acc504 only 14 mcqs devry

acc504 only 14 mcqs devry

Question # 00097614 Posted By: steve_jobs Updated on: 08/28/2015 03:16 AM Due on: 09/12/2015
Subject Accounting Topic Accounting Tutorials:
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acc504 only 14 mcqs devry

When deciding what form business to create, an advantage of selecting the corporate form of business is____________. (Points : 5)

simple to establish
reduced taxes
owners maintain control
limited liability to stockholders

Question 2.2.(TCO A) Which one of the following statements is correct with regard to dividends?(Points : 5)

Dividends are increased by credits.
Dividends are subtracted on the income statement.
Common stock dividends are required to be paid.
Dividends reduce stockholders’ equity.

Question 3.3.(TCO A, B)

Below are some of the account balances for PNK Company:

Cash

$7,000

Accounts Receivable

$12,000

Prepaid Insurance

$2,000

Accounts Payable

$4,000

Wages Payable

$1,500

Notes Payable

$500

Common Stock

$50,000

Dividends

$2,500

Revenues

$35,000

Expenses

$25,000

What will PNK Company show for total debits?

(Points : 5)

$48,500
$46,500
$21,000
$23,500

Question 4.4.(TCOs B and E) Which of the following statements is incorrect with regard to accrual accounting?(Points : 5)

Accrual accounting is consistent with the matching principle.
Accrual accounting does not record expenses until they are paid.
Accrual accounting is more complex than cash basis accounting.
Accrual accounting is required by GAAP.

Question 5.5.(TCO D) If ending inventory of the current year is understated(Points : 5)

Cost of goods sold for the current year will be understated
Gross profit for the current year will be unaffected
Gross profit for the current year will be understated
Net income for the current year will be overstated

Question 6.6.(TCO A, E) Johnson Company, a calendar year company, purchased a delivery vehicle for $21,000 on 1/1/14. License and insurance costs for the vehicle will be $700 per year. The salvage value is $3,500 and it has an estimated useful life of 5 years. The vehicle will be depreciated using the double declining balance method of depreciation. What will the depreciation expense be in year one?(Points : 5)

$8,400
$7,000
$4,200
$3,500

Question 7.7.(TCOs D and G) When the market rate of interest is equal to the stated rate of interest on the bond, the bond will require _____.(Points : 5)

a debit to Discount on Bonds Payable
a credit to Discount on Bonds Payable
a credit to Bonds Payable
a debit to Bonds Payable

Question 8.8.(TCO C) Accounts receivable arising from sales to customers amounted to $50,000 and $45,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $150,000. Based on these transactions, the cash flows from operating activities to be reported on the statement of cash flows would be _____.(Points : 5)

$195,000
$145,000
$115,000
$155,000

Question 9.9.(TCO F) A company has Preferred stock, 8%, $10 par, 30,000 shares authorized and issued. The balance in the Preferred Stock account is $300,000. This means that:(Points : 5)

Preferred stockholders receive dividends before the common stockholders.
Dividends on preferred stock are always paid even if the board of directors does not declare the dividend.
Preferred stock provides voting rights.
All corporations issue preferred stock.

Question 10.10.(TCO F) Horizontal analysis(Points : 5)

involves calculating a percentage change from one period to the next
can be the basis of comparative analysis or trend analysis
is useful in studying the growth or decline of a company over time
all of the above are correct

Question 11.11.(TCO F) Which one of the following is typically analyzed via financial statement ratio analysis?(Points : 5)

The design of a new product
The internal control failure rate
The leverage of the firm
The effectiveness of a marketing campaign

Question 12.12.(TCO F) Creditors are usually most concerned with analyzing _____.(Points : 5)

the company stock price
turnover
liquidity
profitability

Question 13.13.(TCO F) DuPont analysis measures which of the following?(Points : 5)

Liquidity
Leverage
Turnover
Profitability

Question 14.14.(TCO G) Which factors below impact the present value of a bond?(Points : 5)

The dollar amounts to be received
The market interest rate
The time to maturity of the bond
All of the above

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