MODELCOCEXAMS(

MULTI
PLECHOI
CES)

1.Theaccounti
ngcycl
estartswitht
he:
a.prepar
ati
onofledgeraccount
s c.analysi
sofbusinesstransact
ion
b.prepar
ati
onoftri
albalance d.preparat
ionofadjust
ingentri
es

2.Aft
erproperanaly
sis,thebusi
nesst
ransact
ioni
sr ecordedi
njournal
ina:
a.chronol
ogicalorder c.r andom or
der
b.rev
ersechronologicalor
der d.noneoft heabove

3.I
naccount
ing/bookkeeping,t
heterm posti
ngrefer
sto:
a.transf
erofinformati
onfrom ledgert
ot r
ial
balance
b.transf
erofentriesfr
om jour
nal t
oledger
c.preparat
ionoff i
nanci
alstat
ement sfr
om tri
albalance
d.noneoft heabov e

4.TheFastCompanypurchaseslandfor$12,000.Thepay mentismadebyissui
ng1,200
shar
esofcommonst ockof$10each.Thepr operjournalent
ryf
orthi
st r
ansacti
on
wouldbe:
a.Land12,000Dr.&Cash12, 000Cr.
b.Land12,000Dr.&Accountspay abl
e12,000Cr .
c.Commonst ock12,000Dr.&Land12, 000Cr .
d.Land12,000Dr.&Commonst ock12,000Cr .

5.Thecol
lect
ionorgroupofaccount
sinanor
gani
zat
ioni
sknownas:
a.generalj
ournal c.tri
albal
ance
b.generall
edger d.balancesheet

6.Theri
ghthandsi deofaT-
accounti
ster
medas:
a.debitside c.i
ncomesi de
b.creditside d.expenseside

7.Howwoul dy oupostt
hef ol
lowingj
ournalent
rytoledger?
Rentexpense$200Dr .
Cash$200Cr .
a.Cashaccountwoul dbedebi t
edby$200andr entexpenseaccountwouldbecr edi
ted
by$200.
b.Rentex penseaccountwoul dbedebi tedby$200andA/ C P.
A accountwoul dbe
credi
tedby$200.
c.Cashaccountwoul dbedebitedby$200andl ossaccountwouldbecreditedby$200.
d.Rentexpenseaccountwoul dbedebitedby$200andcashaccountwoul dbecr edi
ted
by$200.
8.Acr edi
tmaysi gnif
y:
1|
a.ani
Page
ncreaseinaliabil
i
tyaccount b.adecreaseinali
abil
ityaccount
 c.ani ncreaseinanassetaccount account
d.an i ncrease in an expense
9.Aform orstatementthatl
ist
sthetit
lesandbal
ancesofledgeraccount
satagi v
endate
i
sknownas:
a.balancesheet c.tr
ialbal
ance
b.incomest at
ement d.statementofret
ainedearni
ngs

10.
Ther ecei
ptofcashf r
om customer stowhom thegoodshav ealreadybeensol
don
creditwouldberecordedbya:
a.debittocashaccount&cr edi
ttoaccountspayableaccount
b.debittocashaccount&cr edi
ttoaccountsreceiv
ableaccount
c.debittoaccountspayableaccount&credi
ttocashaccount
d.debittoaccountsrecei
vableaccountandcreditt
ocashaccount

11.
Thet
ri
albalanceinwhi chtot
aldebit
sequal tot
al credi
tspr
ovidesapr oofthat
:
a.theledgerisi nbal
ance
b.thetransactionshavebeencor rect
lyanal
y zedandrecordedinproperaccount
s
c.thecor r
ectdebitandcreditbal
anceshav ebeencomput edforeachaccount
d.notransactionhasbeencompl etel
yomi t
teddur i
ngthepostingprocess

12.
Whi
chofthefol
lowingi
susedt ocomput
etheneti
ncomeforaspeci
fi
cper
iod?
a.Balancesheet c.Incomestat
ement
b.Statementofret
ainedearni
ngs d.Cashaccount

13.
Whichofthef
oll
owingishelpf
ulindet
ermi
ningt
hef
inanci
alposi
ti
onofthebusi
nessat
aspeci
fi
cdate?
a.statementofcashflows c.assetaccountsoft
hebusiness
b.statementofret
ainedearni
ngs d.balancesheet

14.
A stat
ementt hatshowst hechangesi
ntheamountofret
ainedearni
ngsdur i
nga
specif
icperi
odisknownas:
a.statementoffi
nancial
posi
tion c.stat
ementofret
ainedassets
b.statementofret
ainedear
nings d.stat
ementofret
ainedl
iabi
li
ties

15.
Theamountofr et
ainedear ni
ngsattheendofaper i
odisequal
to:
a.Ret ainedearni
ngsatt hebeginni
ngoftheper i
od+Di vi
dendsdeclar
ed–Net
i
ncome
b.Neti ncome+Di v
idendsdeclared–Retainedearni
ngsatthebeginni
ngoft he
peri
od
c.Ret ainedearningsatt hebeginningoftheperiod+Neti ncome– Di v
idends
declared
d.Ret ainedearningsatt hebeginningoftheperiod+Neti ncome– Oper ati
ng
expenses
2|
Page
16.
Whi
choneofthefol
l
owi
ngi
snotaf
ixedasset
?
a.Machinery c.Equi
pment
b. Pl
ant d.I
nventor
y

17.
Whi
choft
hefoll
owi
ngi
snotani
ntangi
bleasset
?
a.Goodwill c.Prepai
dexpenses
b.Patent d.Copyri
ght

18.
Whi
chofthef ol
l
owingfinancial
stat
ement
sisgener
all
yprepar edfi
rst
?
a.Bal ancesheet d.St atement of r
etai
ned
b.Stat ementofcashf l
ows earnings
c.Incomest at
ement

19.
ABCi sapr ofit
abl ecompany.Whichofthefoll
owingj ournalentr
ieswoulditmaket
o
closei
tsincomesummar yaccount
?
a.Cr editincomesummar yaccount&debitcapital
stockaccount
b.Debi tincomesummar yaccount&creditcapi
talstockaccount
c.Debi tincomesummar yaccount&creditret
ainedearningsaccount
d.Cr editincomesummar yaccount&debitret
ainedearningsaccount

20.
Whichifthefol
l
owingaccount
sisnotcl
osedt
oincomesummar yaccountatt
heendof
theaccounti
ngperi
od?
a.Accumul at
eddepreci
ati
on c.Depreci
ati
onexpenses
b.Wagesexpenses d.Adverti
si
ngexpenses

21.
Thestepsoftheoperati
ngcycl
eforaret
ail
erusual
lytakepl
aceinwhi
chorder
?
a.Purchasesofmer chandi
se→Sal eofmerchandiseonaccount→Coll
ecti
onoft
he
receiv
ables
b.Saleofmer chandiseonaccount→Purchasesofmer chandi
se→Coll
ecti
onoft
he
receiv
ables
c. Coll
ecti
on oft
herecei
vabl
es→Purchasesofmerchandi
se→Sal
eofmer
chandi
seon
Account
d.Pur chasesofmer
chandise→Col
l
ection oft
her
eceivabl
es→Sal
eofmer
chandi
seon
Account

22.
Saleswer e$600, 000, gr
ossprof
itwas$220,
000,operati
ngexpenseswer e$120,
000,
andt heincomet axr atei
s30%.Calcul
at hecostofgoodssol
et dandnetincome.
a. $380,000 and $30,
000, c. $380,
000 and $70,
000,
respecti
vel
y r
especti
vel
y
b. $380,000 and $100,
000, d. $100,
000 and $70,
000,
respecti
vel
y r
especti
vel
y

3|
Page
23.
Inaperpet
uali
nv entor
ysy st
em,asinvent
oryi
spurchased,i
tisini
ti
all
yrecordedas(1)
____
___
_____
_.Wheni nventor
yissol
dtocustomer
s, i
tisconv
ertedto(2)____
_ _
___
__.
a. (
1)anasset(2)anexpense
b. (
1)anexpense( 2)rev
enue
c. (
1)anexpense( 2)costofgoodssold
d. (
1)anasset(2)revenue

24.
Saleswer e$424, 000.Begi nningi nventorywas$45, 000.Purchaseswere$245,000.
Endinginventoryis$38,000.Oper ati
ngexpenseswer e$124,000.Cal
cul
at hecostof
et
goodssol d.
a. $252,000 c. $290,
000
b. $172,000 d. $128,
000
25.
Acompanyusi ngaper iodicinv entorysy stem cancompleteitscl
osi
ngprocedur
esin
thesamemannerasi faperpet ualinventorysystem isbei
ngused:
a. whent herei
snoi nventoryshr i
nkage.
b. whent herearenoaccount spay ablesout st
anding.
c. BycreatingaCostofGoodsSol daccount .
d. whent herearenosal esreturnsandal l
owances.

26.
Whichofthef oll
owingisaf act
orsuggesti
ngt heuseofaperiodi
cinv
ent
orysy
stem?
a. I
temsofi nventor
yhav eahighper-uni
tcost.
b. Merchandiseisstoredinmulti
plel
ocations.
c. Alowv ol
umeofsal estr
ansacti
ons.
d. Theinventoryi
ncludesmanydi f
ferentki
ndsoflow-costi
tems.

27.
A companypur chased$10, 000ofmer chandisei
nventor
yfr
om avendorwhoof fers
credi
tt erms of2/ 10 n/ 30.The companyuses t henetcostmet
hod ofr ecording
purchasesofmer chandise.Thecompanypai dthevendor30daysaft
erreceiv
ingt he
invoi
ce.Thej our
nal entyt
r orecor
dthepay mentwouldincl
udewhi
chofthefoll
owing?
a. Ad ebittoPurchaseDi scountsLostf
or$200
b. Ad ebittoAccount sPay abl
efor$10,
000
c. Ac reditt
oCashf or$10,000
d. Both( A)and(C)

28.
Youdel iveredapr i
nti
ngpr esstoy ourcustomer .Whenitwasdeliver
ed,itwassli
ghtl
y
dentedononesi de,butthedenthadnoef fectontheper
f or
manceoft hepri
nti
ngpress.
Tomai ntaincompanygoodwi l
l,y
ouaut horizeda$500r educt
ionintheinvoi
cepriceif
thecust omerwoul dkeept hepr i
nti
ngpr ess.Thecustomeraccept edt heoff
er.The
jour
nal entrytorecordthe$500woul dincludewhi choft
hef ol
l
owing?
a. Ad ebittoSalesDiscountfor$500
b. Ac redittoSalesDiscountfor$500
c. Ad ebittoSalesRet ur
nsandAl lowancesf or$500
4|
Page
 d. Acr
edi
ttoSal
esRet
urnsandAl
l
owancesf
or$500

29.
Whichoft hefoll
owingisnottrueaboutt heuseofspeci aljournal
s?
a. Transacti
onsarerecordedf asterandmor eeff
ici
entl
y.
b. Automat i
onmayr educether i
skoferrors.
c. Repetit
ivetr
ansacti
onsar ehandl edquicklyandeffi
cientl
y.
d. Diff
erentaccounti
ngprinciplesareapplied.

