Accounting Final Practice Test

When are current liabilities expected to be paid?

How much is a $30,000, 8%, 9-month note payable interest payment at maturity?

Metropolitan Symphony sells 200 season tickets for $60,000 that represents a five concert season. How much is the amount of Unearned Ticket Revenue after the second concert?

A note that is not paid on maturity is considered ___.

From a liquidity standpoint, it is more desirable for a company to have current ___.

On October 1, Steve's Carpet Service borrows $400,000 from First National Bank on a 3-month, $400,000, 8% note. What entry must Steve's Carpet Service make on December 31 before financial statements are prepared?

Sales taxes collected by a retailer are recorded by

On October 1, 2015, Pennington Company issued a $40,000, 10%, 9-month interest-bearing note. If the Pennington Company is preparing financial statements at December 31, 2015, the adjusting entry for accrued interest will include a:

A retail store credited the Sales account for the sales price and the amount of sales tax on sales. If the sales tax rate is 5% and the balance in the Sales account amounted to $315,000, what is the amount of the sales taxes owed to the taxing agency?

A contingent liability should be disclosed when

Layton Company does not ring up sales taxes separately on the cash register. Total receipts for October amounted to $31,500. If the sales tax rate is 5%, what amount must be remitted to the state for October's sales taxes?

Long term debt

The basic formula for calculating the interest on a note is:

Mason Company is borrowing $25,000 and issues a note payable. The $25,000 is the:

Interest calculated for one year on a $1,000, 12% promissory note is:

A promissory note:

An advantage of a promissory note receivable over an accounts receivable is to:

The date a promissory note is due is the:

Most notes are

Current liabilities are normally expected to be paid within:

If a retailer sells goods for a total price of $200, which includes a 5% sales tax, what is the amount of sales tax?

From a liquidity standpoint, it is most desirable for a company to have current

If you are able to earn an 8% rate of return, what amount would you need to invest to have $3,000 one year from now?

The interest charged on a $100,000 note payable, at the rate of 9%, on a 60-day note would be

Bonds that may be exchanged for common stock at the option of the bondholders are called

If bonds with a face value of $30,000 are converted into common stock when the carrying value of the bonds is $27,000, the entry to record the conversion will include a debit to

March Company does not ring up sales tax separately on the cash register. Total receipts for February amounted to $16,120. If the sales tax rate is 4%, what amount must be remitted to the state for February's sales tax?

On January 1, 2015, Tiger Company, a calendar-year company, issued $200,000 of notes payable, of which $50,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2015 is

The interest expense recorded on an interest payment date is increased

From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that

Bonds that are secured by real estate are termed

The contractual rate of interest is usually stated as

If the market rate of interest is 10%, a $10,000, 12%, 10-year bond that pays interest semiannually would sell at an amount

Buying stock in a corporation is attractive to investors because

The amount of income earned per share of a company's common stock is known as

A corporation sold 14,000 shares of its $10 par value common stock at a cash price of $13 per share. The entry to record this transaction would include

A company issued 7% preferred stock with a $100 par value. This means that

Stock of a corporation that has only one class of stock is called

Preferred stock on which the right to receive dividends is forfeited for any year that the dividends are not declared is referred to as

A company has 40,000 shares of common stock outstanding. The stockholders' equity applicable to common shares is $470,000, and the par value per common share is $10. This implies the book value per shares is

A company issued 60 shares of $100 par value stock for $7,000 cash. The total amount of contributed capital in excess of par is

A company had a beginning balance in retained earnings of $43,000. It had net income of $6,000 and paid out cash dividends of $5,625 in the current period. The ending balance in retained earnings equals

A corporation's distribution of additional shares of its own stock to its stockholders without the receipts of any payment in return is called a

The following data were reported by a corporation: authorized shares 20,000, issued shares 15,000, treasury shares 3,000. The number of issued and outstanding shares is

A company has 1,000 shares of $50 par value, 4.5% cumulative and nonparticipating preferred stock and 10,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $1,000 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders in the second year before any dividend is paid to common stockholders is

The statement of cash flows

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

The statement of cash flows will not report the

The best measure of a company's ability to generate sufficient cash to continue as a going concern is net cash provided by

The order of presentation of activities on the statement of cash flows is

Financing activities involve

Investing activities include

Generally, the most important category on the statement of cash flows is cash flows from

If a company has both an inflow and outflow of cash related to plant assets, the

If accounts receivable have increased during the period,

Meyer Company reported net income of $30,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $5,000 was recorded. Net cash provided by operating activities for the year is

In calculating net cash provided by operating activities using the indirect method, an increase in supplies during a period is

In developing the cash flows from operating activities, most companies in the U.S.

Compound interest is the return on principal

The future value of 1 factor will always be

If the single amount of $5,000 is to be received in 3 years and discounted at 6%, its present value is

If $20,000 is deposited in a savings account at the end of each year and the account that pays interest of 5% compounded annually, what will be the balance of the account at the end of 10 years?

In present value calculations, the process of determining the present value is called

If you are able to earn an 8% rate of return, what amount would you need to invest to have $20,000 one year from now?

If the single amount of $2,500 to be received in 2 years is discounted at 11%, its present values is

Which of the following discount rates will produce the smallest present value?

Fryburg Company is considering purchasing equipment. The equipment will produce the following cash flows: Year 1 = $60,000, Year 2 = $100,000. Fryburg requires the minimum rate of return of 10%. What is the maximum price Fryburg should pay for this equipment?

Linda Erickson has been offered an investing opportunity which requires an immediate deposit of $91,925 and will earn 8% per year. At the end of the investment's life it will return $250,000 to Linda. How many years must Linda wait to receive the $250,000?

A $10,000, 8%, 5-year note payable that pays interest quarterly would be discounted back to its present value by using tables that would indicate which one of the following period-interest combinations?

Mike Arbow made a deposit into his savings account five years ago, and earned interest at a rate of 6%. The deposit accumulated to $27,500. How much was initially deposited assuming the interest was compounded annually?