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.
3. (TCO C) Buying and selling products are examples of: (Points : 3) operating 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
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
-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
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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