30.
Ifanaccount i
ngmanagerasksy outodelayr
ecordinganinvoiceforthepurchaseof
mer chandiseuntilaft
erthecl
osi
ngofthegenerall
edger,buti
ncludethemer chandi
se
inthephy sicalcountoftheendi
ngmer sei
chandi nventor
y(per
iodicinv
entor
ymet hod),
themanageri sattempti
ngtodowhichoft
hefoll
owing?

a. I
ncreasetherepor
tedneti
ncomei nt
heincomestatementoft
hecur
rentper
iod
b. Takeadvantageofthecr
editt
ermsrelat
edtothepurchase
c. Fol
lowthemat chi
ngpri
ncipl
e
d. Employthenetcostmethodofrecor
dingpur
chases

31.
The“
Mat chingPrinci
ple"i
sbestdescr i
bedas:
a.Anincreaseint hefi
nancingacti
vi
ties.
b.Thepr i
ncipl
ethatrevenueshouldber ecordedwhenaresourcehasbeenearned.
c.Ani ncreaseinr esourcesresult
ingf r
om t hesal
eofgoodsort heprovi
sionof
serv
ices.
d.Thepr i
ncipl
et hatexpensesshouldber ecordedi
ntheperi
odr esour
cesareusedto
generaterevenues.

32.
Whi
choft
hefoll
owingwouldappearonani
ncomest
atement
?
a.CostofSales c.Divi
dends
b.UnearnedRevenue d.Retai
nedEar
nings

33.
Thet
elephonebil
lforthecur rentperi
odisrecei
vedandrecorded,butpay
mentwi
l
lbe
madelat
er.Whateffectdoest histr
ansact
ionhaveontheaccounti
ngequati
on?
a.Li
abil
it
iesi
ncreaseandr etainedearni
ngsdecrease.
b.Assetsandli
abil
iti
esdecr ease.
c.Assetsandli
abil
iti
esincrease.
d.Assetsandcontri
butedcapi tal
incr
ease.

34.
Underaccr
ualaccounti
ngwhenisrevenuerecogni
zed?
a.Whencashi srecei
ved,andexpenseswhencashi spaid
b.Whencashi srecei
ved,andexpenseswhenthecost sarei
ncur
red
c.Whenear ned,andexpenseswhenthecostsareincurr
ed
d.Whenear ned,andexpenseswhencashispaid

5|
Page
35.
Paymentismadef orthet elephonebi llwhichwasr ecor
dedpr
evi
ousl
y.Whatef
fect
doesthi
stransactionhaveont heaccount i
ngequation?
a.Assetsandl i
abi l
it
iesi
ncrease.
b.Assetsandr etainedearningsi ncrease.
c.Liabi
li
ti
esincreaseandcont ributeddecreases.
d.Assetsandl i
abi l
it
iesdecrease.

36.
Pay mentismadef ormachi nerypur chasespr evi
ousl
yoncr
edi
t.Whatef
fectdoest
his
transact
ionhaveont heaccount ingequat ion?
a.Asset sandli
abili
tiesdecrease.
b.Asset sandcontributedcapitalincrease.
c.Asset sandli
abili
tiesincr
ease.
d.Li abi
li
ti
esdecreaseandr etainedear ningsincr
ease.

37.
Subtr
act
ingtotaloper
ati
ngexpensesf
rom gr
ossprofi
tontheMulti
ple-
StepI
ncome
Stat
ementiscall
ed?
a.GrossProfi
t c. I
ncomebefor
etaxes
b.Operat
ingIncome d.NetIncome

38.
Thelistbel ow contai
nsseverali
temsthatappearonani ncomestatement.1.Other
incomeandexpense2.I ncomebeforeincomet axes3.NetI ncome4.Oper ating
expenses5.Gr ossmargi
n6.Netsales7.Incomef rom oper
ati
onsSelectthechoice
thatl
iststhei t
emsi ntheor
dertheywoul
dappearonani ncomestat
ement .
a.6, 7,4,1, 2,3,5
b. 6, 5,4,1,7,2, 3
c.6, 5,4,7, 1,2,3
d.7, 6,1,4, 2,3,5

39.
Uset hefoll
owi
ngtodet ermi
newhatTr umpCompany 'si
ncomef r
om operat
ionsis:
Trump Company Ot herRev enue (
Expense)$80,
000 Generaland Admini
strat
ive
Expense $220,
000 Divi
dends pai
d $120,
000 Oper
ati
ng Rev
enues $600,
000 Sell
i
ng
Expenses$180,
000IncomeTaxExpense$60, 000
a.$160,000
b.$200,000
c. $220,000
d.$120,000

40.
Whenafir
m borr
owsmoney ,
oneeffectont
heaccount
ingequat
ioni
sa(
n)
a.decr
easeinli
abil
i
ties.
b.decr
easeinassets.
c. i
ncr
easeinassets.
d.decr
easeincontr
ibutedcapi
tal
.

6|
Page
41.
Andre'
sTennisCl ubsel l
sseasonmember shi
psf or$1,200each.Duri
ngJanuaryof
2010,50seasonmember shipswer esold.AsofMar ch31,2010,only$30,000of
seasonmember shipf eeshadbeencol l
ectedfr
om customer s.Thet
enni
sseasonruns
for6mont hsstartingApr i
l01, 2010.Whichoneoft hefollowingi
sanamountreport
ed
ontheBalanceSheetdat edMar ch31,2010?
a.Unearnedt ennismember shi prev
enueof$30, 000
b.Tennismember shiprevenueof$30, 000
c.Account sRecei vable$60,000
d.Unearnedt ennismember shi prev
enueof$60, 000

42.Whichofthef ol
l
owingst
atement
spr
esentf
inanciali
nfor
mationbasedont hecash
basi
sofaccounti
ng?
a.BalanceSheet c.St atementofRetai
nedEar
nings
b.IncomeStatement d.St atementofCashFlows

43.
CourtCorporati
onpur
chasedsuppli
esatacostof$24,
000during2010.AtJanuar
y1,
2010,suppli
esonhandwer e$2,000.AtDecember31,2010,suppl
iesonhandar e
$2,
100.Calculat
esuppl
iesexpensefor2010.
a.$24,100 c.$23,
900
b.$24,000 d.$28,
100

44.
Acompanyf orgottor ecor
dfouradjust
ment sduri
ng2010.Whi choneofthefol
l
owing
omissionsofadj ust mentswil
lunderst
atementincome?
a. Incomet axesowedbutnoty etpai
dareignored.
b.Inter estonmoni esborr
owedhasnoty etbeenrecorded.
c.Sal esmadedur i
ngt hel
astweekoftheper i
odarenotrecor
ded.
d.Pr epai dinsurancei snotreducedf orthepor t
ionofthepol i
cythathasexpi
red
dur ingt heperiod.

45.
HessonPr opert
ies, I
nc.Transacti
onsf orHessonPr operti
esarepr ovi
dedbel ow.Nov .1
Hessonpur chasest wonew mai ntenancecar tsoncr editat$375each.Thecar t
sar e
addedt oHesson'spr operty,pl
ant,andequi pmentr ecords.Pay mentisduei n30day s.
Nov.8Hessonaccept s$75ofadv ancepay mentsf rom customer sforservicestobe
provi
dedinDecember .Nov .15Hessonr ecei v
est heut i
l
itybi
llfor$150.Pay mentisdue
in30day s.Nov .20Cust omer sar ebi l
led$750byHessonf orpr opert
yser vi
ces.
Paymenti sduef rom thecust omer sin30day s.Nov .30Hessonr eceived$500f rom
cust
omer swhower ebil
ledonNov ember20t h.Refert othetransacti
onst hatoccurred
atHessonPr operti
es.Thej ournalentrytor ecordtheNov ember1stt r
ansactionis:
a.Dr .Cash750Cr .Equipment750
b.Dr .Equipment750Cr .AccountsPay able750
c.Dr .AccountsPay able750Cr .Equipment750
d.Dr .Equipment750Cr .Cash750

7|
Page
46.
OnOct ober1,2010,ZaneCor porati
onpai d$9,
000r enti
nadvance.Ther
entpermont
h
is$1,000.IfZane'saccount ing period endsonDecember31,2010,whatwi l
lbe
repor
tedont hefi
nancialstat
ement s?
a.RentRev enueof$6, 000oni t
s2010i ncomest at
ement
b.PrepaidRentof$6,000oni t
sbal ancesheetatDecember31,2010
c.RentExpenseof$9, 000oni t
s2010i ncomestatement
d.PrepaidRentof$9,000oni t
sbal ancesheetatDecember31,2010

47.
FedZisalocalpackagedeliveryservi
ce.Conceptual
l
y,whenshoul
dFedZr
ecogni
ze
rev
enuefr
om it
spackagedeliveryservi
ce?
a.Atthedat
et hepackagesaredel i
ver
ed
b. Att
hedatetheinvoicei
smai ledtothecust
omer
c.Atthedat
et hecustomerplacestheorder
d.Atthedat
et hecustomer'
spay mentisrecei
ved

48.
ProI ncorporatedoper atesf i
v edaysperweekwi thadail
ypay rol
lof$5,000.Employees
arepai dev er
ySatur dayf orthewor kweekjustcomplet
ed( Mondayt hroughFr i
day
).The
lastdayoft hemont hi sWednesday ,October31.Whati st heeffectoft hecorr
ect
adjustmentatOct ober31?
a.I ncreasesShar eholder s'equit
yandWagesPay abl
eby$15, 000
b.Decr easesShar eholder s'equi
tyandincreasesWagesPay ableby15, 000
c.I ncreasesWagesPay ableandi ncr
easesWagesExpenseby$25, 000
d. Incr easesWagesPay ableanddecr easesCashby$10,000

49.
Whathappenst ot he account i
ng equat ion when the adj
ust
mentf
ordepr
eci
ati
on
expensefortheaccount i
ngper iodisr ecorded?
a.Assetsdecr easeandshar eholder s’'equit
ydecreases
b.Assetsi ncr
easeandshar eholder s'equi t
yincr
eases
c.Assetsdecr easeandl i
abilit
iesdecr ease
d.Liabil
i
tiesincreaseandshar eholder s'equit
ydecreases

50.
Joe'sAut oCompanypay sitsagent soncommi ssi
on.Whi chsi t
uati
onv i
olatest he
matchingpr i
ncipl
eduring2010?
a. Sales commi ssi
ons are char ged to expense i
n 2010 on al lsales rev enue
recognizedin2010ev enthoughsomeoft hecommi ssi
onshav enotbeenpaid.
b.Rentexpensesar er ecogni
zed asexpensesi n 2010 even though t
hel astbi l
l
recei
v edin2010willnotbepaidunt il
2011.
c.Sal escommi ssi
onspai din2010f or2011commi ssionsar erecor
dedaspr epaid
expensesf or2010.
d. Insuranceexpensei srecognizedfort hetot
alcostofa1- yearpoli
cypurchasedi n
May ,2010.

