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ACCT 504 WEEK 8 FINAL EXAM ALL 4 SETS DEVRY

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ACCT 504 WEEK 8 FINAL


EXAM ALL 4 SETS - DEVRY
ACCT 504 SET 1
Question 1. 1. (TCOs A, B, and C) Which type of corporate information is not available to investors?
(Points : 3)
Dividend history
Forecast of cash needs for the upcoming year
Cash provided by investing activities
Beginning cash balance
Question 2. 2. (TCO C) Debt securities sold to investors that must be repaid at a particular date
some years in the future are called (Points : 3)
accounts payable.
notes receivable.
taxes payable.
bonds payable.
Question 3. 3. (TCO C) Buying and selling products are examples of (Points : 3)
operating activities.
investing activities.
financing activities.
delivering activities.
Question 4. 4. (TCO A) The cost of assets consumed or services used is also known as (Points : 3)
a revenue.
an expense.

a liability.
an asset.
Question 5. 5. (TCO C) Finley Company recorded the following cash transactions for the year.
Paid $90,000 for salaries
Paid $40,000 to purchase office equipment
Paid $10,000 for utilities
Paid $4,000 in dividends
Collected $150,000 from customers
What was Finleys net cash provided by operating activities? (Points : 3)
$50,000
$10,000
$60,000
$46,000
Question 6. 6. (TCO A) On a classified balance sheet, prepaid insurance is classified as (Points : 3)
an intangible asset.
property, plant, and equipment.
a current asset.
a long-term investment.
Question 7. 7. (TCO A) An intangible asset (Points : 3)
may have the capacity to earn revenue for its owner.
is worthless because it has no physical substance.
is converted into a tangible asset during the operating cycle.
cannot be reported on the balance sheet because it lacks physical substance.
Question 8. 8. (TCO A) The following are selected account balances on December 31, 2010.
-Land (location of the corporations office building): $100,000
-Land (held for future use): 150,000
-Corporate Office Building: 600,000
-Inventory: 200,000
-Equipment: 450,000
-Office Furniture: 100,000
-Accumulated Depreciation: 300,000
What is the total NET amount of property, plant, and equipment that will appear on the balance

sheet? (Points : 3)
$1,300,000
$1,100,000
$1,600,000
$950,000
Question 9. 9. (TCO B) For 2010, 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 2010 earnings per share? (Points : 3)
$4.66
$0.20
$66.67
$5.00
Question 10. 10. (TCO B) At December 31, 2010, Shorts Company had retained earnings of
$2,184,000. During 2010 they issued stock for $98,000, and paid dividends of $34,000. Net income
for 2010 was $402,000. The retained earnings balance at the beginning of 2010 was: (Points : 3)
$2,552,000
$1,816,000
$1,914,000
$2,454,000
Question 11. 11. (TCO D) Money collected from customers before the work is done is treated as
(Points : 3)
prepaid expenses.
accrued revenues.
unearned revenues.
accrued expenses.
Question 12. 12. (TCO D) An account is a part of the financial information system and is described
by all except which one of the following? (Points : 3)
An account has a debit and credit side.
An account has to be in paper form.
An account has a zero or nonzero balance.
An account has a title.
Question 13. 13. (TCO D) Which of the following describes the classification and normal balance of
the retained earnings account? (Points : 3)
Asset, debit
Stockholders equity, credit
Revenues, credit

Expense, debit
Question 14. 14. (TCO D) In recording an accounting transaction in a double-entry system (Points :
3)
the number of debit accounts must equal the number of credit accounts.
there must always be entries made on both sides of the accounting equation.
the amount of the debits must equal the amount of the credits.
there must only be two accounts affected by any transaction.
Question 15. 15. (TCO D) Which of the following accounts follows the rules of debit and credit in
relation to increases and decreases in the opposite manner? (Points : 3)
Prepaid insurance and dividends
Dividends and medical fees earned
Interest payable and common stock
Advertising expense and land
Question 16. 16. (TCO E) An accounting time period that is 1 year in length is called (Points : 3)
a fiscal year.
an interim period.
the time period assumption.
a reporting period.
Question 17. 17. (TCO E) In a service-type business, revenue is considered earned (Points : 3)
at the end of the month.
at the end of the year.
when the service is performed.
when cash is received.
ACCT 504 Final Exam Set 2
1. Which of the following is an advantage of corporations relative to partnerships and sole
proprietorships?
Reduced legal liability for investors
Harder to transfer ownership
Lower taxes
Most common form of organization
2. Dividends _____.
represent an expense and are an operating activity
represent an obligation and are an operating activity

