Quiz 1

New Harvest Bakery acquired all of the outstanding common stock of Red Rock Bakery for $68,000 in cash. The fair values of Red Rock's assets and liabilities were as follows: Current Assets - $30,000 Proplerty, Plant, and equipment - $56,000 Other assets - $6,000 Current Liabilities - $16,000 Long-term liabilities - $22,000 Calculate the amount of goodwill

$14,000

A company has $125,000 in retained earnings at the beginning of the year and $137,000 at the end of the year. During the year it declared and paid dividends of $16,000. What was the amount of net income for the year?

$28,000 Quiz 2

Southlake Properties had sales of $40 million and net income of $2 million in FY2019. The firm declared and paid a dividend of $1.5 million. At the beginning of FY2019 the balance for retained earnings was $4 million. What amount should appear for retained earning in Southlake's FY2019 year end balance sheet?

$4.5 Million Quiz 2

Common Stock - $500,000 Paid-in capital in excess of Par - $40,000 Retained Earnings - $190,000 Treasury Stock - $20,000 Balances are as of year-end. What is the stockholder's equity?

$710,000 Quiz 2

Which one of the following statements is true regarding inventory cost flow assumptions? A. A company may use more than one costing method concurrently B. A company must comply with the method specified by an industry standard C. A company must use the same method for domestic and foreign operations D. A company may never change its inventory costing method once it has chosen a method E. A company must always use the same costing method for financial reporting purposes as it uses for tax purposes

A. Quiz 2

If capital projects are _______ the NPV and the IRR methods should result in _________ "accept" or "reject" decisions. A. independent, consistent B. mutually exclusive, consistent C. neither statement above is a true statement

A. Quiz 4

If you want to determine the amount of capital expenditures a company made during the previous year, you should find the company's most current _________ and look under the caption ________. A. cash flow statement; cash flow investments B. income statement; capital expenses C. balance sheet, long-term assets D. cash flow statement, cash flow from operations E. cash flow statement, cash flow from financing activities

A. Quiz 4

Which ONE of the following is NOT a technique for evaluating and selecting projects from a pool of investment proposals? A. replacement investment B. discounted payback period C. internal rate of return D. net present value

A. Quiz 4

A firm reports the following income statement items for FY2017: sales of $60,550,000; income tax of $1,744,000; operating expenses of $10,115,000; cost of goods sold of $34,025,000; and interest expense of $750,000. The firm also paid $947,250 in dividends in FY2017. What is the amount of the firms EBIT? A.$16,410,000 B. $18,154,000 C. $14,935,000 D. $7,775,000 E. $15,462,750

A. Quiz 1

In accrual basis accounting: A. Revenues are recognized when earned rather than when the cash is collected. B. Expenses are recognized when paid rather than when incurred. C. Frequently revenues are earned or recognized when merchandise is acquired for resale by paying the cost. D. Cash collected less cash distributed equals net income E. None of the above are correct.

A. Quiz 1

The form of business organization that is legally separate from its owners is a: A. Corporation B. Partnership C. Limited Partnership D. Proprietorship E. None of these choices are correct

A. Quiz 1

Which ONE of the following is NOT an example of a current asset? A. Intangible assets B. Pre-paid expenses C. Cash D. Marketable securities E. Accounts receivable

A. Quiz 1

Which of the following would not be a liability on a Balance Sheet? A. Depreciation B. Deferred revenue C. Accounts payable D. Wages payable E. Dividends Payable

A. Quiz 1

Which one of the following is not included as an expense on the Income Statement? A. Dividend expense B. Marketing expenses C. Cost of goods sold D. Depreciation expense E. Bad debt expense

A. Quiz 1

Which statement best describes the accounting equation? A. Resources of the firm equal the creditor's and owner's claim to those resources. B. The change in retained earnings equals net income less dividends. C. Revenue and expense transactions must equal over time. D. Financing activities equal investing and operating activities. E. Assets equals liabilities minus owners equity

A. Quiz 1

If bonds are issued at a premium, the stated interest rate is: A. Higher than the market rate of interest B. Lower than the market rate of interest C. Too low to attract investors D. Adjusted to a higher rate of interest E. Zero

A. Quiz 2

Which of the following pairs of accounts are usually current liabilities? A. income taxes payable, unearned revenue B. accounts payable, accounts receivable. C. prepaid expenses, wages payable D. additional paid in capital, deferred tax liability E. notes receivable, bonds payable.