51.
Wol
fIndust
ri
espl
antoper
atesf
iveday
sperweekwi
thadai
l
ypay
rol
lof$40,
000.
8|
Page
 Employeesarepai
dev er
ySat ur
dayfort
hewor kweekjustcompl
eted(Mondayt
hrough
Fr
iday).Thel
astdayofthemont hisWednesday,May31.Thecor
rectadj
usti
ngentr
yat
May31i s
a.Dr.WagesExpense120, 000Cr.WagesPayable120,
000
b.Dr.WagesExpense40, 000Cr.WagesPayable40,
000
c.Dr.WagesExpense120, 000Cr.Cash120,
000
d. Dr.WagesPayable40,000Cr.Cash40,
000

52.
Satur
nCo.r ent
edof fi
cespacetoat enantonJanuary1andr ecei
vedat ot
alof$90,000
forthef i
rstni
nemont hsofr ent
.Theamountwasr ecor
dedasRentCol l
ectedin
Advancewhenr eceiv
ed.Adjustmentsarerecordedonlyatt heendofev er
yquarter
.
Whatef f
ectdoest headj
ustmentatMar ch31hav eonSat urn'
sneti ncomef orthe
quart
erendingMar ch31?
a. I
ncreaseby$30, 000 c. Incr
easeby$90, 000
b.Decreaseby$30, 000 d.Decreaseby$60, 000

53.
Underaccr
ualaccounti
ngwhenisrevenuerecogni
zed?
a.Whencashi srecei
ved,
andexpenseswhencashi spaid
b.Whenearned,andexpenseswhencashi spaid
c.Whencashi srecei
ved,
andexpenseswhent hecostsarei
ncur
red
d.Whenearned,andexpenseswhent hecostsarei
ncurr
ed

54.
TheRebeccaCompanypur chasedequi
pmentfor$60,
000cash.Whati
stheef
fecton
assets?
a.Nonetef fect
b.Cannotbedet er
minedf
rom thi
sli
mit
edinf
ormati
on.
c. Incr
ease
d.Decr ease

55.
Whichoneoft hefol
lowingisanexampl eofanaccruedli
abil
i
ty?
a.Ani nsur
ancepol i
cythatexpi
resinaf ut
ureperi
odhasbeenacquired.
b.Equipmentt hatwil
lbenefi
tseveralperi
odshasbeenpurchased.
c. Rentthathasbeeni ncur
red,buthavenotbeenpaidattheendoftheper
iod.
d. Suppli
esarepurchasedandusedov ersever
almonths.

56. Whi l
eprepar i
ngt heFebr uary28thbankr econci
liati
onf orthecheckingaccountfor
Wi l
l
ow'sTr eeServices,theaccountantident
ifi
edthef oll
owingitems:
Willow'sbalanceaccor di
ngt ot
hegener all
edger,$46,200 Out st
andingchecks,
1,100
I
nt erestearnedont hesav ingsaccount,50Acust omer'sNSFchequer etur
nedbythebank,
500.I nadditi
on,Wi l
lowmadeaner rorinrecordingacust omer '
scheque:theamountwas
recor dedincashr eceiptsas$150, whilethebankcor rectl
yr ecor
dedtheamountas$510.
Whatamountwi llWil
lowr eportasitsactualcashbalanceonFebr uar
y28th?
9| Page
a.$46,110 b.$45,890
 c.$46,
250 d.$44,
650

57.
Whi
choft
hefoll
owingadjust
ingent
ri
esi
nvol
vest
hecashaccount
?
a.Noneofthese c.AccruedExpenses
b.Defer
redRevenues d.Deferr
edLiabi
li
ti
es

58.Whichi nt
ernalcontr
olact
ivi
tyi
sfol
l
owedwhenthewor kofonedepar tmentact
sasa
checkont hewor kofanot
her?
a.Phy sical
securit
y c.Independentv
erif
icat
ion
b.Segr egati
onofduties d.Establi
shi
ngresponsi
bili
ty

59.
Whichofthefoll
owingisnoti ncludedinCashandCashEquival
entsonacompany
's
bal
ancesheet(stat
ementoffinancialposi
ti
on)?
a.Asavingsaccountatthebank
b.Achequingaccountatthebank
c.Abankcer t
ifi
cateofdepositforoneyear(aoney
earbondcert
if
icat
e)
d.Pett
ycash

60.
Whi
choft hefollowingisanessent i
alel
ementofint
ernal
cont
rol
?
a.Veri
ficati
onbygov ernmentagencies
b.Comput eri
zedaccount ingsystems
c.Anout sourcedinternalaudi
tfuncti
on
d.Proceduresf orproperauthor
izati
onoft
ransacti
ons

61.
Whichoft hefoll
owi ngproceduresisincor
rectforestabli
shingandmai nt
aini
ngapet t
y
cashf und?
a.Achequei spr epar
edf orasmal l
,fi
xedamount ;whent hechecki scashed,the
moneyi sentrustedtoapettycashcustodian.
b.Whent hepettycashf undneedst oberepleni
shed,anent ryi
sr ecor
dedtorecogni
ze
ani ncreaseinthepettycashaccount .
c.Whenappr opr i
atedocument at
ionispresented,cashpay ment saremadef rom t
he
fund; t
hepet t
ycashcust odianretai
nsthedocument ation.
d.Thecompanymustobt ainthecashneededf orthef undandr ecordanentryfort
he
establi
shmentoft hefund.

62.
Cashcollect
edandrecordedbyacompanybutnoty
etref
lect
edinabankst
atement
areknownas
a.Outstandi
ngcheques c.Credi
tmemos
b.Debitmemos d.Deposi
tsintr
ansi
t

63.Whi
chi nternalcont
rolact
ivi
tyi
sfol
l
owedwheninventor
ystor
ageareasar
esecur
ed
wi
thli
mi t
edaccess?
a.Physi
cal securi
ty b.Segregati
onofdut
ies
10|
Page
c.Est
abl
i
shi
ngr
esponsi
bil
i
ty d. I
ndependentv
eri
fi
cat
ion

64.
Ifacompanyerr
oneousl
yr ecordsa$500deposi tas$50i nit
srecords,whi
choft
he
fol
l
owingmustoccurwhenr econcil
ingi
t sbankst
atement ?
a.Thecompanymustincreaset hebalanceperit
srecordsby$450.
b.Thecompanymustincreaset hebalanceperit
srecordsby$500
c.Thecompanymustdecr easet hebalanceperi
tsrecordsby$500.
d.Thecompanymustdecr easet hebalanceperi
tsrecordsby$450.

65.
Whi
choft hefol
lowi
ngi snotagener all
yrecogni
zedinter
nalcont
rol
acti
vi
ty?
a.Establi
shmentofclearlinesofauthori
tytocar
ryoutspecif
ict
asks
b.Preparati
onofbankr econcil
i
ationsonamont hl
ybasis
c.Reducingthecostofhi r
ingseasonalemployees
d.Li
mi t
ingaccesstocomput er
izedaccounti
ngrecords

66.
HoneyHut '
sunadjustedbankbal
anceis$3,
000.Outst
andingchequesamountto$500
and deposi
tsint ransi
ttotal$300.Based onthi
si nfor
mati
onal one,HoneyHut'
s
adj
ustedcashbalanceis
a.$2,800 c.$3,200
b.$3,300 d.$2,700

67.
Howarecashequi v
alentsreport
edordiscl
osedinthefinanci
alstat
ements?
a.Theyareonlyreportedonthestatementofcashflows.
b.Theyareonlydiscl
osedi nthenot
est othefi
nanci
alstatements.
c. Theyar
eincludedwi t
hcashasacur rentassetonthebalancesheet.
d. Theyar
eincludedwi thshort-
ter
mi nvestmentsasacur rentassetonthebal
ance
sheet

68.
Havingoneempl oyeeprepar
ecompanychecksandsi
gnt
hosechecksr
elat
est
owhi
ch
int
ernalcontr
olact
ivi
ty?
a.Av i
olat
ionofadequatedocumentat
ion
b.Agoodexampl eofestabli
shi
ngresponsibi
li
ty
c.Agoodexampl eofindependentv
erif
icati
on
d.Av i
olat
ionofpropersegr
egati
onofdut i
es

69.
DonnayCorporat
ionestabl
ishedapettycashfundi
ntheamountof$300.Whi
choft
he
fol
l
owingisthecorrectent
ryforDonnaytorecor
dthi
sevent
?

a.Dr.Pett
yCashFund 300
Cr.Cash 300
b.Noneoft hese,asnoent
ryi
snecessar
ytor
ecor
danexchangeofcash.
c.Dr.Cash 300
Cr.PettyCashFund 300
11|
Page
 d.Dr
.Mi
scel
laneousExpense 300
Cr
.PettyCashFund 300

70.
Ready Corp.'
s accountsreceiv
able bal
ance after posti
ng net coll
ecti
ons from
customersfor2012is$150,
000.Managementf eelsthatuncoll
ectedaccountsshoul
d
bebasedont hef ol
l
owingagingofaccountsrecei
vableanduncol l
ect
edper cent
ages.
Thereare$100,000thatar
e1- 30pastdueat2%and$50, 000t hatar
e31t o60day s
pastdueat10%.Thenetreali
zablev
alueoftheaccountsreceiv
ableis;
a.$148,000 c. $150,000
b. $147,
500 d. $143,000

71.OnJanuar y2,WellCor
porati
onsol
dmer chandisewithagr osspr
iceof$100,
000to
Prior
ityCorpor
ati
onwit
ht er
msof2/ 10,n/30.How muchSal esDiscount
swouldbe
recordedifpay
mentwasrecei
vedonJanuary8?
a.$98, 000 c. $100.000
b.$0 d.2,000

72.
Whati st he disti
nguishing character
isti
c between accountsr eceivable and not
es
receivable?
a.Account sr ecei
v abl
er equirepaymentofi nter
estwhilenotesr eceivabl
edoesnot
hav epay mentofi nter
est .
b.Not esreceivableresultfrom cr
editsaletransacti
onsformerchandi si
ngcompani es,
whi l
e account sr eceivabl
er esultf r
om cr edi
t sal
et ransactions for servi
ce
compani es.
c.Account sr ecei
v abl
ear eusuallycurrentasset swhil
enotesr eceivableareusuall
y
long-term assets.
d.Not esreceivablegener all
yspecif
yani nterestrat
eandamat uri
tydateatwhi chany
interestandpr i
nciplemustber epaid.

73.
TheAll
owancef orBadDebtsrepresents:
a.Thedi f
ferencebet weentotalsal
esmadeoncr edi
tandtheamountcol
l
ect
edfr
om
thosecreditsales
b. Thedifferencebet weenther ecordedv alueofaccountsr
ecei
vabl
eandthenet
real
izabl
ev al
ueofaccountsreceivable
c. Baddebtl ossesincur
redinthecur r
entper i
od
d. Theamountofuncol l
ect
edaccount swr i
ttenofft
odate

74.
Whichoft hef oll
owi ngst atementsistrueregardi
ngthetwoall
owanceapproaches
usedtoestimatebaddebt s?
a.Theper centage-of -
receiv
ablesapproachtakesint
oaccountt
heexist
ingbal
ancein
theAl
lowancef orBadDebt saccount.
b. Theper centage-of-sal
esappr oachtakesintoaccountt
heexist
ingbal
anceinthe
All
owancef orBadDebt saccount.
12|
Page
 c. Thedirectwr
it
e-offmet
hoddoesabet t
erjobofmatchingrev
enuesandexpenses.
d.The directwrit
e-offmethod takes i
nto accountthe exi
sti
ng bal
ance i
nt he
AllowanceforBadDebtsaccount.

75.
Whatshoul
dacompanydot oi
mproveit
saccountsr
eceivabl
eturnoverrat
e?
a.Incr
easeitssal
esfor
ce.
b.Givecustomerscr
editt
ermsof2/10,
n/30rat
herthan1/10,n/30.
c.Loweritssel
li
ngpri
ces.
d.Reducethenumberofemployeesworki
nginthecredi
tdepart
ment .

76.
Ifacompanyusest hedirectwrit
e-offmet hodofaccounti
ngforbaddebts,
a.Whenanaccounti swr i
tt
enof f
,totalassetswil
lstayt
hesame.
b. Itwillreducetheaccount sreceivableaccountattheendoft heaccounti
ngperi
od
forestimateduncoll
ectedaccount s.
c. Itestabli
shesanest i
mat efortheallowancefordoubtful
accounts.
d. Itwi llrecord bad debtexpense onl ywhen an accounti s det
ermined t
o be
uncoll
ected.

