ACC 291 Week 5 Final Exam

ACC 291 Week 5 Final Exam

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https://zh.scribd.com/document/340327850/Uop-Tutorial

 ACC 291 Week 5 Final Exam
 

 

 

Multiple Choice Question 60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The term “receivables” refers to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
cash to be paid to debtors.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
amounts due from individuals or companies.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
merchandise to be collected from individuals or companies.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
cash to be paid to creditors.
 

 

 

Multiple Choice Question 70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Three accounting issues associated with accounts receivable are

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
accrual, bad debts, and accelerating collections.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
depreciating, valuing, and collecting.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
recognizing, valuing, and accelerating collections.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
depreciating, returns, and valuing.
 

 

 

Multiple Choice Question 82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
a sale is made.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
an account becomes bad and is written off.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
management estimates the amount of uncollectibles.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
a customer’s account becomes past due.
 

 

 

Multiple Choice Question 175

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Which one of the following is not a principle of sound accounts receivable management?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Determine a payment period.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Delay cash receipts from receivables if necessary.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Determine to whom to extend credit.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Monitor collections.
 

 

 

Multiple Choice Question 176

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The accounts receivable turnover is computed by dividing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
total sales by average receivables.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
total sales by ending receivables.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
net credit sales by average receivables.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
net credit sales by ending receivables.
 

 

 

Multiple Choice Question 177

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The accounts receivable turnover is used to analyze

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
profitability.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
liquidity.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
risk.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
long-term solvency.
 

 

 

Multiple Choice Question 190

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The following information is provided for Sheridan Company and Concord Corporation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in $ millions)
Sheridan Company
Concord Corporation
Net income 2017
  $170
  $390
Net sales 2017
1625
4550
Total assets 12/31/15
1005
2280
Total assets 12/31/16
1160
3080
Total assets 12/31/17
1160
4000
 

What is Concord’s return on assets (rounded) for 2017?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
11.0%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
9.8%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
14.6%
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
12.7%
 

 

 

Multiple Choice Question 48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Which of the following is not properly classified as property, plant, and equipment?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Building used as a factory.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Land used in ordinary business operations.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Land improvement, such as parking lots and fences.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
A truck held for resale by an automobile dealership.
 

 

 

Multiple Choice Question 49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

A characteristic of a plant asset is that it is

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
held for sale in the ordinary course of the business.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
not currently used in the business but held for future use.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
intangible.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
used in the operations of a business.
 

 

 

Multiple Choice Question 69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

A current liability is a debt that can reasonably be expected to be paid

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
out of currently recognized revenues.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
out of cash currently on hand.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
within one year, or the operating cycle, whichever is longer.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
between 6 months and 18 months.
 

 

 

Multiple Choice Question 70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Which of the following most likely would be classified as a current liability?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Dividends payable
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Bonds payable in 5 years
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Mortgage payable as a single payment in 10 years
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Three-year notes payable
 

 

 

Multiple Choice Question 210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The 2017 financial statements of Sunland Company contain the following selected data (in millions).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets
$75
Total assets
185
Current liabilities
39
Total liabilities
64
Cash
9
Interest expense
4
Income taxes
11
Net income
13
 

The debt to assets ratio (rounded) is

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
52.0%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
2.89%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
34.6%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
7.7 times.
 

 

 

Multiple Choice Question 207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

In a recent year Monty Corp. had net income of $152000, interest expense of $28700, and income tax expense of $41500. What was Monty Corp.’s times interest earned (rounded) for the year?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
6.30
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
5.30
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
7.74
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
6.74
 

 

 

Multiple Choice Question 168

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

If bonds are issued at a discount, it means that the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
bondholder will receive effectively less interest than the contractual rate of interest.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
market interest rate is lower than the contractual interest rate.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
market interest rate is higher than the contractual interest rate.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
financial strength of the issuer is suspect.
 

