bus302lab financial accounting

Which financial statement is prepared first? a. Balance sheet b. Income statement c. Retained earnings statement d. Statement of cash flows e. None of the options listed

b. Income statement

Johnny's Car Repair Shop started the year with total assets of $60,000 and total liabilities of $40,000. During the year the business recorded $100,000 in car repair revenues, $55,000 in expenses, and dividends of $10,000. The net income reported by Johnny's Car Repair Shop for the year was A. $35,000. B. $45,000. C. $20,000. D. $90,000. E.none of the options listed

B. $45,000

In the annual report, where would a financial statement reader find out if the company's financial statements give a fair depiction of its financial position and operating results? A. Notes to the financial statements B. Management discussion and analysis section C. Balance sheet D. Auditor's report E. None of the options listed

D. Auditor's report

Which accounting assumption assumes that an enterprise will continue in operation long enough to carry out its existing objectives and commitments? A. Monetary unit assumption B. Economic entity assumption C. Time period assumption D. Going concern assumption E. None of the options listed

D. going concern assumption

A company began the accounting period with $50,000 in owner's capital, ended with $75,000 in owner's capital, and the owner withdrew $30,000 during the period for personal use. What was the company's net income or loss for the period? a. $55,000 net income b. $30,000 net loss c. $5,000 net loss d. $5,000 net income e. none of the options listed

a. $55,000 net income

If the single amount of $900 is to be received in 3 years and discounted at 6%, its present value is: (Round to the nearest dollar.) 6%, 3 years annually Factor Present value of $1 -0.840 Future value of $1 -1.191 Present value of an annuity - 2.673 Future value of an annuity - 3.184 a. $756. b. $849. c. $780. d. $846. e. None of the options listed

a. $756. 900 * 0.840 = 756

What is the formula to calculate earnings per share? a. Net Income ÷ Common Stock Outstanding b. Market Price ÷ Common Stock Outstanding c. Gross Profit ÷ Total Stock Outstanding d. Market Price ÷ Total Stock Outstanding e. None of the options listed

a. Net Income ÷ Common Stock Outstanding

The deferred income tax liability: a. Represents income tax payments that are deferred until future years because of temporary differences between GAAP rules and tax accounting rules. b. Is a contingent liability. c. Can result in a deferred income tax asset. d. Is never recorded. e. Is recorded whether or not the difference between taxable income and financial accounting income is permanent or temporary.

a. Represents income tax payments that are deferred until future years because of temporary differences between GAAP rules and tax accounting rules.

Accountants do not attempt to measure the change in a plant asset's market value during ownership because a. of the historical cost assumption. b. plant assets cannot be sold. c. losses would have to be recognized. d. it is management's responsibility to determine fair values. e. none of the options listed

a. of the historical cost assumption.

A company normally sells it products for $20 per unit, which includes a profit margin of 25%. However, the selling price has fallen to $15 per unit. This company's current inventory consists 200 units purchased at $16 per unit. Replacement cost has now fallen to $13 per unit. Calculate the value of inventory at the lower of cost or market. a. $2,550. b. $2,600. c. $2,700 d. $3,000. e. $3,200.

b. $2,600

At December 31, 2001, before any year-end adjustments, Brant Company's Prepaid Insurance account had a balance of $1,900. It was determined that $1,500 of the Prepaid Insurance had expired. The adjusted balance for Prepaid Insurance for the year would be a. $1,500. b. $400. c. $2,225. d. $1,125. e. None of the options listed

b. $400. 1,900 - 1,500 = 400 Correct.

Based on the following data, what is the amount of current assets? Accounts payable................................$31,000 Accounts receivable............................ 57,000 Cash.............................................................. 15,000 Intangible assets.................................... 50,000 Inventory..................................................... 69,000 Long-term investments........................ 80,000 Long-liabilities..........................................100,000 Marketable securities............................ 40,000 Notes payable........................................... 28,000 Plant assets................................................670,000 Prepaid expenses (assets).............................................................1,000 a. $142,000 b. 182,000 c. $113,000 d. $112,000 e. None of the options listed

b. 182,000 57,000+15,000+69,000+40,000+1,000 = 182,000

What type of activity is the following - "Sold 2,000 shares of a company's own common stock for cash?" a. Operating Activity b. Financing Activity c. Investing Activity d. Noncash Transaction e. None of the options listed

b. Financing Activity

Which of the following is not an activity listed in the statement of cash flows? a. Investing Activities b. Funding Activities c. Operating Activities d. Financing Activities e. None of the options listed

b. Funding Activities

Which of the following would not result in unearned revenue? a. Rent collected in advance from tenants b. Services performed on account c. Sale of season tickets to football games d. Sale of two-year magazine subscriptions e. None of the options listed

b. Services performed on account

working capital is a measure of a. consistency b. liquidity c. profitability d. solvency e. none of the options listed

b. liquidity

If beginning capital was $25,000, ending capital is $37,000, and the owner's withdrawals were $23,000, the amount of net income or net loss for the period was: a. net loss of $35,000 b. net income of $35,000 c. net income of $14,000 d. net loss of $14,000 e. none of the options listed

b. net income of $35,000

Stockholders' equity can be described as claims of a. creditors on total assets. b. owners on total assets. c. customers on total assets. d. debtors on total assets. e. none of the options listed

b. owners on total assets.

