1. A three-month note dated June 12 will mature onA. September 12.B. September 1.C. September 30.D. June 12.2. 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 forA. more than $10,000.B. less than $10,000.C. $10,000.D. the maturity value.3. Under the allowance method, recording the receipt of cash after an account has been written off first requires that youA. debit Bad Debt Expense.B. debit Allowance for Doubtful Accounts.C. reinstate the customer’s account.D. audit the customer’s account.4. Skymaster, Inc. has cash of $33,000, net accounts receivable of $41,000, short-term investments of $15,000, and inventory of $25,000. It also has $30,000 in current liabilities and $50,000 in long-term liabilities. What is the current ratio for Skymaster, Inc.?A. 3.80B. 2.47C. 1.48D. 1.435. Subtracting accumulated depletion from the asset account coal mine yields theA. net book value.B. original cost.C. current period’s depletion expense.D. current market value.6. Which of the following is a tangible asset?A. CopyrightB. LandC. GoodwillD. Franchise7. ACME Corporation lent $25,000 to Hastings, Inc. for 75 days at 7% interest on November 22, 2014. How much interest will have accrued to ACME Corporation on December 31, 2014, assuming a 360-day year?A. $175.00B. $189.58C. $364.58D. $204.528. At the end of a/ an _______ lease, the lessee will return the asset to the lessor.A. transferringB. incompleteC. operatingD. capital9. If an asset produces more revenue in its early years, the depreciation method best suited for this asset is theA. units-of-production method.B. straight-line method.C. double-declining balance method.D. expense method.10. Proceeds from credit card and debit card transactions are generally deposited into a business’s bank account withinA. a week.B. one to three days.C. three to five days.D. a month.11. 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) isA. debit Interest expense, $7,000; debit Mortgage expense, $735; credit Cash, $7,735.B. debit Mortgage payable, $7,735; credit Cash, $7,735.C. debit Interest expense, $7,000; debit Mortgage payable, $735; credit Cash, $7,735.D. debit Interest expense, $735; debit Mortgage payable, $7,000; credit Cash, $7,735.12. After the mailroom employee opens the cash receipts, the remittance advices go to theA. treasurer.B. controller.C. bank.D. accounting department.13. Interest and dividends earned during the period are reported on the income statement for which marketable securities?A. All types of securitiesB. Held-to-maturity securitiesC. Trading securitiesD. Available-for-sale securities14. Which of the following is considered an estimated liability?A. Warranties payableB. Sales tax payableC. Notes payableD. Pending litigation15. Which of the following would be included in the cost of land?A. FencingB. In-ground sprinkler systemsC. Unpaid property taxesD. Required paving16. A $450 collection on a note from a customer is reflected on Columbia Electric’s bank statement. When doing the bank reconciliation, Columbia shouldA. subtract $450 from their book balance.B. subtract $450 from the bank balance.C. add $450 to the bank balance.D. add $450 to their book 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. $4,250B. $6,342C. $5,525D. $7,15918. Fixed assets are also called _______ assets, or tangible assets.A. saleableB. naturalC. propertyD. plant19. The carrying amount equals Bonds Payable minus the discount amount orA. minus the premium amount.B. plus half the discount amount.C. minus the par amount.D. plus the premium amount.20. Which of the following would not be considered a cash equivalent?A. Certificates of depositsB. Treasury notesC. Time depositsD. Coin21. Which of the following accounts is credited in a journal entry for a like-kind asset exchange?A. Tires (new)B. Accumulated Depreciation for truck (old)C. Truck (old)D. Loss on Exchange of Assets22. The ________ verifies the amount of the deposit and the total amount posted to the cash account.A. bankB. controllerC. accounting departmentD. treasurer23. The following is selected data for Allied Industries:Allied Industries 2014 2013Sales $1,642,000 $1,743,000Net Income $173,000 $191,000Total Current Assets $177,000 $163,000Property, Plant, and Equipment $724,000 $644,000What is the return on assets (rounded to the nearest tenth of a percent) for 2014?A. 19.2B. 20.3C. 23.9D. 25.324. The maturity value equalsA. the interest due by the maturity date.B. the principal plus interest paid.C. the interest due minus interest paid.D. the principal plus all interest due.25. The processing of credit card and debit card transactions is generally