Keller Fi 504 Midterm

Topics: Balance sheet, Inventory, Generally Accepted Accounting Principles Pages: 8 (1720 words) Published: April 15, 2012
1. (TCO A, B, C) External users want answers to all of the following questions except: (Points : 3)         Is the company earning satisfactory income?
       Will the company be able to pay its debts as they come due?        Did the company use a budget to plan its expenses?        How does the company compare in profitability with competitors?|

2. (TCO C) Debt securities sold to investors that must be repaid at a particular date some years in the future are called: (Points : 3)         accounts payable.
       notes receivable.
       taxes payable.
       bonds payable.|

3. (TCO C) Buying and selling products are examples of: (Points : 3)         operating activities.
       investing activities.
       financing activities.
       delivering activities.|

4. (TCO A) The best definition of assets is, the (Points : 3)         cash owned by the company.
       collections of resources belonging to the company and the claims on these resources.        Owners' investment in the business.
       resources belonging to a company that offer future benefits to the company.|

5. (TCO C) Edwards Company recorded the following cash transactions for the year: 

Paid $45,000 for salaries.
Paid $20,000 to purchase office equipment.
Paid $5,000 for utilities.
Paid $2,000 in dividends.
Collected $75,000 from customers.

What was Edwards' net cash provided by operating activities? (Points : 3)         $25,000

6. (TCO A) In a classified balance sheet, assets are usually classified as: (Points : 3)         current assets; long-term assets; property, plant, and equipment; and tangible assets.        current assets; long-term investments; property, plant, and equipment; and common stocks.        current assets; long-term investments; and tangible assets.        current assets; long-term investments; property, plant, and equipment; and intangible assets.|

7. (TCO A) Which of the following is not considered an asset? (Points : 3)         Equipment
       Accounts receivable

8. (TCO A) These are selected account balances on December 31, 2007.

-Land (location of the corporation's office building) $200,000 -Land (held for future use) 300,000
-Corporate Office Building 1,200,000
-Inventory 400,000
-Equipment 900,000
-Office Furniture 200,000
-Accumulated Depreciation 600,000

What is the total NET amount of property, plant, and equipment that will appear on the balance sheet? (Points : 3)         $1,900,000

9. (TCO B) For 2010, Ford Corporation reported net income of $15,000; net sales $200,000; and average share outstanding 6,000. There were no preferred stock dividends. What was the 2010 earnings per share? (Points : 3)         $2.33


10. (TCO B) Liondale Corporation had beginning retained earnings of $2,292,000 and ending retained earnings of $2,499,000. During the year, they issued common stock totaling $141,000. There were no dividends issued. What was their net income for the year? (Points : 3)         $207,000

       $ 66,000

11. (TCO D) On March 1, 2010, Dillon Company hires a new employee who will start the work on March 6. The employee will be paid on the last day of each month. Should a journal entry be made on March 6? Why or why not? (Points : 3)         Yes, the company is now obligated to pay the employee, thus that event must be recorded on March 6.        No, hiring an employee is an important event; however, it is not an economic event that should be recorded on March 6.        Yes, failure to record the event on March 6 would cause the financial statements to be misleading.        No, the journal entry should be made on March 1 which is the date of hiring.|

12. (TCO D) The left side of an account is: (Points : 3)         blank....
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