77.
Forr
estCorp.usest hedi rectwrite-offmet hodtoaccountforbaddebts.Whataret
he
eff
ectsontheaccount i
ngequat ionoft heent ryt
or ecor
dthewr i
te-
offofacust
omer'
s
accountbal
ance?
a.AssetsandShar eholders'equitydecr ease
b. Assetsandl i
abili
ti
esdecr ease
c.AssetsincreaseandShar eholder s'equitydecrease
d.Shareholders'equit
yandl iabil
iti
esdecr ease

78.
Forr
estCorp.usest hedi r
ectwr i
te-offmet hodt oaccountforbaddebts.Whataret
he
eff
ectsont heaccount ingequat i
onoft heent r
ytor ecor
dthewr i
te-
offofacust
omer'
s
accountbalance?
a.Asset sandliabil
iti
esdecr ease
b. Shareholders'equit
yandl i
abil
it
iesdecr ease
c. AssetsandShar eholders'equi
tydecr ease
d. AssetsincreaseandShar eholders'equitydecrease

79.
Ifacompanyusest heallowancemet hodtoaccountfordoubt
fulaccount
s,whenwi
ll
thecompany'sshar
ehol
der s'equit
ydecr
ease?
a.Whent heaccountsreceivabl
eamountbecomespastdue
b. Atthedateacustomer '
saccountiswri
ttenoff
c. Attheendoft heaccount ingperi
odwhenanadj ust
ingentr
yf orbaddebtsi
s
r
ecorded
d. Atthedateacustomer '
saccountisdet
er mi
nedtobeuncoll
ect
ed

80.
Digi
tal
Cor
por
ati
on
13|
Page
 Thef ol
lowi ngdat
aconcernDi gitalCorporat
ionfor2011.Credi
tsal esduri
ngt heyear
$2,400,
000Account sReceiv
able- -
December31, 2010410,000All
owancef orBadDebt s
--
December31,201055, 000Baddebtexpensef orthey ear70,000Refert oDigit
al
Corporation.Whatamountswi llDigi
talshowoni tsyear-
endbalancesheetf orthenet
reali
zablev al
ueofi
tsaccountsr ecei
vable?
a.$355,000 c. $285,
000
b. $410,000 d.$340,000

81.
During2012,theaccount sreceivabletur
noverrateforUpwar dCompanyincreased
from 10to15t imespery ear.Whichoneoft hefoll
owingstatementsi
sthemostlikel
y
explanati
onforthechange?
a.Thecompanyhasdecr easedsal estoit
smostcr edi
tworthycust
omers.
b. Thecompany '
screditdepar t
menthasf oll
owedupwi thcustomerswhoseaccount
balancesarepastduei nordertogeneratequi
ckercoll
ecti
ons.
c. Thecompanyhasi ncr easedt heamountoft imecust omer
shav etopayt hei
r
accountsbeforet
heyar epastdue.
d. Thecompanyhasext endedcr edi
ttomor eriskycustomersinordert
oincrease
sales.

82.
Thefol l
owingi nformat i
onwaspr esentedint hebalancesheetofDi abloCompanyasof
December31, 2012:Tr adeaccount sreceivable,netofall
owancef ordoubt f
ulaccounts
of$255, 000; [
$1,700,000].Whi choneoft hefollowingstat
ement sistrue?
a.Thenetr eali
zablev al
ueDi ablo'
saccount sreceivabl
eis$1,700,000
b.Thebal ancei nt heAccount sReceivableaccounti n Di
ablo'sgener all
edgeri s
$1,700,000
c.Di abloexpect stocol lectonly$1,445,
000f r
om itscust
omer s
d.Di abloexpect sthat$1, 855,000ofaccount sreceiv
ablewillbecol l
ectedafteryear
end

83.
Bradfor
dCor p.reportednetcredi
tsal esof$3, 200,000andcostofgoodssoldof
$2,600,
000for2012.OnJanuar y1,2012, account
sr eceiv
abl
ewas$450,
000.Amounts
owedbycust omersincreasedby$50,000dur i
ng2012.Roundingt
otwodecimalpl
aces,
whatisBradfor
d'sreceivabl
etur
noverratefor2012?
a.7.11 c.6.74
b.6.40 d. 5.47

84.
Whichoneofthefol
lowi
ngi
sanaccur
atedescr
ipt
ionoftheAll
owanceforBadDebt
s?
a.RevenueAccount c. ExpenseAccount
b. Cont
raAccount d. Li
abil
it
yAccount

85.
What effects on a ret
ailstore'
s accounti
ng equati
on occur when i
trecords
merchandiseonaccount,
assumingtheuseofaper pet
uali
nvent
orysyst
em?
a.N
14|
onetef
Page
fect. b. Asset
s and shar ehol
der
s' equit
y
 decrease. i
ncrease.
c. Assets and shar
ehol
der
s' equi
ty d.Assetsandl
i
abi
l
iti
esi
ncr
ease.

86.
Inor dertodet erminei nventoryf orit
sbal ancesheet,acompanymustcountt
he
inv
ent oryattheendofi tsaccount i
ngperiodaccordi
ngto:
a.t heper i
odicinventor
ysy stem.
b. theper petuali
nv ent
orysy stem.
c. bot htheper i
odicandper petualinv
entorysyst
ems.
d. nei t
hertheper i
odicnorper petuali
nventorysy
stems.

87.
Which invent
ory costflow met
hod assi
gns t
he costofthe mostrecenti
tems
purchasedtoendinginv
entor
y?
a.Specifi
cidenti
fi
cati
on c.FI
FO
b. LIFO d.Weight
edav
eragecost

88.
Silv
ermarkEnterpr
isesThef oll
owi
nginformati
onisfrom Si
lv
ermark's2012account
ing
records.GrossPur chases$182,000,Transpor
tati
on-i
n11,000Inventory
,January1,
201226, 500Inv
entor y
,December31,201228, 800PurchaseReturnsandAllowances
8,400Ref ertothei nfor
mationprovi
dedf orSil
vermarkEnter
pri
ses.How muchwi l
l
Silv
ermarkrepor
tasnetpur chasesfor2012?
a.$201, 400 c. $184,
600
b. $193,000 d. $211,
100

89.
Thecostofgoodssol disequalt
o:
a.theamountofi nvent
oryonhandatt heendoftheaccounti
ngper
iod
b. purchaseslessbegi
nninginv
entor
yplusendingi
nventor
y.
c. theinvent
oryaccountasreport
edont hebal
ancesheet.
d. thecostofgoodsav ai
labl
eforsal
elessendi
nginventor
y.

90.
Which invent
ory costf l
ow met hod assi
gns the costoft he mostr ecentit
ems
purchasedtocostofgoodssol d?
a.Wei ght
edav er
agecost c.FIFO
b. Specif
icidentif
icati
on d. LIFO
91.
Transport
ati
on-inis:
a.anoper ati
ngexpense.
b. partofpurchaser eturnsandallowances.
c. addedtot r
anspor tati
on-outaspartofthecal
culat
ionofcostofgoodssold.
d. partofthenetcostofpur chases.

92.
Bil
l
itCorpor
ati
onBi ll
i
tCor por
ati
onisamer chandisi
ngcompany.Selectedaccount
bal
ancesarelistedbelow.Sales$500,
000,Purchases225,
000BeginningI nv
ent
ory
16,
000EndingI nvent
ory30,000Operat
ingExpenses148,000IncomeTaxExpense
10,
000Beginni
ngRet ainedEarni
ngs53,
000Dividends 15,
000Calcul
atet heCostof
15|
Page
 GoodsSol
dforBil
l
itCor
por
ati
on.
a.$259,000 c. $275,
000
b.$211,000 d. $241,
000

93.
Thei
nventoryturnoverr
ati
oisrepresentedbywhi
choft
hef
oll
owi
ngf
ormul
as?
a.Costofgoodssol d/averageinventor
y
b.Av erageinventor
y/netcreditsal
es
c.Av erageinventor
y/costofgoodssol d
d.Netcr editsal
es/averageinventory

94.
Inventoryturned oversev ent imesdur ing they earatProsserElectr
onics.Simil
ar
electr
onicsr et
ail
ershaveani nventoryturnoverequaltotwelveti
mespery ear
.What
explai
nsPr osser'
sstat
eofi nv entor
ymanagement ?
a.Pr osserisperformi
ngmuchbet terthanitscompetit
ors.
b.Pr ossershouldincreaset heamountofgoodsonhandt oaccommodat ethegrowth
ininventorydemand.
c. Pr ossersoldtoomuchi nventor
ydur i
ngt heyear.
d. Pr osserneedstoincreasesal esanddecr easetheamountofinventor
yonhand.

95.JensanCo.
Jensanusesaper pet
ual i
nventorysystem andhadt hefoll
owinginvent
oryt
ransacti
onsfor
themont hofJune.
June1Onhand, 50uni t
sat$15. 00each$ 750. 00
4Pur chased115uni tsat$15.10each1, 736.
50
5Sol d100uni ts
10Pur chased75uni t
sat$15. 20each1, 140.00
24Sol d50uni ts
Totalcostofgoodsav ail
ableforsale$3, 626.
50
30Onhand, 90uni ts
TheJune30t hinventoryincluded45uni tsfr
om theJune4t hpurchaseand45uni t
sfrom
theJune10t hpur chase.Refertot heinformati
onpr ov
idedforJensanCo.Jensan'scostof
endinginventoryatJune30t hundert hespeci f
icident
if
icat
ionmet hodi
s:
a.$1, 363.50 c. $1,368.
00
b.$1, 350.00 d. $1,359.
00

96.
Forwhi ch ty
pe ofmer chandi
se would a company mostlikel
y use t
he speci
fi
c
ident
if
icat
ionmethodofinvent
orycost
ing?
a.FineJewel l
er c. Gasoli
neheldi
nstor
agetanks
b. Casesofbot t
ledwat
er d.Barbiedol
ls
16|
Page
97.
Thei
ncomestat
ementwoul dbewhichpar
tofDav
idJones’
mast erbudget?
a.Thecapit
alexpendi
turebudget c.Theoper at
ingbudget
b. Noneoftheabove d.Thefinanci
albudget

98.
Refert othe i nfor
mat i
on below;Suppose ‘RegalMar i
nes’r eport
st he fol
lowing
inf
ormation(inhundr edsoft housandsofdollars);Beginningmat eri
alsinvent
ory$6
Endingmat er
ialsinventor
y$5Begi nningworkinpr ocessinv entor
y$2Endi ngwor kin
processinventory$1Begi nni
ngFi nishedgoodsI nventory$3Endi ngfi
nishedgoods
invent
ory$5Di rectlabour$30Pur chasesofdi r
ectmat eri
als$100Manuf actur
ing
overhead$20Whati sthecostofthedi r
ectmat
er i
alsthatRegal used?
a.$100 c. $99
b. $106 d. $101

99.
In cal
culating costofgoods sol d,which ofthe fol
l
owi
ng i
sthe manuf
act
urer
’s
counterpartofther et
ail
er’
spurchases?
a.Tot almanuf acturi
ngcostsincurreddur
ingtheper
iod
b. Total manuf actur
ingcoststoaccountfor
c. Directmat erial
sused
d.Costofgoodsmanuf act
ured

100. Whi chisnotachar act er

ist
icofmanagementaccount
ingi
nformati
on?
a.Emphasi zesr elevance
b. Focusesont hef uture
c. Emphasi zesr eli
abili
ty
d.Prov i
desdet ailedinformationaboutpar
tsoft
hecompany ,notj
ustthecompanyas
awhol e

