ACC 281 FINAL EXAM
PART I — MULTIPLE CHOICE (90 points)
Instructions
Designate the best answer for each of the following questions.
Questions 1 and 2 are based on the following information:
Bono Company recently incurred the following costs:
AND SO ON
1. The building should be recorded on Bono's books at
2. Land should be recorded on Bono's books at
3. Carson Supply bought equipment at a cost of $72,000 on January 2, 2005. It originally had an estimated life of ten years and a salvage value of $12,000. Carson uses the straight-line depreciation method. On December 31, 2008, Carson decided the useful life likely would end on December 31, 2012, with a salvage value of $6,000. The depreciation expense recorded on December 31, 2008, should be
4. In order to be relevant, accounting information must
5. Riodan Company sold old equipment for $35,000. The equipment had a cost of $70,000 and accumulated depreciation of $42,000. The entry to record the sale of the equipment would include a
6. The cost of intangible assets should be
7. In a period of rising prices, the inventory method that results in the lowest income tax payment is
8. On November 30, Thatcher Company issued a $6,000, 6%, 4-month note to the National Bank. The entry on Thatcher's books to record the payment of the note at maturity will include a credit to Cash for
9. The inventory methods that result in the most current costs in the income statement and balance sheet are
10. The following information is available for Lighten Company:
11. If ending inventory is understated, net income and assets will be
12. One of the two constraints in accounting is
13. The assumption that assumes a company will continue in operation long enough to carry out its existing objectives is the
14. All of the following are intangible assets except
15. A daily cash count of register receipts made by a cashier department supervisor demonstrates an application of which of the following internal control principles?
16. When the allowance method is used for bad debts, the entry to write off an individual account known to be uncollectible involves a
17. Shipping terms of FOB destination mean that the
18. Bates Company has a $300,000 balance in Accounts Receivable and a $2,000 debit balance in Allowance for Doubtful Accounts. Credit sales for the period totaled $1,800,000. What is the amount of the bad debt adjusting entry if Bates uses a percentage of receivables basis (at 10%)?
19. The constraint of conservatism is best expressed as
20. If merchandise is sold for $2,000 subject to credit terms of 2/10, n/30, the entry to record collection in full within the discount period would include a
21. Barker Company's records show the following for the month of January:
22. Jetson Company's financial information is presented below.
23. The necessity of making adjusting entries relates mostly to the
24. The preparation of closing entries
25. Allowance for Doubtful Accounts is reported in the
26. Current liabilities are obligations that are reasonably expected to be paid from
27. Which of the following errors will cause a trial balance to be out of balance? The entry to record a payment on account was
28. The primary accounting standard-setting body in the United States is the
29. Lawford Company's equipment account increased $600,000 during the period; the related accumulated depreciation increased $45,000. New equipment was purchased at a cost of $1,050,000 and used equipment was sold at a loss of $30,000. Depreciation expense was $150,000. Proceeds from the sale of the used equipment were
30. Which of the following would not be included in the operating activities section of a statement of cash flows?
31. Which of the following combinations presents correct examples of liquidity, profitability, and solvency ratios, respectively?
32. Nadine Manufacturing declared a 10% stock dividend when it had 200,000 shares of $5 par value common stock outstanding. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to
33. Which of the following pairs of terms in the area of financial statement analysis are synonymous?
34. Which of the following statements is true?
35. Dividends received are credited to what account under the equity method and cost method, respectively?
36. In accounting for available-for-sale securities, the Unrealized Loss—Equity account should be classified as a
37. Carr Corporation has the following stock outstanding:
38. The statement of cash flows is a(n)
39. The directors of Chandler Corp. are trying to decide whether they should issue par or no par stock. They are considering two alternatives for their new stock, which they are assuming will be issued at $8 per share. The alternatives are: (A) $5 par value and (B) no par, no stated value. If 100,000 shares are issued, what amount will be credited to the common stock account in each of these cases?
40. Fison Corp. purchased 20,000 shares of its $2 par common stock at a cost of $13 per share on April 30, 2008. The stock was originally issued at $11 per share. The entry to record the purchase of the stock should include a debit to
41. What is the effect on total paid-in capital of a stock dividend and a stock split, respectively?
Stock Dividend Stock Split
42. Which of the following should be classified as an extraordinary item?
43. A Discount on Bonds Payable account
44. In order to be considered extraordinary, an item must be
45. If the market rate of interest is lower than the stated rate, bonds will sell at an amount
PART II — MATCHING (50 points)
Instructions
Designate the terminology that best represents the definition or statement given below by placing the identifying letter(s) in the space provided. No letter should be used more than once.