represent a distribution of earnings and are a financing activity


represent an asset and are an investing activity
3. Below is a partial list of account balances for LBJ Company:
Cash $15,000
Prepaid insurance 5,000
Accounts receivable 2,500
Accounts payable 3,000
Notes payable 6,000
Common stock 10,000
Dividends 500
Revenues 15,000
Expenses 13,000
What did LBJ Company show as total debits?
$34,000
$36,000
$70,000
$31,000
4. Under the accrual basis of accounting, revenues are recorded and reported _____.
when companies receive payments for jobs performed or products provided
when companies have provided products or performed services
when companies receive payments prior to providing products or performing services
when companies receive payments after providing products or performing services
5. In a period of increasing prices, which inventory cost flow assumption will result in the highest
amount of net income?
LIFO
The average cost method
FIFO
Income tax expense for the period will be the same under all assumptions.
6. Equipment was purchased for $55,000 on January 1, 2011. Freight charges of $2,200 were
incurred and there was a cost of $1,800 for installation. It is estimated the equipment will have a

$5,500 salvage value at the end of its 5-year useful life. Depreciation expense for 2011 using the
straight-line method will be _____.
$10,340
$10,700
$10,260
$9,900
7. Payne Corporation issues 100 twenty-year, 6%, $1,000 bonds dated July 1, 2010, at 94. The
journal entry to record the issuance will show a _____.
debit to Cash of $100,000
credit to Bonds Payable of $94,000
credit to Premium on Bonds Payable of $4,000
debit to Discount on Bonds Payable of $6,000
8. Accounts receivable arising from sales to customers amounted to $80,000 and $120,000 at the
beginning and end of the year, respectively. Income reported on the income statement for the year
was $2,000,000. Exclusive of the effect of other adjustments, the cash flows from operating activities
to be reported on the statement of cash flows is _____.
$2,040,000
$2,000,000
$1,200,000
$1,960,000
9. If you are making comparisons within a company to detect changes in financial relationships and
significant trends, you are performing what type of analysis?
Industry averages analysis
Intercompany analysis
Common-size analysis

Intracompany analysis
10. The formula for performing horizontal analysis is _____.
(Current Year Amount minus Base Year Amount) divided by Current Year Amount
Base Year Amount divided by Current Year Amount
Current Year Amount minus Base Year Amount
(Current Year Amount minus Base Year Amount) divided by Base Year Amount
11.Horizontal analysis of comparative financial statements includes the _____.
development of common-size statements
calculation of liquidity ratios
calculation of dollar amount changes and percentage changes from the previous year to the current
year
evaluation of financial statement data that expresses each item in a financial statement as a
percentage of a base amount
12. A common measure of solvency is the _____.
asset turnover
current cash debt coverage ratio
cash debt coverage ratio
current ratio
13. Stockholders would be most interested in which of the following ratios?
Days in inventory
Free cash flow

Current ratio
Average collection period
14. To calculate the market value of a bond, we need to _____.
multiply the bond price times the interest rate
calculate the present value of the principal only
calculate the present value of the interest only
calculate the present value of both the principal and interest payments
ACC 504 Final Exam Set 3
1. (TCO B) The following selected data was retrieved from the Wal-Mart, Inc. financial statements for
the year ending January 31, 2013:
Accounts Payable
$38,080
Accounts Receivable
6,768
Cash
7,781
Common Stock
3,952
Cost of Goods Sold
352,488
Income Tax Expense

7,981
Interest Expenses
2,064
Membership Revenues
3,048
Net Sales
466,114
Operating, Selling and Administrative Expenses
88,873
Retained Earnings
72,978
Required:
Using the information provided above:
1. Prepare a multiple-step income statement
2. Calculate the Profit Margin, and Gross profit rate for the company. Be sure to provide the formula
you are using, show your calculations, and discuss your findings/results.
(Points : 36)
3. (TCO C) Please review the following real-world Hewlett Packard Statement of Cash flows and
address the 2 questions below:
Cash flow from operating activities
In millions
In millions
For the year ended 2012

For the year ended 2011


Net (loss) earnings
$(12,650)
$7,074
Depreciation and amortization
5,095
4,984
Impairment of goodwill and purchased intangible assets
18,035
885
Stock-based compensation expense
635
685
Provision for doubtful accounts
142
81
Provision for inventory
277
217
Restructuring charges

