Fi504 Midterm

Topics: Double-entry bookkeeping system, Revenue, Income statement Pages: 17 (2557 words) Published: October 17, 2012
1.Question :(TCO A, B, C) External users want answers to all of the following questions except:

Student Answer: 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?
Instructor Explanation:Chapter 1 page 6

Points Received:3 of 3

2.Question :(TCO C) Debt securities sold to investors that must be repaid at a particular date some years in the future are called:

Student Answer: accounts payable.

notes receivable.

taxes payable.

bonds payable.

Instructor Explanation:Chapter 1 page 9

Points Received:3 of 3

3.Question :(TCO C) Which activities involve putting the resources of the business into action to generate a profit?

Student Answer: Delivering




Instructor Explanation:Chapter 1 page 10

Points Received:3 of 3

4.Question :(TCO A) The best definition of assets is, the

Student Answer: 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.
Instructor Explanation:Chapter 1 page 9

Points Received:3 of 3

5.Question :(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?

Student Answer: $25,000




Instructor Explanation:$75,000 - 45,000 - 5,000 = $25,000 Chapter 1 page 10

Points Received:3 of 3

6.Question :(TCO A) A current asset is:

Student Answer: the last asset purchased by a business.

an asset which is currently being used to produce a product or service.
usually found as a separate classification in the income statement.
expected to be converted to cash or used in the business within a relatively short period of time.
Instructor Explanation:Chapter 2 page 49

Points Received:3 of 3

7.Question :(TCO A) Which of the following should not be classified as a current asset?

Student Answer: Supplies

Short-term Marketable securities

Prepaid insurance that will expire next year.

A Note Receivable that will mature after 21 months.

Instructor Explanation:Chapter 2 page 49

Points Received:3 of 3

8.Question :(TCO A) These are selected account balances on December 31, 2010.

-Land (location of the corporation's office building) $50,000 -Land (held for future use) 75,000
-Corporate Office Building 300,000
-Inventory 100,000
-Equipment 225,000
-Office Furniture 50,000
-Accumulated Depreciation 150,000

What is the total NET amount of property, plant, and equipment that will appear on the balance sheet?

Student Answer: $650,000




Instructor Explanation:Gross cost of plant assets utilized - accumulated depreciation Chapter 2 page 51

Points Received:0 of 3

9.Question :(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?

Student Answer: $2.33




Instructor Explanation:$15,000/6,000 = $2.50
Chapter 2 page 56

Points Received:3 of 3
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Midterm Essay
  • Midterm Essay
  • midterm Research Paper
  • Midterm Essay
  • Midterm Essay
  • Essay on Midterm
  • Essay about midterm
  • Essay on Midterm

Become a StudyMode Member

Sign Up - It's Free