101. Whichoft hefoll

owingisthecor
nerstone(ormostcr
it
icalel
ement
)oft
hemast
er
budget
?
a.Thesalesbudget
b.Theinventorybudget
c. Theoperati
ngexpensesbudget
d. Thepurchasesandcostofgoodssoldbudget

102. Ref ertot hei nf

ormat i
onbelow;Suppose‘ RegalMar ines’report
st hef ol
lowing
i
nformation(inhundr edsoft housandsofdol l
ars);Beginningmat er
ial
si nvent
ory$6
Endingmat er
ialsinventor
y$5Begi nningworkinpr ocessinv ent
ory$2Endi ngwor kin
processinventory$1Begi nni
ngFi nishedgoodsI nventory$3Endi ngfinishedgoods
i
nv ent
ory$5Di rectlabour$30Pur chasesofdi r
ectmat eri
als$100Manuf actur
ing
overhead$20Whati sthecostofgoodssol d?
17|
a.$152
Page
b. $153
 c. $150 d. $154

103. Ref ertot hei nf

ormat i
onbelow;Suppose‘ RegalMar ines’report
st hef ol
lowing
i
nformation(inhundr edsoft housandsofdollars);Beginningmat er
ial
si nvent
ory$6
Endingmat er
ialsinventor
y$5Begi nningworkinpr ocessinv ent
ory$2Endi ngwor kin
processinventory$1Begi nni
ngFi nishedgoodsI nventory$3Endi ngfinishedgoods
i
nv ent
ory$5Di rectlabour$30Pur chasesofdi r
ectmat eri
als$100Manuf actur
ing
overhead$20Whati sthecostofgoodsmanuf actured?
a.$151 c. $150
b. $152 d.$149

104. Thejour
nalentr
yforrecordi
ngaccount
srecei
vabl
eis:
a.Sal
esDr.&AccountsRecei v
ableCr.
b.Account
sReceivabl
eDr .&SalesCr.
c.CashDr.&SalesCr.
d.Sal
esDr.&AccountsPay ableCr.

105. Thepaymentt erms2/ 10,n/

30tellusthat
a.a10%di scountwillbeawardedifthepay mentismadewithi
n2day sofinv
oicedate;
other
wise,thefull
amounti spayablewithin30daysofi
nvoicedate.
b. a2%discountwi l
lbeawar dedifthepay mentismadewithin10monthsofi nv
oice
date;
otherwise,t
hef ull
amountispay ablewit
hin30monthsofinvoi
cedate.
c. a0.5%di scountwillbeawardedifthepay mentismadewi thi
n10day sofinv
oice
date;
otherwise,t
hef ull
amountispay ablewit
hin30day
sofi nvoi
cedate.
d. a2%di scountwi l
lbeawar dedifthepay menti
smadewi t
hin10day sofinv
oice
date;
otherwise,t
hef ull
amountispay ablewit
hin30day
sofi nvoi
cedate.

106. Thecashdi scount(

alsoknownaspur
chasediscountorsalediscount)isgi
vent
o
cust
omersfor:
a. ear
lypayment s c. frequentpurchases
b.bulkpurchase d. goodbusi nessr el
ati
ons

107. Theaccountsrecei
vabl
ethatcannotbecol
l
ect
edbecauseoft hei
rbankr
upt
cyor
anot
herreasonar
etermedas:
a.collect
ibl
eaccount
s c.doubt
ful
accounts
b.badcust omers d.uncol
l
ecti
bleaccount
s

108. Underall
owancemet hod,thej
ournalentr
ytorecorduncol
lect
ibl
eaccount
sex
pense
i
s:
a.Al
lowancef orDoubtf
ulAccountsDr.&Uncoll
ecti
bleAccountsExpenseCr
.
b.Uncol
lecti
bleAccountsExpenseDr.&AllowanceforDoubtful
AccountsCr
.
c.Uncol
lecti
bleAccountsExpenseDr.&AccountsReceivabl
eCr .
d.AccountsReceivabl
eDr.&Uncollect
ibl
eAccountsExpenseCr .
18|
Page
109. TheFor tuneCompanyusesal l
owancemethodtorecognizeuncol
l
ect
ibl
eaccount
s
expense.I
tprovidesy outhefoll
owingsel
ect
edinfor
mation:
i
. Account sreceivableonDecember31,2017:$380,
000
i
i.Requi r
edbal ancei nAllowanceforDoubtf
ulAccountsaccountonDecember31,
2017:$3,
000
i
ii
.Existi
ngbal ancei nAl l
owancef orDoubt
fulAccountsaccountonDecember31,
2017:$2,
500

Thejournalentr
yrequir
edt orecogni
zeuncol
lect
ibl
eaccount sexpenseonDecember31,
2017is:
a.Uncollect
ibl
eAccountsExpense500Dr.&Account sReceiv
able500Cr .
b.Uncollect
ibl
eAccountsExpense2,500Dr.&AccountsReceivabl
e2, 500Cr.
c. Uncoll
ecti
bleAccountsExpense500Dr.&All
owancef orDoubtfulAccount
s500Cr.
d.Uncollect
ibl
eAccountsExpense3,000Dr.&AllowanceforDoubt f
ulAccounts3,
000
Cr
.

110. All
owancefordoubt
ful
account
sisanexampl
eof:
a.assetaccount c.expenseaccount
b.l
iabi
li
tyaccount d.contr
aassetaccount

111. Underall
owancemet hod, t
hejour
nal entr
ytowrit
eof fanuncol
lect
ibl
eaccounti
s:
a.Al
lowancef orDoubtf
ulAccountsDr .&Accountsreceivabl
eCr.
b.Accountsrecei
vableDr.&Al l
owancef orDoubt
fulAccountsCr.
c.Uncol
lecti
bleAccountsExpenseDr .&AccountsRecei v
ableCr.
d.AccountsReceivabl
eDr .&Uncoll
ectibl
eAccountsExpenseCr .

112. Underdir
ectwriteoffmethod,thejournalent
rytorecogni
zeuncol
l
ect
ibl
eaccount
s
expensei
s:
a.Accountsrecei
vableDr.
;SalesCr.
b.Uncoll
ecti
bleAccountsExpenseDr.;SalesCr.
c.Uncoll
ecti
bleAccountsExpenseDr.;AccountsReceiv
ableCr.
d.AccountsReceivabl
eDr.;Uncol
lect
ibl
eAccount sExpenseCr.

113. Underall
owancemet hod,thecorrectjour
nalentrytor ei
nstat
eapr ev
iousl
ywr
it
ten
of
faccountis:
a.All
owancef orDoubtf
ul AccountsDr.;
Uncollecti
bleaccountsexpenseCr.
b.AccountsReceivabl
eDr .;
AllowanceforDoubt f
ulAccountsCr .
c.All
owancef orDoubtf
ul AccountsDr.;
Account sReceivabl
eCr .
d.AccountsReceivabl
eDr .;
SalesCr.

114. Thecorr
ectjour
nal
entr
yforcol
l
ect
ionofaccount
srecei
vabl
eis:
a.CashDr .
;Account
sRecei
vabl
eCr. b.CashDr.;
SalesCr.
19|
Page
 c.CashDr
.;Account
sPay
abl
eCr
. d.Account
sRecei
vabl
eDr
.;CashCr
.

115. Apromissorynoteiswrit
tenby:
a.acredi
torinfavorofadebtor
b.acustomerinf av
orofanothercust
omer
c.asell
erinfavorofanot
hersell
er
d.adebtorinfavorofacredi
tor

116. Inapromissorynot
e,t
hedebtormakes:
a.acondit
ionalpromi
setopayacert
ainsum ofmoney
b.anunconditi
onalpr
omisetopayacert
ainsum ofmoney
c.acondit
ionalpromi
setobuyacert
ainquanti
tyofgoods
d.anunconditi
onalpr
omisetobuyacert
ainquanti
tyofgoods

117. Whi chofthefoll

owingjournalent
riesconver
tsanaccountr
ecei
vabl
eint
oanot
e
recei
vabl
e?
a.AccountsReceiv
ableDr.;NoteRecei
v abl
eCr.
b.Not esRecei
vabl
eDr.;AccountsReceivabl
eCr.
c.Not esRecei
vabl
eDr.;Sal
esCr .
d.Not esRecei
vabl
eDr.;CustomersCr.

118. Account
sr ecei
vabl
ear
erepor
tedi
nthebal
ancesheet
:
a.atfaceval
ue c.atnetreal
izableval
ue
b.atgrossvalue d.atnetcreditsal
esvalue

119. TheJohn&St ewartCompanypr ovidesy out hef

oll
owingsel
ectedinfor
mat i
on:
. Ba
i l
anceinaccount sr
eceivabl
eaccountonDecember31, 2017: $70,
000
. Ba
i
i l
anceinal l
owancef ordoubtfulaccount saccountonDecember31,2017af t
er
makingadjusti
ngentr
yf oruncol
l
ect i
bleaccountsexpense:$2,
000
i
i
i. Uncoll
ect
ibleaccount
sexpensef orthey ear2017:$500
Ont hebasisofabov einfor
mat i
on,thenetr eali
zablevalueofaccountsreceiv
abletobe
showni nthebal
ancesheetasatDecember31, 2017woul dbe:
a.$72, 000 c.$68,000
b.$69, 500 d.70,500

120. TheUSCompanyusessal esmet hodt oestimateit

scredi
tlosses.I
tpr
ovi
desyou
t
hefol
l
owi ngselectedi nformati
on:
 Tot
al cr
editsalesf ortheyear2017: $800,
000
 Est
imat eduncollectibl
ecreditsalesf ort
hey ear2017:1%
 Bal
ancei nall
owancef ordoubtfulaccountsaccountonDecember31,2017before
makingadjusti
ngent ryforuncoll
ectibleaccountsexpense:
$5,000
20|
Page
Theuncoll
ect
ibl
eaccount
sexpenset
ober
epor
tedinthei
ncomest
atementf
ort
hey
ear
2017i
s:
a.$13,000 c.$8,
000
b.$3,000 d.$5,
000

121. Themai npurposeoff actori

ngaccountsreceivabl
eis:
a.tocreateanaddit
ional guaranteeofcol
lect
ion
b.toestabli
shalegalprooff orfutur
euse
c.tomeeti mmediatecashneeds
d.toi
nv estaccount
srecei vabl
ei nanot
herbusiness

122. Inaf actor

ingwithr
ecour se,t
hel
ossresult
ingf
rom baddebt
sisbor
nby
:
a.theor gani
zati
onbuyingtheaccount
sr ecei
vabl
e
b.theor gani
zati
onsell
i
ngt heaccount
sreceivabl
e
c.theintermediat
eorganization
d.all
oft heabov e

123. Inafactori
ngwi thoutrecoursetransacti
on,t
hel
ossr
esul
ti
ngf
rom baddebt
sis
bor
nby:
a.anint
ermediateorganizati
on
b.theCEOoft heorganizati
on
c.theor
ganizati
onselli
ngt heaccountsrecei
vabl
e
d.theor
ganizati
onbuy i
ngt heaccountsrecei
vabl
e

124. Doublecolumncashbookhast womoneycol umnasfol

l
ows:
a. Onef
ordiscountandtheotherforbank.
b. Onef
ordiscountandtheotherforcash.
c. Onef
orcashandot herforbank.
d. Onef
orcashr ecei
ptandtheotherforcashpayment
.

125. Cont
raent
ri
esar
erecor
dedi
n:

a.Cashbookwi
thdi
scountcol
umn.

b.Cashbookwi
thdi
scountandbankcol
umn.

c.Si
mpl
ecashbook.

d.Pet
tycashbook.