 

 

Multiple Choice Question 161

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

If bonds are issued at a premium, the stated interest rate is

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
adjusted to a higher rate of interest.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
higher than the market rate of interest.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
lower than the market rate of interest.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
too low to attract investors.
 

 

 

Multiple Choice Question 50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The chief accounting officer in a company is known as the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
vice-president.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
treasurer.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
controller.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
president.
 

 

 

Multiple Choice Question 51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Which one of the following would not be considered an advantage of the corporate form of organization?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Limited liability of stockholders.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Separate legal existence.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Continuous life.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Government regulation.
 

 

 

Multiple Choice Question 54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Which of the following would not be true of a privately held corporation?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Its shares are regularly traded on the New York Stock Exchange.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
It does not offer its shares for sale to the general public.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
It is sometimes called a closely held corporation.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
It is usually smaller than a publicly held company.
 

 

 

Multiple Choice Question 200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
.
 
 
 

The following information pertains to Blue Company. Assume that all balance sheet amounts represent average balance figures.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets
$400000
Stockholders’ equity-common
280000
Total stockholders’ equity
282000
Sales revenue
108000
Net income
22000
Number of shares of common stock
6000
Common dividends
6100
Preferred dividends
6600
 

What is Blue’s payout ratio?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
27.73%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
21%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
13%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
41%.
 

 

 

Multiple Choice Question 195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Concord Corporation had net income of $67245 and paid dividends of $38000 to common stockholders and $16500 to preferred stockholders in 2017. Concord Corporation common stockholders’ equity at the beginning and end of 2017s was $450000 and $545000, respectively. Concord Corporation return on common stockholders’ equity is

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
10%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
5%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
14%.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
9%.
 

 

Multiple Choice Question 44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The primary purpose of the statement of cash flows is to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
provide information about the cash receipts and cash payments during a period.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
provide information about the investing and financing activities during a period.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
prove that revenues exceed expenses if there is a net income.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
facilitate banking relationships.
 

 

 

 

Multiple Choice Question 43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Which one of the following items is not generally used in preparing a statement of cash flows?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Additional information.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Adjusted trial balance.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Current income statement.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Comparative balance sheets.
 

 

 

Multiple Choice Question 54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The category that is generally considered to be the best measure of a company’s ability to continue as a going concern is

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
usually different from year to year.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
cash flows from operating activities.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
cash flows from investing activities.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
cash flows from financing activities.
 

 

 

Multiple Choice Question 69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, a stock dividend declared and issued would be classified on the statement of cash flows.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Financing activities section.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Does not represent a cash flow.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Investing activities section.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Operating activities section.
 

 

 

Multiple Choice Question 71

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, an inventory increase with cash would be classified on the statement of cash flows.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Investing activities section.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Financing activities section.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Operating activities section.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Does not represent a cash flow.
 
 
 
 
 

Multiple Choice Question 153

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
.
 
 
 

Free cash flow provides an indication of a company’s ability to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
generate net income.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
generate cash to invest in capital expenditures.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
generate cash to pay dividends.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
generate cash to invest in capital expenditures and to pay dividends.
 

 

 

Multiple Choice Question 147

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

When using the indirect method to compute cash provided by operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
decreases in inventory are subtracted from net income.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
income taxes paid may be ignored.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
amortization expense is added to net income.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
increases in accounts receivable are added to net income.
 

 

 

Multiple Choice Question 138

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

To determine the net cash provided (used) by operating activities, it is necessary to analyze

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
the current year’s income statement.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
a comparative balance sheet.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
additional information.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
all of these answer choices are correct.
 
 
 
 
 

Multiple Choice Question 196

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

Which of these is not a liquidity ratio?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Inventory turnover
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Accounts receivable turnover
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Current ratio
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Asset turnover
 

 

 

Multiple Choice Question 193

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Your answer is correct.
 
 
 

The current ratio would be of most interest to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
short-term creditors.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
long-term creditors.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
customers.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
stockholders.
 

 
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