Financial Accting Book quiz 4-6
Credit card discounts are reported on the income statement as: A) a contra revenue. B) a contra asset. C) a selling expense. D) both (A) and (C).
A
Information that is accurate, unbiased, and verifiable is called A) relevant information. B) reliable information. C) consistent information. D) comparable information
A
A customer, who is given credit terms of 2/10, n/60, purchased goods with a retail price of $600. The amount charged to the customer's account receivable was: A) $612.00. B) $600.00. C) $588.00. D) $601.20.
B
Information that is accurate, unbiased, and verifiable is called A) relevant information. B) reliable information. C) consistent information. D) comparable information
B
Net income was $450,000. Beginning and ending stockholders' equity was $4,000,000 and $4,800,000, respectively. What was the return on equity (ROE)? A) 9.4% B) 10.23% C) 11.25% D) 10.41%
B
The following procedures are followed by a company cashier: count money in the cash drawer, compare the cash count with recorded daily sales, make notations of any differences on a preprinted form that is forwarded, along with the cash, to the accounting department. These procedures: A) will provide adequate internal control over cash. B) are unacceptable, since they do not follow good internal control practices. C) are acceptable, since they adhere to internal control practices. D) follow the broad principles of internal control.
B
When using the indirect method of preparing the "cash flows from operating activities" section of a statement of cash flows, a net increase between the beginning and ending balances of net accounts receivable will A) be added to net income. B) be deducted from net income. C) not be considered. D) be shown as deferred revenues
B
When using the indirect method of preparing the "cash flows from operating activities" section of a statement of cash flows, a net increase between the beginning and ending balances of net accounts receivable will A) be added to net income. B) be deducted from net income. C) not be considered. D) be shown as deferred revenues.
B
A corporation issued for cash 100,000 shares of its $0.01 par value common stock for $450,000. Which of the following is the correct journal entry to record this transaction? A) Cash, debit, $450,000; Common Stock, credit, $450,000 B) Cash, debit, $450,000; Common Stock, credit, $45,000; Paid-in Capital, credit, $405,000 C) Cash, debit, $450,000; Common Stock, credit, $1,000; Paid-in Capital, credit, $449,000 D) Cash, debit, $450,000; Paid-in Capital, credit, $450,000
C
A customer used a credit card to pay for $400 of services. The credit card company charged 2.5% for its services. How much did the company record as a deposit to its checking account as result of the sales transaction? A) $400.00 B) $410.00 C) $390.00 D) $388.00
C
Consider the following: Financial statement item Classification A.Inventory Current asset B.Intangible assets Noncurrent asset C.Accrued expenses Current asset D.Bonds payable Long-term liabilities Which line of the chart shows an incorrect financial-statement classification? A) Line A B) Line B C) Line C D) Line D
C
Net profit margin is 0.10. Asset turnover is 0.125. Financial leverage is 1.6. Compute the return on equity. A) 1.5% B) 1.0% C) 2.0% D) 2.5%
C
The proper treatment on the bank reconciliation of NSF checks returned with the statement is to A) add them to the book balance of cash. B) add them to the bank balance of cash. C) deduct them from the book balance of cash. D) deduct them from the bank balance of cash.
C
The unadjusted debit balance of the Allowance for Doubtful Accounts account is $350. Uncollectible accounts are estimated to be $15,800, based on an analysis of a schedule of aging of accounts receivable. After recording the appropriate journal entry for the bad debts expense, what will be the balance of the Bad Debt Expense account? A) $15,800 B) $15,450 C) $16,150 D) $350
C
Which of the following is NOT an operating expense? A) Salaries and Benefits expense B) Rent expense C) Interest expense D) Depreciation expense
C
Which of the following is not one of the three items classified as "accumulated other comprehensive income" on the income statement? A) foreign currency translation adjustments B) unrealized gains and losses from securities transactions C) gains and losses on the sale of productive (or long-term) assets D) minimum pension liability adjustment
C
You received an invoice that shows credit terms of 2/10, n/60. What does the number 10 in the credit terms refer to? A) the number of days in the credit period. B) the amount of sales discount available. C) the number of days in the discount period. D) the amount of the trade discount.
C
An increase in average total assets, with all else remaining unchanged, will A) decrease financial leverage. B) increase asset turnover. C) decrease net profit margin. D) increase financial leverage
D
The proper treatment on the bank reconciliation of outstanding checks is to A) add them to the book balance of cash. B) add them to the bank balance of cash. C) deduct them from the book balance of cash. D) deduct them from the bank balance of cash.
D
The unadjusted credit balance of the Allowance for Doubtful Accounts account is $650. Uncollectible accounts are estimated to be $15,600, based on an analysis of a schedule of aging of accounts receivable. After recording the appropriate journal entry for the bad debts expense, what will be the adjusted balance of the Allowance for Doubtful Accounts? A) $650 B) $16,250 C) $14,950 D) $15,600
D
Which of the following are reported on the income statement as "nonrecurring items?" A) extraordinary items B) discontinued operations C) cumulative effect of changes in accounting methods D) all of the above
D
