Question Details

ACCT/257 ACCT257 ACCT 257 CHAP 05 MULTIPLE CHOICE QUESTIONS PART 4

MULTIPLE CHOICE QUESTIONS


113.	Elko Inc. collected $830 of fees in advance. The Company erroneously debited Cash for $380 and credited Accounts Receivable for $380. The correcting entry is
a.	Cash		380
	Accounts Receivable		450
		Unearned Revenue			830
b.	Cash		830
		Service Revenue			830
c.	Cash		450
	Accounts Receivable		380
		Unearned Revenue			830
d.	Cash		450
		Accounts Receivable			450

	114.	All of the following are property, plant, and equipment except
a.	supplies.
b.	machinery.
c.	land.
d.	buildings.

115.	The first item listed under current liabilities is usually
a.	accounts payable.
b.	notes payable.
c.	salaries payable.
d.	taxes payable.

116.	Office Equipment is classified in the balance sheet as
a.	a current asset.
b.	property, plant, and equipment.
c.	an intangible asset.
d.	a long-term investment.

117.	A current asset is
a.	the last asset purchased by a business.
b.	an asset which is currently being used to produce a product or service.
c.	usually found as a separate classification in the income statement.
d.	an asset that a company expects to convert to cash or use up within one year.

118.	An intangible asset
a.	does not have physical substance, yet often is very valuable.
b.	is worthless because it has no physical substance.
c.	is converted into a tangible asset during the operating cycle.
d.	cannot be classified on the balance sheet because it lacks physical substance.

119.	Liabilities are generally classified on a balance sheet as
a.	small liabilities and large liabilities.
b.	present liabilities and future liabilities.
c.	tangible liabilities and intangible liabilities.
d.	current liabilities and long-term liabilities.

120.	Which of the following would not be classified a long-term liability?
a.	Current maturities of long-term debt
b.	Bonds payable
c.	Mortgage payable
d.	Lease liabilities

121.	Which of the following liabilities are not related to the operating cycle?
a.	Wages payable
b.	Accounts payable
c.	Utilities payable
d.	Bonds payable

122.	Intangible assets include each of the following except
a.	copyrights.
b.	goodwill.
c.	land improvements.
d.	patents.

	123.	It is not true that current assets are assets that a company expects to
a.	realize in cash within one year.
b.	sell within one year.
c.	use up within one year.
d.	acquire within one year.

	124.	The operating cycle of a company is the average time that is required to go from cash to
a.	sales in producing revenues.
b.	cash in producing revenues.
c.	inventory in producing revenues.
d.	accounts receivable in producing revenues.

	125.	On a classified balance sheet, current assets are customarily listed
a.	in alphabetical order.
b.	with the largest dollar amounts first.
c.	in the order of liquidity.
d.	in the order of acquisition.

	126.	Intangible assets are
a.	listed under current assets on the balance sheet.
b.	not listed on the balance sheet because they do not have physical substance.
c.	noncurrent resources.
d.	listed as a long-term investment on the balance sheet.

	127.	The relationship between current assets and current liabilities is important in evaluating a company's
a.	profitability.
b.	liquidity.
c.	market value.
d.	accounting cycle.

	128.	The most important information needed to determine if companies can pay their current obligations is the
a.	net income for this year.
b.	projected net income for next year.
c.	relationship between current assets and current liabilities.
d.	relationship between short-term and long-term liabilities.

Use the following information for questions 129-137. 

The following items are taken from the financial statements of Cerner Company for the year ending December 31, 2008:
Accounts payable	$  18,000
Accounts receivable	11,000
Accumulated depreciation - equipment	28,000
Advertising expense	21,000
Cash	15,000
Retained Earnings (1/1/08)	80,000
Common Stock	22,000
Dividends	14,000
Depreciation expense	12,000
Insurance expense	3,000
Note payable, due 6/30/09	70,000
Prepaid insurance (12-month policy)	6,000
Rent expense	17,000
Salaries expense	32,000
Service revenue	133,000
Supplies	4,000
Supplies expense	6,000
Equipment	210,000

129.	What is the company- net income for the year ending December 31, 2008?
a.	$133,000
b.	$42,000
c.	$28,000
d.	$12,000

130.	What is the total that would be reported for stockholders' equity at December 31, 2008?
a.	$102,000
b.	$130,000
c.	$144,000
d.	$158,000

131.	What are total current assets at December 31, 2008?
a.	$26,000
b.	$32,000
c.	$36,000
d.	$218,000

132.	What is the book value of the equipment at December 31, 2008?
a.	$238,000
b.	$210,000
c.	$182,000
d.	$170,000