Net present value is negative when a. the present value of cash inflows is greater than the present value of cash outflows. b. the present value of cash outflows is greater than the present value of cash inflows. c. the future value of cash inflows is greater than the present value of cash outflows. d. the present value of cash outflows is greater than the future value of cash outflows. e. none of the options listed

b. the present value of cash outflows is greater than the present value of cash inflows.

The necessity of making adjusting entries relates mostly to the a. economic entity assumption. b. time period assumption. c. going concern assumption. d. monetary unit assumption. e. none of the options listed

b. time period assumption.

A company purchased a POS cash register on January 1 for $5,400. This register has a useful life of 10 years and a salvage value of $400. What would be the depreciation expense for the second-year of its useful life using the double-declining-balance method? a. $ 500. b. $ 800. c. $ 864. d. $1,000. e. $1,080.

c. $ 864.

Johnny's Car Repair Shop started the year with total assets of $60,000 and total liabilities of $40,000. During the year the business recorded $100,000 in car repair revenues, $55,000 in expenses, and dividends of $10,000. Stockholders' equity at the end of the year was ? a. $45,000 b. $65,000 c. $55,000 d. $35,000 e. None of the options listed

c. $55,000

Which of the following journal entries is correct for an issuance of 1,000 shares of 10 par value common stock for 25 per share? a. Cash 25,000 Common Stock 25,000 b. Common Stock 25,000 Cash 25,000 c. Cash 25,000 Common Stock 10,000 Premium on Common Stock 15,000 d. Common Stock 10,000 Premium on Common Stock 15,000 Cash 15,000

c. Cash 25,000 Common Stock 10,000 Premium on Common Stock 15,000

Which of the following is an example of a deferral? a. Accruing year-end wages b. Recognizing revenues earned but not yet recorded c. Recording prepaid rent d. Recognizing expenses incurred but not yet recorded e. None of the options listed

c. Recording prepaid rent

Resources owned by a business are referred to as a. stockholders' equity. b. liabilities. c. assets. d. revenues. e. none of the options listed

c. assets.

The difference between the balance of a plant asset account and the related accumulated depreciation account is termed a. market value. b. contra asset. c. book value. d. liability. e. none of the options listed

c. book value.

Liabilities of a company are owed to a. debtors. b. owners. c. creditors d. stockholders. e. none of the options listed

c. creditors

measure of profitability is the a. current ratio. b. debt to total assets ratio. c. return on assets ratio. d. working capital. e. none of the options listed

c. return on assets ratio.

Deciding whether to record a sale when the order for services is received or when the services are performed is an example of a a. classification issue. b. valuation issue. c. recognition issue. d. communication issue. e. none of the options listed

c. recognition issue.

Westec Corporation has the following accounts on their financial statement. Calculate net income. Professional Fee Income 31,000 RentExpense7,000 Advertising Expense 10,000 Insurance Expense 6,000 Accumulated Depreciation 1,000 Interest Expense 1,000 Commission Expense 4,000 Dividends 2,000 a. 9,000 b. 0 c. 1,000 d. 3,000 e. None of the options listed

d. 3,000 31,000 - (7,000+10,000+6,000+1,000+4,000) = 3,000

The purchase of an office building by issuing long-term notes payable should be reported as a a. cash outflow in the financing section of the statement of cash flows. b. cash outflow in the investing section of the statement of cash flows. c. cash outflow in the operating section of the statement of cash flows. d. noncash investing and financing activity. e. none of the options listed

d. noncash investing and financing activity.

Retained earnings is a. the stockholders' claim on total assets. b. equal to cash. c. equal to revenues. d. the cumulative amount of net income kept in the corporation for future use. e. none of the options listed

d. the cumulative amount of net income kept in the corporation for future use.

An obligation of a business that represents the claims of others against the assets of the business is called: a. An Asset. b. An Expense. c. A Revenue. d. An Equity. e. A Liability.

e. A Liability.

What is the formula to calculate the profit margin? a. Gross Profit ÷ Sale b. Net Income ÷ Sales c. Gross Profit ÷ Net Income Incorrect. d. Net Income ÷ Gross Profit e. None of the options listed

e. None of the options listed (Net Income / Revenue) or (Net Profit / Sales)