126. Of
fi
cecashdeposi
tedi
ntobanki
srecor
dedi
ncashbookon:

21|
Page
 a.Debi
tsi
de

b.Cr
edi
tsi
de

c.Debi
tsi
deandont
hecr
edi
tsi
de

d.Noneoft
heabov
e

127. Cashdi
scountal
l
owedi
s:

a.Recor
dedont
hedebi
tsi
deofcashbook

b.Recor
dedont
hecr
edi
tsi
deofcashbook

c.Recor
dedi
npet
tycashbook

d. Notr
ecor
dedi
ncashbook

128. Cashwi
thdr
awnf
rom bankf
orof
fi
ceusei
srecor
dedi
ncashbookon:

a.Debi
tsi
de

b.Cr
edi
tsi
de

c.Debi
tsi
deandcr
edi
tsi
de

d.Noneoft
heabov
e

129. Cashwi
thdr
awnf
rom bankf
orper
sonaluseoft
heowneri
srecor
dedi
ncashbook
on:

a.Debi
tsi
de

b.Cr
edi
tsi
de

c.Bot
hsi
des

22|
Page
130. Cashbooki
smeantf
orr
ecor
ding:

a.Al
lcasht
ransact
ions

b.Onl
ycashpay
ment

c.Onl
ycashr
ecei
pts

d.Pet
tyexpenses

131. Cashsal
esar
erecor
dedi
n:

a.Sal
esbook

b.Cashbook

c.Jour
nal

d.Noneoft
heabov
e.

132. Pet
tycashbooki
susedf
orr
ecor
ding:

a.Pet
tycashr
ecei
pts

b.Pet
tycashpay
ment
s

c.Al
lcashpay
ment
s

d.Pet
tycashr
ecei
ptsandpay
ment
s

133. I
ncaseofcashbooki
fnat
ureofbal
ancei
snotment
ionedt
heni
twi
l
lbe:

a.Debi
tbal
ance

b.Cr
edi
tbal
ance

23|
Page
 c.Ov
erdr
aftofcashbook

d.Noneoft
heabov
e

134. Budgetsal
es,
plust
argetendi
ngf
ini
shedgoodsi
nvent
ory
,mi
nusbegi
nni
ngf
ini
shed
goodsi
nvent
oryi
sequalt
o:

a.budgetproducti
on
b.plannedproducti
on
c.setupproducti
on
d.standbyproducti
on

135. Ani
nvent
ory
,whi
chconsi
stsofpar
ti
all
ywor
kedgoodsorwor
kinpr
ogr
essi
scal
l
ed

a.di
rectmaterial
sinventor
y
b.wor ki
nprocessinventory
c.fi
nishedgoodsinventory
d.i
ndirectmateri
ali
nv ent
ory

136. I
nvent
oryoff
inal
goodst
hatar
enoty
etsol
discal
l
ed:

a.fi
nishedgoodsinventory
b.i
ndirectmateri
ali
nv ent
ory
c.di
rectmaterial
sinventor
y
d.wor ki
nprocessinventory

137. An inventor
y which consi
sts of st
ock wai
ti
ng t
o be used I
n pr
ocess of
manuf
acturi
ngisknownas

a.fi
nishedgoodsinventory
b.i
ndirectmateri
ali
nv ent
ory
c.di
rectmaterial
sinventor
y
d.wor ki
nprocessinventory

138. I
ncostaccount
ing,
typesofi
nvent
orydonoti
ncl
ude

a.di
rectmat
eri
alsi
nvent
ory
24|
Page
 b.worki
nprocessinventor
y
c.f
ini
shedgoodsinventory
d.i
ndi
rectmater
iali
nventory

139. Whi
choff
oll
owi
ngi
sanexampl
eofpur
chasi
ngcost
s?

a.i
ncomi ngf
rei
ght
b.stor
agecosts
c.i
nsurance
d.spoi
lageAnswerC

140. Ifanav er
ageinvent
oryi
s2000uni t
s,annualr
elev
antcar
ryi
ngcostofeachuni
tis
$5,
thenannualr
elev
antcarr
yingcostwi
llbe:

a.$5,
000
b.$4,
500
c.$5,
500
d.$6,
000nswerA

141. Ifdemandofoney earis25,

000unit
s,r
elev
antor
deri
ngcostforeachpurchase
or
deris$210,car
ryi
ngcostofoneuni
tofst
ockis$25theneconomi
corderquanti
ty
wi
llbe:

a.678packages
b.648packages
c.658packages
d.668packagesAnswerB

142. Costofpr
oductf
ail
ure,
err
orpr
event
ionandappr
aisal
scanbecl
assi
fi
edunder

a.stocki
ngcosts
b.stock-
outcosts
c.costsofquali
ty
d.shri
nkagecostsnswerC

143. Acti
vit
iesr
elat
edt
ocoor
dinat
ing,cont
rol
l
ingandpl
anni
ngf
low ofi
nvent
oryar
e
cl
assi
fi
edas:

a.deci
si
onal management
b.thr
oughputmanagement
c.i
nventor
ymanagement
d.manufactur
ingmanagement

25|
Page
144. Theinvent
orycost
ingmet
hodt
hatchar
gest
hemostr
ecentcost
sincur
redagai
nst
r
evenue
a.Lifo
b.Fifo
c.Av er
ageCost

145. Thef
oll
owi
nguni
tsofapar
ti
cul
ari
tem wer
epur
chasedandsol
ddur
ingt
heper
iod:

Beginningi nvent
ory 40unit
satP20
Fi
rstpur chase 50unit
satP21
Secondpur chase 50unit
satP22
Fi
rstsale 110units
Thir
dpur chase 50unit
sat23
Secondsal e 45unit
s
Whati st hecostoft he35unit
sonhandatt heendoftheper
iodasdet
ermi
nedundert
he
perpetual i
nventorysyst
em bytheli
focost
ingmethod
a.715
b.700
c.705
d.805

146. Thef
oll
owi
nguni
tsofapar
ti
cul
ari
tem wer
epur
chasedandsol
ddur
ingt
heper
iod:

Beginni
ngi nvent
ory 40uni
tsatP20
Fi
rstpurchase 50uni
tsatP21
Secondpur chase 50uni
tsatP22
Fi
rstsale 110uni
ts
Thir
dpur chase 50uni
tsat23
Secondsal e 45uni
ts
Whati sthecostofthe35unitsonhandattheendoft
heper
iodasdet
ermi
nedundert
he
peri
odicinventor
ysyst
em bythefi
focost
ingmethod
a.20
b.21
c.22
d.23

147. Ift
hemerchandi
seinvent
oryisbeingval
uedatcostandthepri
cel
eveli
sst
eadi
l
y
r
isi
ng,
themethodofcost
ingthatwi
ll
yiel
dthehi
ghestneti
ncomeis:

26|
Page
 a.Li
fo
b.Fif
o
c.AverageCost
148. Oneadvantageofoper
ati
ngasapar
tner
shi
pwoul
dincl
ude:

a.Accesst
oal
argeramountofi
nit
ial
capi
tal

b.Bei
ngabl
etor
aisecapi
tal
thr
oughshar
eissues

c.Li
mit
edl
i
abi
l
ityf
oral
lpar
tner
s

d.Gr
eat
erpowert
hanasol
etr
aderf
ordeci
sionmaki
ng

149. Innormaltradi
ngcircumst
ances,whi
choft
hef
oll
owi
ngwoul
dnotbef
oundi
na
par
tner
’scur
rentaccount?

a.Dr
awi
ngs

b.Sal
ari
es

c.Goodwi
l
l

d.I
nter
estondr
awi
ngs

150. Hasl
em andStr
ingerareinpart
nershipsharingpr
ofit
si na3:
2rati
o.Netprofi
tfor
t
heyearended31.
12.20X5was£12, 000.Int
erestoncapit
alwasall
ocatedas£400t o
Hasl
em and£250toSt r
inger
.Str
ingerreceivedapartnershi
psal
aryof£5,000.How
muchwasHaslem’
sshareofprofi
t?

a.£3,
060

b.£2,
540

c.£3,
810

d.£4,
950

151. A f
inanci
alst
atementt
hatshowst
hei
nfl
owsandout
fl
owsofcashdur
ingapar
ti
cul
ar
per
iodoft
imei
sknownas:

a.i
ncomest
atement

b.st
atementofr
etai
nedear
nings

c.bal
ancesheet
27|
Page
 d.st
atementofcashf
lows

152. Ast
atementofcashf
lowshas:

a.3sect
ions

b.4sect
ions

c. 5sect
ions

d.6sect
ions

153. Whi
choft
hef
oll
owi
ngi
snotanoper
ati
ngcashf
low?

a.col
l
ect
ionofcashf
rom r
ecei
vabl
es

b.pay
mentofi
ncomet
ax

c. pay
mentofcashf
oroper
ati
ngexpenses

d.pur
chaseofequi
pmentf
orcash

154. Whi
choft
hef
oll
owi
ngi
snotani
nvest
ingcashf
low?

a.pur
chaseofmar
ket
abl
esecur
it
iesf
or$25,
000cash

b.sal
eofl
andf
or$28,
000cash

c. sal
eof2,
500shar
esofcommonst
ockf
or$15each

d.pur
chaseofequi
pmentf
or$500cash

155. Whi
choft
hef
oll
owi
ngi
snotaf
inanci
ngact
ivi
ty:

a.I
ssuanceofbondspay
abl
e
28|
Page
 b.Sal
eofi
nvest
ment

c. Pur
chaseoft
reasur
yst
ock

d.I
ssuanceofcommonst
ock

156. Whi
choft
hef
oll
owi
ngi
snotanon-
cashi
nvest
ingandf
inanci
ngact
ivi
ty?

a.Conv
ersi
onofbondsi
ntocommonst
ock

b.Pur
chaseofl
andbyi
ssui
ngcommonst
ock

c. Conv
ersi
onofpr
efer
redst
ocki
ntocommonst
ock

d.Repay
mentofshor
t-
ter
mloan

157. Si
gni
fi
cantnon-
cashi
nvest
ingandf
inanci
ngact
ivi
ti
esar
erepor
tedi
nthe:

a.oper
ati
ngact
ivi
ti
essect
ionofst
atementofcashf
lows

b.i
nvest
ingact
ivi
ti
essect
ionofst
atementofcashf
lows

c. f
ootnot
esorsepar
atenot
est
othef
inanci
alst
atement
s

d.f
inanci
ngact
ivi
ti
essect
ionofst
atementofcashf
lows

158. Thef
oll
owi
ngdat
abel
ongst
oCar
eCompany
:

 Account
srecei
vabl
eonDecember31,
2016:
$60,
000
 Account
srecei
vabl
eonDecember31,
2017:
$40,
000
 Netcr
edi
tsal
esdur
ingt
hey
ear2017:
$200,
000

Basedont
heabov
einf
ormat
ion,t
henetcashcol
l
ect
edf
rom cust
omer
sbyCar
eCompany
dur
ingt
hey
ear2017i
s:

a.$180,
000

29|
Page
 b.$220,
000
c. 240,
000
d.260,
000
159. Thef
oll
owi
ngdat
abel
ongst
oSof
tCompany
:

 Account
srecei
vabl
eonDecember31,
2016:
$20,
000
 Account
srecei
vabl
eonDecember31,
2017:
$25,
000
 Netcr
edi
tsal
esdur
ingt
hey
ear2017:
$100,
000