1. The periodic write-off of an intangible asset.
2. The total amount subject to depreciation.
3. The principle that efforts be matched with accomplishments.
4. An expenditure charged against revenues as an expense when incurred.
5. The inventory costing method that assumes that the costs of the earliest goods purchased are the first to be recognized as cost of goods sold.
6. Use of the same accounting principles and methods from period to period by the same business enterprise.
Consistency
7. A measure of solvency calculated as cash provided by operating activities divided by average total liabilities.
8. An inventory costing method that assumes that the latest units purchased are the first to be allocated to cost of goods sold.
9. An assumption that economic events can be identified with a particular unit of accountability.
10. A characteristic of information that means it is capable of making a difference in a decision.
11. An assumption that the economic life of a business can be divided into artificial time periods.
12. This method of accounting for uncollectible accounts is required when bad debts are significant in size.
13. An accounting method in which cash dividends received are credited to Dividend Revenue.
14. Used by a bank when a previously deposited customer’s check “bounces” because of insufficient funds.
15. The assumption that the enterprise will continue in operation long enough to carry out its existing objectives and commitments.
16. A system in which detailed records are not maintained and cost of goods sold is determined only at the end of an accounting period.
17. The difference between inventory reported using LIFO and inventory reported using FIFO.
18. The methods and measures adopted within a business to safeguard its assets and enhance the accuracy and reliability of its accounting records.
19. Revenue, expense, and dividends accounts whose balances are transferred to retained earnings at the end of an accounting period.
20. A technique for evaluating financial statements that expresses the relationship among selected financial statement data.
21. A depreciation method that applies a constant rate to the declining balance book value of the asset and produces a decreasing annual depreciation expense over the useful life of the asset.
22. A pro rata distribution of a corporation’s own stock to its stockholders.
23. Events and transactions that are unusual in nature and infrequent in occurrence.
24. The disposal of a significant segment of a business.
25. The net income earned by each share of outstanding common stock.
PART III — INVENTORY (5 points)
Elston Company had a beginning inventory of 200 units at a cost of $12 per unit on August 1. During the month, the following purchases and sales were made.
Purchases Sales
August 4 250 units at $13 August 7 150 units
August 15 350 units at $15 August 11 100 units
August 28 200 units at $14 August 17 250 units
August 24 200 units
Elston uses a periodic inventory system.
Instructions
Determine ending inventory and cost of goods sold under (a) average cost, (b) FIFO, and (c) LIFO.
PART IV — DEPRECIATION (5 points)
Thomas Company purchased equipment for $640,000 cash on January 1, 2007. The estimated life is 5 years or 1,000,000 units; salvage value is estimated at $40,000. Actual activity was 180,000 units in 2007, and 200,000 units in 2008.
Instructions: Compute the annual depreciation expense for 2007 and 2008, and book value at December 31, 2008, under the following depreciation methods: (a) units-of-activity, (b) straight-line, and (c) double-declining-balance.
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Showing posts with label Final Exam. Show all posts
Showing posts with label Final Exam. Show all posts
Thursday, November 26, 2015
Friday, October 9, 2015
ACC 290 Final Exam
ACC 290 FINAL EXAM
MULTIPLE CHOICE
1) Which financial statement is used to determine cash generated from operations?
2) In terms of sequence, in what order must the four basic financial statements be prepared?
3) In classifying transactions, which of the following is true in regard to assets?
4) An increase in an expense account must be
5) ABC Corporation issues 100 shares of $1 par common stock at $5 per share, which of the following is the correct journal entry?
6) In the first month of operations, the total of the debit entries to the cash account amounted to $1,400 and the total of the credit entries to the cash account amounted to $600. The cash account has a
7) Which ledger contains control accounts?
8) Smith is a customer of ABC Corporation. Smith typically purchases merchandise from ABC on account. Which ledger would ABC use to keep track of the details of Smith’s account?
9) Under the cash basis of accounting,
10) Under the accrual basis of accounting,
11) The Vintage 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 $2,000 on hand. The adjusting entry that should be made by the company on June 30 is
12) Greese Company purchased office supplies costing $4,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,100 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be
13) An adjusted trial balance
14) Given the following adjusted trial balance:
Net income for the year is
15) Given the following adjusted trial balance, what will be the totals for the debit and credit columns of the post-closing trial balance?
