. 
    The distributions to owners of proprietorships and partnerships are also called:
    • A. 

      Dividends

    • B. 

      Drawings

    • C. 

      Sketches

    • D. 

      Net income

  • 8. 
    The main accounting elements that make up the income statement are                  and        .
    • A. 

      Expenses; net income

    • B. 

      Assets; owners' equity

    • C. 

      Revenues; expenses

    • D. 

      Assets; liabilities

  • 9. 
    The following information is available for a company: Net sales, $750,950; Cost of goods sold, $330,418; total expenses, $214,775; average total assets for the year, $459,785. What is the company's gross profit margin ratio(round your answer to two decimal places)?
    • A. 

      45%

    • B. 

      27%

    • C. 

      56%

    • D. 

      The ratio cannot be computed from the information given.

  • 10. 
    During the month of May, $400 of services were performed by Belk & Rich, Inc. If Belk & Rich received $100 during May and $300 during June and uses the cash basis of accounting, when and how much revenue should be recognized?
    • A. 

      $100 in May; $300 in June

    • B. 

      $300 in May; $100 in June

    • C. 

      $0 in May; $400 in June

    • D. 

      $400 in May; $0 in June

  • 11. 
    If the JJ Company performs services for a client in the amount of $770 during June and collects the money from the client during July under a cash basis accounting system, when and how much revenue should JJ Company recognize in June and July?
    • A. 

      $385 during June; $385 during July

    • B. 

      $0 during June; $770 during July

    • C. 

      $770 during June; $770 during July

    • D. 

      $770 during June; $0 during July

  • 12. 
    The Corner Dress shop buys $200 of dresses during May. Corner Dress pays $150 of that amount during May and the remainder in June. During June, Corner Dress buys $300 of dresses paying for $100 during June and the remainder in July. If the Corner Dress Shop uses a cash basis accounting system, how much should the shop recognize as an expense during May?
    • A. 

      $ 50

    • B. 

      $150

    • C. 

      $200

    • D. 

      $250

  • 13. 
    Baaker Auto Body Repair uses electricity costing $200 during February and pays for them in March. How much will Baaker recognize under an accrual basis system of accounting?
    • A. 

      $200 revenue in March

    • B. 

      $200 revenue in February

    • C. 

      $200 expense in February

    • D. 

      $200 expense in March

  • 14. 
    Under accrual accounting we recognize revenue when it is:
    • A. 

      Earned, as long as payment for it occurs in the same time period

    • B. 

      Earned, no matter when payment for it is received

    • C. 

      Received, no matter when it is earned

    • D. 

      Received, as long as payment for it occurs in the same time period

  • 15. 
    If Sanford and Son's Auto Repair acquires supplies costing $200 during February and pays for the supplies in March, how much will Sanford and Son recognize under a cash basis system of accounting?
    • A. 

      $200 revenue in March only

    • B. 

      $200 expense in February only

    • C. 

      $200 expense in March only

    • D. 

      $200 revenue in February only

  • 16. 
    The Corner Dress shop uses $200 in advertising during May. Corner Dress pays $150 of that amount during May and the remainder in June. During June, Corner Dress uses $300 in advertising paying for $100 during June and the remainder in July. If Corner Dress uses an accrual basis accounting system, how much should the shop recognize as an advertising expense during May?
    • A. 

      $ 50

    • B. 

      $200

    • C. 

      $150

    • D. 

      $250

  • 17. 
    What is the relationship between a company receiving cash and recognizing revenue?
    • A. 

      All of these answers are correct.

    • B. 

      Cash is received after the revenue has been earned.

    • C. 

      Cash is received before the revenue has been earned.

    • D. 

      Cash is received at the time revenue is earned.

  • 18. 
    Accrual accounting attempts to establish a relationship between revenues and expenses. This relationship is called:
    • A. 

      Recognition

    • B. 

      Realization

    • C. 

      Matching

    • D. 

      Articulation

  • 19. 
    The Ladybug Dress shop uses $200 in advertising during May. Ladybug pays $150 of that amount during May and the remainder in June. During June, Ladybug uses $300 in advertising paying for $200 during June and the remainder in July. If Ladybug uses an accrual basis accounting system, how much should the shop recognize as an advertising expense during June?
    • A. 

      $150

    • B. 

      $300

    • C. 

      $250

    • D. 

      $ 50

  • 20. 
    A company can adopt a policy in which it resolves to pay a set amount as a dividend each year as long as it has:
    • A. 

      Both sufficient retained earnings and sufficient cash each year to pay the amount

    • B. 

      Sufficient net income for the current year to cover the amount of the dividend payment

    • C. 

      The approval of the stockholders

    • D. 

      None of these answers is correct

  • 21. 
    Adam's Chili Bowl and Space Burgers purchases a grill for $5,000. The company expects to use it for four years. If the company thinks that it can sell the grill at the end of the fourth year for $500, how much is the residual value of the grill?
    • A. 

      $4,500

    • B. 

      $ 500

    • C. 

      $1,250

    • D. 

      $1,125

  • 22. 
    The first step in the accrual matching process is:
    • A. 

      To determine in which income statement period a company should recognize a particular revenue

    • B. 

      To determine which expenses helped to generate specific revenue

    • C. 

      To match those expenses paid in the same period with the revenues received in cash during the same period

    • D. 

      To recognize only those expenses actually paid in the same period as the revenue they helped to generate

  • 23. 
    In accounting, an asset's depreciable base is calculated as:
    • A. 

      Asset cost - residual value

    • B. 

      Asset cost + residual value

    • C. 

      Asset cost × residual value

    • D. 

      Asset cost ÷ residual value

  • 24. 
    An inflow of resources that comes to the business when it delivers services to a customer is a(n):
    • A. 

      Liability

    • B. 

      Asset

    • C. 

      Expense

    • D. 

      Revenue

  • 25. 
    The basic formula used by a company to compute its income tax is:
    • A. 

      Taxable income × tax rate

    • B. 

      Sales × tax rate

    • C. 

      Cost of goods sold × tax rate

    • D. 

      Total assets × tax rate

Back to Top Back to top