doneA. at the financial institution of the retailer.B. at the retail site.C. over the Internet.D. by hired third parties.26. If a company has 90-day credit terms, its expected accounts receivable turnover isA. 4.B. 2.C. 12.D. 1.27. The Premium on Bonds Payable account is added to the Bonds Payable account, so it’s called a/ an _______ account.A. adjunctB. contraC. premiumD. aspect28. On January 1, $400,000 of 12%, 10-year bonds were sold for $380,000. The bonds require semiannual interest payments on June 30 and December 31. The journal entry for the June 30 interest payment isA. debit Interest expense $25,000; credit Discount on bonds payable, $1,000; credit Cash, $24,000.B. debit Interest expense $24,000; credit Cash, $24,000.C. debit Interest expense $23,000; debit Discount on bonds payable, $1,000; credit Cash, $24,000.D. debit Interest expense $25,000; credit Cash, $25,000.29. Which of the following would be debited to the Equipment account?A. Insurance to cover use of the machineB. In-transit insurance costsC. Repairs and maintenance after start-upD. Training employees to use the equipment30. A company signs a note payable for $3,500 at 9% for 45 days. How much interest (to the nearest cent) will the company owe using a 360-day year?A. $315.00B. $354.38C. $38.84D. $39.3831. Henderson Roofing made a basket purchase of three items for $125,000. Item A is appraised at $35,000; item B is appraised at $55,000; and item C is appraised at $60,000. Item B should be recorded in the amountA. ($55,000/$95,000) Ã $150,000.B. ($55,000/$150,000) Ã $125,000.C. ($55,000/$95,000) Ã $125,000.D. ($55,000/$125,000) Ã $150,000.32. Outstanding checks areA. subtracted from the bank balance.B. added to the bank balance.C. added to the book balance.D. subtracted from the book balance.33. The disclosure of a contingent liability only in the footnotes designates that an actual obligation isA. probable.B. remote.C. certain.D. possible.34. A new vehicle was purchased on January 1 for $38,000. It has a salvage value of $7,000 and a useful life of 5 years. Using the straight-line method, how much will the depreciation expense for the vehicle be for the first year (to the nearest dollar)?A. $517B. $633C. $7,600D. $6,20035. 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. $11,771B. $5,357C. $12,857D. $4,90536. Subway restaurants and the Seattle Mariners are both examples ofA. franchises.B. copyrighted companies.C. trademarked entities.D. patents.37. Interest rates are almost always stated for a period ofA. one-tenth of the note term.B. one year.C. six months.D. one quarter.38. Briggs Corp. will remove two small buildings from a newly-purchased piece of land. The expense required to do this is part of theA. building cost.B. land improvements total.C. capitalized asset.D. cost of land.39. Budget Auto signed a $45,000, 8%, 30-year installment note on November 1, 2014. The note requires semiannual payments of $750 plus interest on May 1 and November 1 of each year. How will Budget Auto classify this loan on its December 31, 2014 Balance Sheet?A. Current portion of long-term debt, $0; long-term debt, $45,000B. Current portion of long-term debt, $1,500; long-term debt, $43,500C. Current portion of long-term debt, $750; long-term debt, $44,250D. Current portion of long-term debt, $45,000; long-term debt, $040. Which accounting principle dictates whether the cost of a repair should be expensed?A. ConservatismB. ObjectivityC. MatchingD. Entity41. Bonds that can be exchanged for stock are called _______ bonds.A. serialB. debentureC. callableD. convertible42. Capital leases are most similar toA. accounts payable.B. unearned revenue.C. mortgage notes.D. regular notes payable.43. Taxes are an example of a/an _______ liability.A. contingentB. knownC. accruedD. estimated44. Import Auto reported interest expense of $5,200, income tax expense of $23,000, and net income of $78,000. What is Import Auto’s interest coverage ratio (rounded to two decimals)?A. 0.50B. 20.42C. 19.42D. 0.0545. The journal entry for $300,000 of bonds that are issued at 95 isA. debit Cash, $285,000; debit Discount on bonds payable, $15,000; credit Bonds payable, $300,000.B. debit Cash, $300,000; credit Bonds payable, $285,000; credit Premium on bonds payable, $15,000.C. debit Cash, $285,000; credit Bonds payable, $285,000.D. debit Cash, $300,000; credit Bonds payable, $300,000.46. 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. 17.1%B. 29.2%C. 70.8%D. 41.2%47. Quick ratio is another name for the _______ ratio.A. acid-testB. currentC. unadjustedD. net
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