2,266
645
Deferred taxes on earnings
(711)
166
Excess tax benefit from stock-based competition
(12)
(163)
Other, net
265
(46)
Accounts and financing receivables
1,269
(227)
Inventory
890
(1,252)
Accounts payable
(1,414)
275

Taxes on earnings
(320)
610
Restructuring
(840)
(1,002)
Other assets and liabilities
(2,356)
(293)
Net cash provided by operating activities
10,571
12,639
Cash flows from investing activities:
Investment in property, plant, and equipment
(3,706)
(4,539)
Proceeds from sale of property, plant, and equipment
617
999
Purchases of available-for-sale securities and other investments

(972)
(96)
Maturities and sales of available-for-sale securities and other investment
662
68
Payments in connection with business acquisitions, net of cash acquired
(141)
(10,480)
Proceeds from business divestiture, net
87
89
Net cash used in investing activities
(3,453)
(13,959)
Cash flow from financing activities:
(Payments) issuance of commercial paper and notes payable, net
(2,775)
(1,270)
Issuance of debt
5,154

ACCT 504 Final Exam Set 4

Page 1
Question 1. 1. (TCO A) Which one of the following is an advantage of corporations relative to
partnerships and sole proprietorships? (Points : 5)
Reduced legal liability for investors
Harder to transfer ownership
Lower taxes
Most common form of organization
Question 2. 2. (TCO A) When a corporation distributes a dividend, _____. (Points : 5)
the most common form of distribution is a cash dividend
the Dividends account will be increased with a credit
the Retained Earnings account will be directly increased with a debit
the Dividends account will be decreased with a debit
Question 3. 3. (TCOs A, B) Below is a partial list of account balances for Cerner Company:
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? (Points : 5)
$21,500
$21,000
$20,500
$22,000

Question 4. 4. (TCOs B, E) Using accrual accounting, expenses are recorded and reported only
_____. (Points : 5)
when they are incurred, whether or not cash is paid
when they are incurred and paid at the same time
if they are paid before they are incurred
if they are paid after they are incurred
Question 5. 5. (TCO D) Three companies report the same cost of goods available for sale, but each
employs a different inventory costing method. If the price of goods has increased during the period,
then the company using _____. (Points : 5)
LIFO will have the highest ending inventory
FIFO will have the highest cost of goods sold
All three companies will have the same value for ending inventory.
average cost will have an ending inventory value that falls between FIFO and LIFO
Question 6. 6. (TCOs A, E) Equipment with a cost of $192,000 has an estimated salvage value of
$18,000 and an estimated life of 4 years or 12,000 hours. It is to be depreciated by the straight-line
method. What is the amount of depreciation for the first full year, during which the equipment was
used 3,300 hours? (Points : 5)
$48,000
$52,500
$49,500
$43,500
Question 7. 7. (TCOs D, G) Joyce Corporation issues 1,000 ten-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
Question 8. 8. (TCO C) Accounts receivable arising from sales to customers amounted to $35,000
and $40,000 at the beginning and end of the year, respectively. Income reported on the income
statement for the year was $120,000. 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)
$120,000

$125,000
$155,000
$115,000
Question 9. 9. (TCO F) If you are comparing the 2010 income statement numbers with the income
statement numbers from 2009 and 2008, you are conducting a _____. (Points : 5)
common-size analysis
horizontal analysis
vertical analysis
ratio analysis
Question 10. 10. (TCO F) Comparisons of data within a company are an example of the following
comparative basis. (Points : 5)
Industry averages
Intercompany
Intracompany
Interregional
Question 11. 11. (TCO F) In vertical analysis, the base amount for studying salary and wages
expense is generally _____. (Points : 5)
net sales
salary and wages expense in a previous year
gross profit
net income
Question 12. 12. (TCO F) Short-term creditors are usually most interested in assessing _____.
(Points : 5)
solvency
liquidity
marketability
profitability
Question 13. 13. (TCO F) Return-on-assets ratio is most closely related to _____. (Points : 5)
profit margin and debt-to-total-assets ratio
profit margin and asset-turnover ratio
times interest earned and debt-to-stockholders equity ratio
profit margin and free cash flow

Question 14. 14. (TCO G) The present value of a bond is a function of which factors below? (Points :
5)
The market interest rate
The length of time until the amounts are received
The dollar amounts to be received
All of the above

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