16) 3.2.1 Given the following adjusted trial balance:
After closing entries have been posted, the balance in retained earnings will be
17) Net income is recorded on the work sheet under the
18) At the beginning of the year, Uptown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,500,000. If Uptown Athletic reported ending inventory of $600,000 and sales of $2,000,000, their cost of goods sold and gross profit rate would be
19) During the year, Sarah’s Pet Shop’s merchandise inventory decreased by $30,000. If the company’s cost of goods sold for the year was $450,000, purchases would have been
20) At the beginning of the year, Wildcat Athletic had an inventory of $200,000. During the year, the company purchased goods costing $700,000. If Wildcat Athletic reported ending inventory of $300,000 and sales of $1,000,000, their cost of goods sold and gross profit rate would be
21) The entry to record of sale of $900 with terms of 2/10, n/30 will include a
22) Dobler Company uses a periodic inventory system. Details for the inventory account for the month of January 2012 are as follows:
Units Per unit price Total
Balance, 1/1/2012 200 $5.00 $1,000
Purchase, 1/15/2012 100 5.30 530
Purchase, 1/28/2012 100 5.50 550
An end of the month (1/31/2012), inventory showed that 140 units were on hand. If the company uses LIFO, what is the value of the ending inventory?
23) The difference between ending inventory using LIFO and ending inventory using FIFO is
24) A consistent application of an inventory costing method enhances
25) The accountant at Patton Company has determined that income before income taxes amounted to $11,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $300 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption?
26) A very small company would have the most difficulty in implementing which of the following internal control activities?
27) A system of internal control
28) The custodian of a company asset should
29) The Sarbanes Oxley Act (2002) applies to
Click here for the solution: What is the role of the Sarbanes-Oxley Act of 2002 in relation to the types of internal controls used by corporations
MULTIPLE CHOICE
1) Which financial statement is used to determine cash generated from operations?
2) In terms of sequence, in what order must the four basic financial statements be prepared?
3) In classifying transactions, which of the following is true in regard to assets?
4) An increase in an expense account must be
5) ABC Corporation issues 100 shares of $1 par common stock at $5 per share, which of the following is the correct journal entry?
6) In the first month of operations, the total of the debit entries to the cash account amounted to $1,400 and the total of the credit entries to the cash account amounted to $600. The cash account has a
7) Which ledger contains control accounts?
8) Smith is a customer of ABC Corporation. Smith typically purchases merchandise from ABC on account. Which ledger would ABC use to keep track of the details of Smith’s account?
9) Under the cash basis of accounting,
10) Under the accrual basis of accounting,
11) The Vintage 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 $2,000 on hand. The adjusting entry that should be made by the company on June 30 is
12) Greese Company purchased office supplies costing $4,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,100 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be
13) An adjusted trial balance
14) Given the following adjusted trial balance:
Net income for the year is
15) Given the following adjusted trial balance, what will be the totals for the debit and credit columns of the post-closing trial balance?
16) 3.2.1 Given the following adjusted trial balance:
After closing entries have been posted, the balance in retained earnings will be
17) Net income is recorded on the work sheet under the
18) At the beginning of the year, Uptown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,500,000. If Uptown Athletic reported ending inventory of $600,000 and sales of $2,000,000, their cost of goods sold and gross profit rate would be
19) During the year, Sarah’s Pet Shop’s merchandise inventory decreased by $30,000. If the company’s cost of goods sold for the year was $450,000, purchases would have been
20) At the beginning of the year, Wildcat Athletic had an inventory of $200,000. During the year, the company purchased goods costing $700,000. If Wildcat Athletic reported ending inventory of $300,000 and sales of $1,000,000, their cost of goods sold and gross profit rate would be
21) The entry to record of sale of $900 with terms of 2/10, n/30 will include a
22) Dobler Company uses a periodic inventory system. Details for the inventory account for the month of January 2012 are as follows:
Units Per unit price Total
Balance, 1/1/2012 200 $5.00 $1,000
Purchase, 1/15/2012 100 5.30 530
Purchase, 1/28/2012 100 5.50 550
An end of the month (1/31/2012), inventory showed that 140 units were on hand. If the company uses LIFO, what is the value of the ending inventory?
23) The difference between ending inventory using LIFO and ending inventory using FIFO is
24) A consistent application of an inventory costing method enhances
25) The accountant at Patton Company has determined that income before income taxes amounted to $11,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $300 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption?
26) A very small company would have the most difficulty in implementing which of the following internal control activities?