A. Quiz 2

Which of the following does NOT represent a cash outflow from the firm? A. Depreciation B. Taxes C. Interest payments D. Dividends E. Salaries

A. Quiz 1

Who owns the retained earnings of a publicly held firm? A. Common stockholders B. Management C. Bondholders D. The IRS E. Nobody

A. Common stockholders Quiz 2

Which one of the following is the least liquid current asset? A. Pre-paid expenses B. Accounts receivable C. Marketable Securities D. Inventory E. Cash

A. Pre-paid Expenses Quiz 2

Which of the following are NOT depreciated (choose all that apply): A. buildings B. goodwill C. land D. factory equipment E. accounts receivable F. marketable securities G. office equipment

B, C, E, F. Quiz 2

Rays Resturants is evaluating multiple projects for future investment. Project A is a remodel of their upscale Taqueria concept which has an estimated IRR of 22%. Project B is the creation of a new dining concept - Latin-Canadian Fusion with a flair - which has an IRR of 18%. If Ray's decided to do both projects their expected IRR on the combined investment would be: A. less than 18% B. between 18% and 22% C. exactly 18% D. exactly 22% E. more than 22%

B. Quiz 4

A Balance Sheet dated December 31, 2019 represents the financial position of the firm: A. From January 1, 2019 to December 31, 2019 B. Only for December 31, 2019 C. From the time the firm began business to December 31, 2019 D. None of the above are correct.

B. Quiz 1

During periods of declining prices for inventory purchases, which cost flow assumption produces the highest reported gross margin? A. FIFO B. LIFO C. Weighted Average D. Specific Identification

B. Quiz 3

A firm reports the following income statement items for FY2019: sales of $60,550,000; income tax of $1,744,000; operating expenses of $10,115,000; cost of goods sold of $34,025,000; and interest expense of $750,000. The firm also paid $947,250 in dividends in FY2019. What is the amount of the firms EBIT? A. $18,154,000 B. $16,410,000 C. $14,935,000 D. $7,775,000 E. $15,462,750

B. $16,410,000 Quiz 3

Financial statements must be consolidated if: A. a company uses the equity method of accounting B. a company owns more than 20% of another company C. a company owns more than 50% of another company D. mark to market accounting is used E. a company owns between 20% and 50% of another company

C. Quiz 2

Accrual accounting recognizes revenue A. when the order is signed and is accompanied by cash. B. when the order for goods or services is signed C. when the goods have been transferred or services have been rendered D. when the cash is receive E. according to the matching principle

C. Quiz 2

The direct write-off approach for uncollectble accounts: A. uses the aging method B. Uses the credit sales method C. matches the expense of uncollectible accounts with the related revenues D. uses contra-revenue account to write off uncollectible receivables E. is consistent with the matching principle

C. Quiz 2

A balance sheet shows: A. Dividends distributed to stockholders B. Operating expenses for the period C. Earnings per share for the period D. Claims owners have against the assets fo the firm E. Sales revenue

D

Which of the following are intangible assets? A. accounts receivable and notes receivable B. equipment and tools C. office supplies and accounts receivable D. patents and goodwill. E. land and equipment

D. Quiz 2

Which of the following items should be capitalized? A. routine repairs, new roof, new equipment B. wage expenses for janitors C. new roof, new equipment, cleaning of the office D. New roof, new equipment, and equipment installation costs E. software development costs, new product development costs, and maintenance fees

D. Quiz 2

Which of the following is a contra-asset account? A. Paid in capital in excess of par B. Bonds payable C. Income taxes expense D. Copyrights E. Treasury stock F. Accumulated depreciation G. pre-paid expenses

F. Quiz 2

(True/False). A clean financial statement audit opinion will state that the financial statements are guaranteed to be accurate.

False

(True/False). Dividends paid to a firm's stockholders, both preferred and common, are tax deductible to the paying firm.

False. Quiz 2

(True/False). A firm's balance sheet provides a representation of the current market value for the company.

False. Quiz 1

The income statement represents a snapshot of the firm's account balances at a point int time. (True/False).

False. Quiz 1

(True/False). Current assets are usually listed on the Balance Sheet in order of liquidity.

True Quiz 2