Basedont
heabov
einf
ormat
ion,
thet
otalcashcol
l
ect
edf
rom cust
omer
sbySof
tCompanydur
ing
t
hey
ear2017i
s:

a.75,
000

b.120,
000

c. 105,
000

d.$95,
000

160. I
nvent
oryonDecember31,
2016:
$5,
000

I
nvent
oryonDecember31,
2017:
$3,
000

Account
spay
abl
eonDecember31,
2016:
$12,
000

Account
spay
abl
eonDecember31,
2017:
$15,
000

Costofgoodssol
dfort
hey
ear2017:
$50,
000

Basedont
heabov
einf
ormat
ion,
thenetcashpai
dtosuppl
i
ersofi
nvent
orydur
ingt
hey
ear2017i
s:

a.
$49,
000 b.
$55,
000 c.$45,
000 d.$51,
000

161. Underi
ndi
rectmet
hodofpr
epar
ingst
atementofcashf
lows,
depr
eci
ati
onexpenseaf
fect
s:

a.oper
ati
ngact
ivi
ti
essect
ion

b.i
nvest
ingact
ivi
ti
essect
ion

30|
Page
 c. f
inanci
ngact
ivi
ti
essect
ion

d.not
est
othef
inanci
alst
atement
s

162. A companysel
l
sanol
dpi
eceofequi
pmentf
or$5,
000cash.Thebookv
alueoft
he
equi
pmentsol
dis$4,
500.Underi
ndi
rectmet
hod,t
hegai
nof$500(
$5,
000–$4,
500)woul
d
af
fect
:

a.oper
ati
ngact
ivi
ti
essect
ion

b.i
nvest
ingact
ivi
ti
essect
ion

c. f
inanci
ngact
ivi
ti
essect
ion

d.not
est
othef
inanci
alst
atement
s

163. Acompanysel
l
sol
dpl
antf
or$12,
000cash.Thebookv
alueoft
hepl
anti
s$7,
000.Thi
s
t
ransact
ionwoul
daf
fect
:

a.oper
ati
ngact
ivi
ti
es&f
inanci
ngact
ivi
ti
es

b.oper
ati
ngact
ivi
ti
es&i
nvest
ingact
ivi
ti
es

c. f
inanci
ngact
ivi
ti
es&i
nvest
ingact
ivi
ti
es

d.oper
ati
ngact
ivi
ti
esandf
ootnot
es

164. TheJohnCompanysel
l
sit
sdel
i
ver
ytr
ucki
ncur
renty
ear
.Ther
elev
anti
nfor
mat
ioni
sgi
ven
bel
ow:

 Costofdel
i
ver
ytr
uck(
pur
chasedsev
eral
year
sago)
:$25,
000
 Bookv
alueofdel
i
ver
ytr
uck:
$5,
000
 Pr
oceedsf
rom sal
eofdel
i
ver
ytr
uck:
$4,
000

31|
Page
Basedont
heabov
einf
ormat
ion,
theoper
ati
ngact
ivi
ti
essect
ionoft
hest
atementofcashf
lowsof
cur
renty
earwoul
dbeaf
fect
edby
:

a.$5,
000

b.$25,
000

c. $4,
000

d.$1,
000

165. Whi
choft
hef
oll
owi
ngi
temsaf
fect
sneti
ncomebutdoesnotaf
fectcash?

a.Depr
eci
ati
onoff
ixedasset
s

b.Amor
ti
zat
ionofi
ntangi
bleasset
s&bonddi
scount
s

c. Depl
eti
onofnat
ural
resour
ces

d.Al
loft
heabov
e

166. Thei
ndi
rectmet
hodofpr
epar
ingast
atementofcashf
lowsi
sal
soknownas:

a.i
ncomest
atementmet
hod

b.r
econci
l
iat
ionmet
hod

c. bal
ancesheetmet
hod

d.r
ever
semet
hod

167. Thef
oll
owi
ngi
nfor
mat
ionbel
ongst
oNoorMer
chandi
singCompany
:

 Neti
ncome:
$25,
000
 Depr
eci
ati
onexpenses:
$2,
000
 Lossonsal
eofequi
pment
:$100

32|
Page
  Pr
oceedsf
rom sal
eofequi
pment
:$500
 I
ncr
easei
naccount
srecei
vabl
e:$1,
000
 I
ncr
easei
naccount
spay
abl
e:$2,
000
 Decr
easei
ninv
ent
ory
:$400

Basedont
heabov
einf
ormat
ion,
thenetcashpr
ovi
dedbyoper
ati
ngact
ivi
ti
esi
s:

a.$29,
000

b.$28,
500

c. 27,
500

d.24,
300

168. Thest
atementofcashf
lowsi
sdesi
gnedwi
tht
hepur
poseofhel
pinguser
stoassesseach
oft
hef
oll
owi
ng,
except
:

a.t
hemaj
orsour
cesofcashr
ecei
ptsdur
ingt
heper
iod

b.t
her
easonswhynetcashf
lowsf
rom oper
ati
ngact
ivi
ti
esdi
ff
erf
rom neti
ncome

c. t
heabi
l
ityofaent
it
ytor
emai
nli
qui
d

d.t
hepr
ofi
tabi
l
ityoft
heent
it
y

169. TheNor
ther
nCompanyr
epor
tedi
ncomet
axexpenseof$30,
500oni
tsi
ncomest
atement
f
ort
hey
earDecember31,2017.Thecompar
ati
vebal
ancesheetoft
hecompanyshowedt
hat
i
ncomet
axpay
abl
eonDecember31,2016andDecember31,2017was$4,
000and$6,
500
r
espect
ivel
y.

Basedont
heabov
einf
ormat
ion,
cashpay
mentf
ort
hei
ncomet
axdur
ingt
hey
ear2017was:

a.$28,
000

b.$33,
000

c. $34,
500
33|
Page
 d.$37,
000

170. Thel
andaccountwasdebi
tedby$60,
000andcr
edi
tedby$25000dur
ingt
hecur
renty
ear
.
Thei
ncomest
atementr
epor
tedal
ossonsal
eofl
andi
ntheamountof$2,
000.Al
ltr
ansact
ions
r
elat
edt
olandaccountwascasht
ransact
ions.Theset
ransact
ionswoul
dbeshowni
nthe
st
atementofcashf
lowsas:

a.$60,
000cashpr
ovi
dedbyi
nvest
ingact
ivi
ti
es,
and$25,
000cashdi
sbur
sedf
ori
nvest
ing
act
ivi
ti
es

b.$23,
000cashpr
ovi
dedbyi
nvest
ingact
ivi
ti
es,
and$60,
000cashdi
sbur
sedf
ori
nvest
ing
act
ivi
ti
es

c. $25,
000cashpr
ovi
dedbyi
nvest
ingact
ivi
ti
es,
and$60,
000cashdi
sbur
sedf
ori
nvest
ing
act
ivi
ti
es

d.$27,
000cashpr
ovi
dedbyi
nvest
ingact
ivi
ti
es,
and$60,
000cashdi
sbur
sedf
ori
nvest
ing
act
ivi
ti
es

171. Aper
sonwhopur
chasescommonst
ockofacor
por
ati
oni
sknownas:

a.pr
efer
redst
ockhol
der

b.cr
edi
tor

c. bondhol
der

d.commonst
ockhol
der

172. Aper
sonwhopur
chasespr
efer
redst
ockofacor
por
ati
oni
sknownas:

a.pr
efer
redowner

b.pr
efer
redcr
edi
tor

c. pr
efer
redst
ockhol
der
34|
Page
 d.pr
efer
redi
nvest
or

173. Whi
choft
hef
oll
owi
ngst
atement
sisnott
rueaboutpr
efer
redst
ock?

a.Ther
ateofdi
vi
dendi
susual
l
yfi
xed

b.St
ockhol
der
sal
way
shav
eav
oti
ngr
ight

c. St
ockhol
der
s'usual
l
yhav
eapr
efer
enceast
oasset
suponl
i
qui
dat
ionoft
hecor
por
ati
on

d.St
ockhol
der
s'usual
l
yhav
eapr
efer
enceast
odi
vi
dends

174. Whoi
sknownast
her
eal
owneroft
hecor
por
ati
on?

a.Acr
edi
tor

b.Apr
efer
redst
ockhol
der

c. Acommonst
ockhol
der

d.Adi
rect
or

175. Accor
dingt
ocur
rentst
andar
ds,mandat
ori
l
yredeemabl
epr
efer
redst
ocki
srequi
redt
obe
r
epor
tedas:

a.Li
abi
l
ity

b.Equi
ty

c. Asset

d.noneoft
heabov
e

176. Theshar
esofcommonandpr
efer
redst
ockt
hathav
ebeeni
ssuedandout
standi
ngar
e

35|
Page
 r
epor
tedi
nwhi
chsect
ionofbal
ancesheet
?

a.Fi
xesasset
ssect
ion

b.St
ockhol
der
s'equi
tysect
ion

c. Cur
rentasset
s

d.Li
abi
l
iti
essect
ion

177. Anyunpai
ddi
vi
dendi
scar
ri
edf
orwar
dtot
hef
utur
eper
iodsf
orwhi
cht
ypeofst
ock?

a.Commonst
ock

b.Cumul
ati
vepr
efer
redst
ock

c. Non-
cumul
ati
vepr
efer
redst
ock

d.Al
loft
heabov
e

178. TheSout
her
ncompanyi
ssued5,
000shar
esofi
ts$10parv
aluecommonst
ock.These
shar
eswer
eissuedatapr
iceof$25pershar
e.Thecor
rectj
our
nalent
ryt
orecor
dthi
s
t
ransact
ioni
s:

a.Cash$125,
000Dr
;Commonst
ock$125,
000Cr
.

b.Cash$50,
000Dr
;Commonst
ock$50,
000Cr
.

c. Commonst
ock$50,
000Dr
;Addi
ti
onalpai
d-i
ncapi
tal-commonst
ock$75,
000Dr
;Cash
$125,
000Cr
.

d.Cash$125,
000Dr
;Commonst
ock$50,
000Cr
;Addi
ti
onalpai
d-i
ncapi
tal-common
st
ock$75,
000Cr
.

179. Whi
choft
hef
oll
owi
ngi
snotaf
fect
edasar
esul
tofst
ockspl
i
t?

36|
Page
 a.Numberofshar
esout
standi
ng

b.Parv
aluepershar
e

c. Mar
ketv
aluepershar
e

d.Parv
alueoft
otal
shar
esout
standi
ng

180. Thef
oll
owi
ngi
nfor
mat
ionhasbeenext
ract
edf
rom t
hebal
ancesheetofWashi
ngt
on
Cor
por
ati
onasonDecember31,
2017:

 Numberofshar
esofcommonst
ockaut
hor
ized:
200,
000shar
es
 Numberofshar
esofcommonst
ocki
ssuedandout
standi
ng:
80,
000shar
es
 Parv
aluepershar
e:$10

OnJanuar
y1,
2018,
theboar
dofdi
rect
orspr
oposeda7-
for
-5st
ockspl
i
twhi
chwasappr
oved.

