1. A three-month note dated June 12 will mature on A. June 12.
B. September 12.
C. September 1.
D. September 30.
2. Which accounting principle dictates whether the cost of a repair should be expensed? A. Matching
3. The following is selected data for Allied Industries:
What is the return on assets (rounded to the nearest tenth of a percent) for 2014?
Allied Industries 2014 2013
Sales $1,642,000 $1,743,000
Net Income $173,000 $191,000
Total Current Assets $177,000 $163,000
Property, Plant, and Equipment $724,000 $644,000
4. Which of the following would be debited to the Equipment account? A. Repairs and maintenance after start-up
B. Insurance to cover use of the machine
C. Training employees to use the equipment
D. In-transit insurance costs
5. Under the allowance method, recording the receipt of cash after an account has been written off first requires that you A. debit Bad Debt Expense.
B. reinstate the customer’s account.
C. audit the customer’s account.
D. debit Allowance for Doubtful Accounts.
6. Haskins, Inc. has total assets of $600,000, total liabilities of $175,000, and total stockholders’ equity of $425,000. What is Haskins’ debt ratio? A. 70.8%
7. Briggs Corp. will remove two small buildings from a newly-purchased piece of land. The expense required to do this is part of the A. capitalized asset.
B. cost of land.
C. building cost.
D. land improvements total.
8. Interest rates are almost always stated for a period of A. one-tenth of the note term.
B. one year.
C. one quarter.
D. six months.
9. On January 1, Bestway, Inc. signed a $175,000, 8%, 30-year mortgage that requires semiannual payments of $7,735 on June 30 and December 31 of each year. The journal entry for the first semiannual payment (with interest rounded to the nearest dollar) is A. debit Interest expense, $7,000; debit Mortgage payable, $735; credit Cash, $7,735.
B. debit Interest expense, $7,000; debit Mortgage expense, $735; credit Cash, $7,735.
C. debit Interest expense, $735; debit Mortgage payable, $7,000; credit Cash, $7,735.
D. debit Mortgage payable, $7,735; credit Cash, $7,735.
10. The ________ verifies the amount of the deposit and the total amount posted to the cash account. A. treasurer
B. accounting department
11. Which of the following would be included in the cost of land? A. Fencing
B. Unpaid property taxes
C. Required paving
D. In-ground sprinkler systems
12. A building was purchased on August 1 for $450,000. The building has a salvage value of $38,000 and a useful life of 35 years. Using the straight-line method, how much is the depreciation expense for the building for the first year, ending December 31 (to the nearest dollar)? A. $11,771
13. Outstanding checks are A. added to the book balance.
B. subtracted from the bank balance.
C. subtracted from the book balance.
D. added to the bank balance.
14. A $10,000 bond issued with a stated interest rate of 7%, when the market rate of interest is 8%, means that the bond will be sold for A. the maturity value.
B. more than $10,000.
C. less than $10,000.
15. Subway restaurants and the Seattle Mariners are both examples of A. patents.
C. trademarked entities.
D. copyrighted companies.
16. A $450 collection on a note from a customer is reflected on Columbia Electric’s bank statement. When doing the bank reconciliation, Columbia should A. subtract $450 from their book balance.
B. add $450 to their book balance.
C. subtract $450 from the bank balance.
D. add $450 to the bank balance.
17. Renaud, Inc. has credit sales of $85,000 for the period. The balance in Allowance for Doubtful Accounts is a debit of $817. If Renaud uses the aging method to estimate uncollectible accounts and an aging of accounts receivable reflected an estimated amount of uncollectible accounts of $6,342, what is the credit to Allowance for Doubtful Accounts? A. $5,525
End of exam
18. The journal entry for $300,000 of bonds that are issued at 95 is A. debit Cash, $300,000; credit Bonds payable, $300,000.
B. debit Cash, $285,000; debit Discount on bonds payable, $15,000; credit Bonds payable, $300,000.
C. debit Cash, $285,000; credit Bonds payable, $285,000.
D. debit Cash, $300,000; credit Bonds payable, $285,000; credit Premium on bonds payable, $15,000.
19. Which of the following is considered an estimated liability? A. Pending litigation
B. Notes payable
C. Sales tax payable
D. Warranties payable
20. Interest and dividends earned during the period are reported on the income statement for which marketable securities? A. Trading securities
B. Available-for-sale securities
C. Held-to-maturity securities
D. All types of securities