Devry ACCT504 week 8 final exam set 4 23 mcq

1. (TCO A) For 2007 Landford Corporation reported net income
of $30,000; net sales $400,000; and average share outstanding 6,000. There were
no preferred stock dividends. What was the 2007 earnings per share? (Points :
5)
$4.66
$0.20
$66.67
$5.00

2. (TCO C) Free cash flow provides an indication of a
company’s ability to (Points : 5)
generate cash
to invest in new capital expenditures.
generate net
income.
generate cash
to pay dividends.
both a and c.

3. (TCO C) When a corporation distributes a dividend the
(Points : 5)
most common
form of distribution is a cash dividend.
Dividends
account will be increased with a credit.
Retained
Earnings account will be directly increased with a debit.
Dividends
account will be decreased with a debit.

4. (TCO A, B) Cerner Company showed the following balances
at the end of its first year:
Cash
$5,000
Prepaid insurance
500
Accounts receivable
2,500
Accounts payable
2,000
Notes payable
3,000
Common stock
1,000
Dividends
500
Revenues
15,000
Expenses
12,500
What did Cerner Company show as total credits on its trial
balance?
(Points : 5)
$21,500
$21,000
$20,500
$22,000

5. (TCO A, B) The Village Laundry Company purchased $6,500
worth of laundry supplies on June 2 and recorded the purchase as an asset. On
June 30, an inventory of the laundry supplies indicated only $3,000 on hand.
The adjusting entry that should be made by the company on June 30 is (Points :
5)
Debit Laundry
Supplies Expense, $3,000; Credit Laundry Supplies, $3,000.
Debit Laundry Supplies Expense, $3,500;
Credit Laundry Supplies, $3,000.
Debit Laundry
Supplies, $3,500; Credit Laundry Supplies Expense, $3,500.
Debit Laundry
Supplies Expense, $3,500; Credit Laundry Supplies, $3,500.

6. (TCO E) A credit sale of $800 is made on April 25, terms
2/10, net/30, on which a return of $50 is granted on April 28. What amount is
received as payment in full on May 4? (Points : 5)
$735
$784
$800
$750

7. (TCO B) During the year, Darla’s Pet Shop’s merchandise
inventory decreased by $20,000. If the company’s cost of goods sold for the
year was $300,000, purchases must have been (Points : 5)
$320,000.
$280,000.
$260,000.
Unable to determine.

8. (TCO D) A consequence of separation of duties is that
(Points : 5)
theft by
employees becomes impossible.
operations
become extremely inefficient because of constant training of employees.
more employees
will need to be bonded.
theft is still
possible when several employees are involved.

9. (TCO D) Which of the following is not a suggested
procedure to establish internal control over cash disbursements? (Points : 5)
Anyone can
sign the checks.
Different individuals approve and make the
payments.
Blank checks
are stored with limited access.
The bank
statement is reconciled monthly.

10. (TCO A, B, D) An aging of a company’s accounts
receivable indicates that $3,000 is estimated to be uncollectible. If Allowance
for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad
debts for the period will require a (Points : 5)
debit to Bad
Debts Expense for $3,000.
debit to
Allowance for Doubtful Accounts for $1,800.
debit to Bad
Debts Expense for $1,800.
credit to
Allowance for Doubtful Accounts for $3,000.

11. (TCO A, B, D) Using the percentage of receivables method
for recording bad debts expense, estimated uncollectible accounts are $25,000
at the end of the year. If the balance of the Allowance for Doubtful Accounts
is $8,000 debit before adjustment; what is the amount of bad debt expense for
that period? (Points : 5)
$25,000
$8,000
$33,000
$17,000

12. (TCO D) A cash register tape shows cash sales of $3,000
and sales taxes of $150. The journal entry to record this information is
(Points : 5)
Debit Cash
3,000
Credit Sales 3,000
Debit Cash
3,150
Credit Sales Tax Revenue 150
Credit Sales 3,000
Debit Cash
3,000
Debit Sales Tax Expense 150
Credit Sales 3,150
Debit Cash
3,150
Credit Sales 3,000
Credit Sales Taxes Payable 150

13. (TCO D) Joyce Corporation issues 1,000, 10-year, 8%,
$1,000 bonds dated January 1, 2007, at 102. The journal entry to record the
issuance will show a (Points : 5)
debit to Cash
of $1,020,000.
debit to
Discount on Bonds Payable for $20,000.
credit to
Bonds Payable for $1,020,000.
credit to Cash
for $1,000,000.

14. (TCO A) New Corp. issues 1,000 shares of $10 par value
common stock at $14 per share. When the transaction is recorded, credits are
made to: (Points : 5)
Common Stock
$10,000 and Paid-in Capital in Excess of Stated Value $4,000.
Common Stock
$14,000.
Common Stock
$10,000 and Paid-in Capital in Excess of Par Value $4,000.
Common Stock
$10,000 and Retained Earnings $4,000.

15. (TCO A, C) Outstanding stock of the Bell Corporation
included 20,000 shares of $5 par common stock and 10,000 shares of 6%, $10 par
non-cumulative preferred stock. In 2006, Bell declared and paid dividends of
$4,000. In 2007, Bell declared and paid dividends of $12,000. How much of the
2007 dividend was distributed to preferred shareholders? (Points : 5)
$8,000
$14,000
$6,000
None of the
above

16. (TCO C) Accounts receivable arising from sales to
customers amounted to $80,000 and $70,000 at the beginning and end of the year,
respectively. Income reported on the income statement for the year was
$240,000. Exclusive of the effect of other adjustments, the cash flows from
operating activities to be reported on the statement of cash flows is (Points :
5)
$240,000.
$250,000.
$310,000.
$230,000.

17. (TCO F) One variation of the horizontal analysis is
known as (Points : 5)
nonlinear
analysis.
vertical
analysis.
trend analysis.
common size
analysis.

18. (TCO F) Ratios are most useful in identifying (Points :
5)
trends.
differences.
causes.
relationships
among different numbers.

19. (TCO F) Short-term creditors are usually most interested
in assessing (Points : 5)
solvency.
liquidity.
marketability.
profitability.

20. (TCO A) An advantage of the corporate form of business
is that _____. (Points : 5)
it has limited
life
its owner’s
personal resources are at stake
its ownership
is easily transferable via the sale of shares of stock
it is simple
to establish

21. (TCO A) The Dividends account _____. (Points : 5)
is increased with a debit
is decreased
with a credit
is not an
expense account
All of the
above

22. (TCOs A, B) Denton Company showed the following balances
at the end of its first year:

Cash
$7,000
Prepaid insurance
700
Accounts receivable
3,500
Accounts payable
2,800
Notes payable
4,200
Common stock
1,400
Dividends 700
Revenues
21,000
Expenses
17,500

23. What did Denton Company show as total credits on its
trial balance? (Points : 5)
$30,100
$29,400
$28,700
$30,800