The7-
for
-5st
ockspl
i
twoul
dincr
easet
henumberofshar
esi
ssuedandout
standi
ngby
:

a.80,
000

b.280,
000

c. 32,
000

d.112,
000

181. Whi
choft
hef
oll
owi
ngcannotbeacomponentofst
ockhol
der
s’equi
tysect
ionoft
he
bal
ancesheet
?

a.Addi
ti
onal
pai
d-i
ncapi
tal

b.Tr
easur
yst
ock

c. Longt
erml
oan

d.Ret
ainedear
nings

37|
Page
182. Somet
imecompani
esbuy
backt
hei
rownshar
eswhi
char
eknownas:

a.hol
dingst
ock

b.acqui
redst
ock

c. commonst
ock

d.t
reasur
yst
ock

183. Whi
choft
hef
oll
owi
ngi
snott
rueaboutt
reasur
yst
ock?

a.Shar
eshel
dast
reasur
yst
ockar
enotent
it
ledt
odi
vi
dends

b.Shar
eshel
dast
reasur
yst
ockar
enotent
it
ledt
oasset
suponl
i
qui
dat
ion

c. Shar
eshel
dast
reasur
yst
ocki
ncl
udeshar
est
hathasbeenr
eti
redorcancel
l
ed

d.Shar
eshel
dast
reasur
yst
ockhasnov
oti
ngr
ight

184. TheUSCompanyr
epur
chasedi
tsownshar
esofcommonst
ock.Ther
elev
anti
nfor
mat
ion
i
sgi
venbel
ow:

 Numberofshar
esr
epur
chased:
5,000shar
es
 Parv
aluepershar
eofUSCompany
:$10
 Thepr
iceatwhi
chshar
eswer
erepur
chased:
$20pershar
e

Basedont
heabov
einf
ormat
ion,t
hej
our
nalent
ryt
orecor
dther
epur
chaseof5,
000shar
esunder
costmet
hodwoul
dbe:

a.Tr
easur
yst
ock50,
000Dr
;Cash50,
000Cr
.

b.Tr
easur
yst
ock100,
000Dr
;Cash100,
000Cr
.

c. Commonst
ock50,
000Dr
;Cash50,
000Cr
.

38|
Page
 d.Commonst
ock100,
000Dr
;Cash100,
000Cr
.

185. Bookv
aluepershar
eofcommonst
ock=?

a.Tot
alasset
s/No.ofshar
esofcommonst
ockout
standi
ng

b.Neti
ncome/
No.ofshar
esofcommonst
ockout
standi
ng

c. (
Stockhol
der
s'equi
ty-Pr
efer
redst
ock)
/No.ofshar
esofcommonst
ockout
standi
ng

d.St
ockhol
der
s'equi
ty/
No.ofshar
esofpr
efer
redst
ockout
standi
ng

186. Whi
choft
hef
oll
owi
ngf
act
orsmayaf
fectt
hemar
ketpr
iceofpr
efer
redst
ock?

a.Rat
eofdi
vi
dend

b.Rat
eofi
nter
estondebtsecur
it
ies

c. Feat
uresofpr
efer
redst
ock

d.Al
loft
heabov
e

187. Tr
easur
yst
ocki
sa(
n)

a.assetaccount

b.l
i
abi
l
ityaccount

c. cont
raequi
tyaccount

d.noneoft
heabov
e

188. The f
oll
owi
ng i
nfor
mat
ion has been ext
ract
ed f
rom t
he bal
ance sheetofLondon
Cor
por
ati
onasonDecember31,
2017:

 Tot
alst
ockhol
der
s’equi
ty:
$25,
000,
000
 Pr
efer
redst
ock(
issuedandout
standi
ng)
:$5,
000,
000
 Av
erageNo.ofshar
esofcommonst
ockout
standi
ng:
2,000,
000shar
es

39|
Page
Ont
hebasi
sofabov
einf
ormat
ion,
thebookv
aluepershar
eofcommonst
ocki
s:

a.$10.
00

b.$15.
00

c. $2.
50

d.$12.
50

189. Di
vi
dendsi
nar
rear
soncumul
ati
vepr
efer
redst
ockar
edi
scl
osedas:

a.shor
t-
ter
mli
abi
l
iti
es

b.l
ong-
ter
mli
abi
l
iti
es

c. not
est
othebal
ancesheet

d.deduct
ionf
rom st
ockhol
der
s'equi
ty

190. Whi
choft
hef
oll
owi
ngst
atement
sisnott
rueaboutcommonst
ockofal
arge,publ
i
cly
ownedcor
por
ati
on?

a.Theshar
esmaybet
ransf
err
edf
rom onest
ockhol
dert
oanot
her

b.St
ockhol
der
shav
evot
ingr
ight
sint
heel
ect
ionoft
heboar
dofdi
rect
ors

c. St
ockhol
der
shav
ecumul
ati
ver
ightt
orecei
vedi
vi
dends

d.Af
teri
ssuance,
themar
ketv
alueoft
hest
ocki
sunr
elat
edt
oit
sparv
alue

191. I
fapar
tnercannotcl
earhi
sdebt
sondi
ssol
uti
on,t
heot
herpar
tner
smustcl
eart
hesedebt
sint
he
f
oll
owi
ngmanner
:

a.I
nt herati
oofthei
rlastagreedcapi
talbal
ance
b.Debtsaresharedequall
y
c.Partner
shippr
ofit
/l
ossshar i
ngrati
o
d.Debtsshouldnotbeclearedbyotherpart
ners

40|
Page
192. Themainaccountf ordeal
i
ngwi
thpar
tner
shi
pdi
ssol
uti
onwoul
dbe:
a. Appropriat
ion
b. Revaluati
on
c. Dissolut
ion
d. Reali
zati
on

193. Yat
es& Wel
lswer
einpar
tner
shi
pshar
ingpr
ofi
tandl
ossesequal
ly
.Theyadmi
tSpar
ksasa
part
neranddeci
detoshar
eprofi
tsequal
lybetweenthethr
eepar
tners.Goodwi
lli
sval
uedat£60,
000
buti
stobeimmediat
elywr
it
tenoff
.Theeffectoft
hisonYat
es’
capit
alwouldbeto:

a. Decr
easei
tby£10,
000

b. Decr
easei
tby£20,
000

c. I
ncr
easei
tby£10,
000

d. I
ncr
easei
tby£30,
000

194. Whi
choft
hef
oll
owi
ngwoul
dnotbef
oundi
napar
tner
shi
pappr
opr
iat
ionaccount
?

a.I
nter
estonl
oanbypar t
nert
opar
tner
shi
p
b.I
nter
estondrawings
c.Sal
ari
es
d.I
nter
estoncapit
al

195. I
fpar
tner
smai
ntai
nbot
hfi
xedcapi
talandcur
rentaccount
s,whi
choft
hef
oll
owi
ngwoul
dnor
mal
ly
becr
edi
tedt
oapar
tner
’scapi
talaccount
?

a.Int
erestoncapital
b.Profi
tsonr eval
uat
ion
c.Goodwi l
lbeingwri
ttenof
f
d.Lossesonrevaluati
on

196. Adebi
tbal
anceonapar
tner
’scur
rentaccountmusti
ndi
cat
ethat
:

a.Drawi
ngsarehigherthant
heprofitshar
efort
hatyear
b.Theyhavewit
hdrawnmor ethantheyhaveearnedi
nthepar
tner
shi
p
c.Theyhaveacreditbal
anceontheircapi
tal
account
d.Theyarei
nsol
vent

197.Whi
choft
hef
oll
owi
ngwoul
dnotappeari
nal
imi
tedcompany
’sappr
opr
iat
ionaccount
?

a.I
nteri
m divi
dends
b.Transfert
ogener al
reserv
e
c.Transfert
orevaluat
ionreser
ve
d.Proposedtaxat
ion

41|
Page
198.Whi
choft
hef
oll
owi
ngst
atementi
snott
rue?
a.Capi
talcontri
butionsdonothav etobeequalfr
om eachpar tner
b.I
nter
estoncapi talisarewar
df orthedif
fer
entamountsofwor kpar
tner
smayper
for
m
c.Notall
par t
nerscanhav eli
mitedli
abil
it
yinali
mitedpartnership
d.Thepartnershi
pagr eementwillov
erri
dethe1890PartnershipAct

199.Whi
choft
hef
oll
owi
ngi
snotar
equi
rementmadeonaf
ir
m becomi
ngapubl
icl
imi
tedcompany
?

a.Atleasttwomember s
b.I
tmusthav ethewords‘publi
cli
mitedcompany’
ortheabbr
evi
ati
on‘
plc’
aft
eri
tsname
c.Sharesmustbeofferedforsaleont heSt
ockexchange
d.Anaut hor
izedcapi
talofatleast£50,
000

200.Acompanyhasi
ssued50,
000,£1or
dinar
yshar
esand60,
0005% pr
efer
enceshar
esof£1each.I
f
profi
tsavai
labl
efordiv
idendsar
e£5,000andt
hefi
rm wi
shest
ogi
veoutal
lav
ail
abl
epr
ofi
tsasdi
vi
dends
thentheamountgivenoutperor
dinar
yshar
ewoul
dbe:

a.£0.
06
b.£0.
40
c.£0.
10
d.£0.
04
201.Innormalt
radi
ngci
rcumst
ances,
whi
choft
hef
oll
owi
ngwoul
dnotbef
oundi
napar
tner
’scapi
tal
account?
a.Goodwi l
l
.
b.Profi
tsonreval
uat
ion.
c.Lossesondissol
uti
on.
d.Drawings.

202.Whi
choft
hef
oll
owi
ngi
snotacapi
talr
eser
ve?
a.Sharepremium.
b.Fi
xedassetr epl
acement
.
c.Revaluat
ion.
d.Capit
al r
edemption.

203.Oneadv
ant
ageofoper
ati
ngasapar
tner
shi
pwoul
dincl
ude:
a.greaterpowert hanasol etraderfordeci
sionmaking.
b.accesst oalargeramountofi ni
ti
alcapit
al.
c.l
imitedliabi
li
tyforallpartners.
d.beingabl et
or aisecapit
al t
hroughshareissues.

204.Whi
choft
hef
oll
owi
ngwoul
dnotbef
oundi
napar
tner
shi
pappr
opr
iat
ionaccount
?
a.I
nter
estonl
oanbypar tnert
opar
tner
shi
p.
b.Sal
ari
es.
c.I
nter
estondrawings.
d.I
nter
estoncapit
al.

205.Hi
ngeandBacket
tar
einapar
tner
shi
p.Ther
enetpr
ofi
tfort
hey
earwas£45,
000.I
nter
estoncapi
tal
was£250forHingeand£375forBacket
t.Hingewasal soent
it
ledtoasalaryof£5,
000perannum.I
f
Br
acket
tisent
it
ledt
o2/5ofanyr
esi
dualprof
it
s,thenhershar
eoftheprof
it
sforthey
earwoul
dbe:
a.£15,
750.
b.£26,
625.
c.£17,
750.
d.£23,
625.
42|
Page
206.Har
ker&Bel
lwer
einpar
tner
shi
pshar
ingpr
ofi
tandl
ossesequal
ly
.Theyadmi
tTr
aver
seasapar
tner
anddeci detoshar eprof
itsi
ntherat
ioof2:2:1,wi
thTr
aver
serecei
vi
ngt hesmallershar
e.Goodwi
llfr
om
theoldpartnershi
pisv al
uedat£100,
000butistobeimmedi
atel
ywri
ttenoff.Theeff
ectofthi
sonHarker’
s
capi
talwoul dbeto:
a.i
ncreasei
tby£50,000.
b.decreaseit£20,
000.
c.i
ncreaseitby£10,000.
d.decreaseitby£10,000.

207.Anadv
ant
ageofoper
ati
ngasal
imi
tedcompanyr
athert
hanapar
tner
shi
pwoul
dnoti
ncl
ude:

a.potenti
alaccesstogreat
ercapit
alresour
ces.
b.fi
rmi snotconstr
ainedbyreti
rementofpart
ners.
c.thosewhor unthecompanymayhav edif
fer
entobject
ivesf
rom t
hosewhoownt
hecompany
.
d.allownersbenefi
tfrom l
i
mitedli
abil
it
y.

43|
Page