27) A system of internal control
28) The custodian of a company asset should
29) The Sarbanes Oxley Act (2002) applies to
Click here for the solution: What is the role of the Sarbanes-Oxley Act of 2002 in relation to the types of internal controls used by corporations
Sunday, September 20, 2015
ACC 490 Final Exam
ACC 490 Final Exam
1. Most audit work in a financial statement audit consists of obtaining and evaluating evidence about
2. The existence of audit risk is recognized by the statement in the auditor's standard report that the
3. Analytical procedures enable the internal auditor to predict the balance or quantity of an item. Information to develop this estimate can be obtained by all of the following except
4. Analytical Procedures can be best categorized as
5. The risk that an auditor's procedures will lead to the conclusion that a material misstatement does not exist in an account balance when, in fact, such misstatement does exist is
6. Inherent risk and control risk differ from detection risk in that they
7. The acceptable level of detection risk is inversely related to the
8. As the acceptable level of detection risk decreases, an auditor may
9. Holding other planning considerations equal, a decrease in the amount of misstatements in a class of transactions that an auditor could tolerate most likely would cause the auditor to
10. Which of the following would an auditor most likely use in determining the auditor's preliminary judgment about materiality?
11. Which of the following is a false statement about materiality?
12. The objective of tests of details of transactions performed as substantive tests is to
13. In testing the existence assertion for an asset, an auditor ordinarily works from the
14. An auditor observes the mailing of monthly statements to a client's customers and reviews evidence of follow-up on errors reported by the customers. This test of controls most likely is performed to support management's financial statement assertion(s) of
15. Which of the following statements reflects an auditor's responsibility for detecting errors and fraud?
16. Which of the following circumstances most likely would cause an auditor to consider whether material misstatements exist in an entity's financial statements?
17. The established scope of the engagement should be sufficient to satisfy the objectives of the engagement. When developing the objectives of the engagement, the internal auditor should consider the
18. Which of the following is the best explanation of the difference, if any, between engagement objectives and procedures?
19. In planning an engagement, the internal auditor should establish objectives and procedures to address the risk associated with the activity. Risk is defined as
20. Writing an engagement work program occurs at which stage of the engagement?
Click here for the solution: ACC 490 Final Exam
1. Most audit work in a financial statement audit consists of obtaining and evaluating evidence about
2. The existence of audit risk is recognized by the statement in the auditor's standard report that the
3. Analytical procedures enable the internal auditor to predict the balance or quantity of an item. Information to develop this estimate can be obtained by all of the following except
4. Analytical Procedures can be best categorized as
5. The risk that an auditor's procedures will lead to the conclusion that a material misstatement does not exist in an account balance when, in fact, such misstatement does exist is
6. Inherent risk and control risk differ from detection risk in that they
7. The acceptable level of detection risk is inversely related to the
8. As the acceptable level of detection risk decreases, an auditor may
9. Holding other planning considerations equal, a decrease in the amount of misstatements in a class of transactions that an auditor could tolerate most likely would cause the auditor to
10. Which of the following would an auditor most likely use in determining the auditor's preliminary judgment about materiality?
11. Which of the following is a false statement about materiality?
12. The objective of tests of details of transactions performed as substantive tests is to
13. In testing the existence assertion for an asset, an auditor ordinarily works from the
14. An auditor observes the mailing of monthly statements to a client's customers and reviews evidence of follow-up on errors reported by the customers. This test of controls most likely is performed to support management's financial statement assertion(s) of
15. Which of the following statements reflects an auditor's responsibility for detecting errors and fraud?
16. Which of the following circumstances most likely would cause an auditor to consider whether material misstatements exist in an entity's financial statements?
17. The established scope of the engagement should be sufficient to satisfy the objectives of the engagement. When developing the objectives of the engagement, the internal auditor should consider the
18. Which of the following is the best explanation of the difference, if any, between engagement objectives and procedures?
19. In planning an engagement, the internal auditor should establish objectives and procedures to address the risk associated with the activity. Risk is defined as
20. Writing an engagement work program occurs at which stage of the engagement?
Click here for the solution: ACC 490 Final Exam
Friday, September 18, 2015
ACC 291 Final Exam
ACC 291 Final Exam
MULTIPLE CHOICE
1) Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $300,000 and credit sales are $1,200,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense?
2) Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $15,000. If the balance of the Allowance for Doubtful Accounts is $3,000 credit before adjustment, what is the amount of bad debts expense for that period?
3) Intangible assets
4) Intangible assets are the rights and privileges that result from ownership of long-lived assets that
5) The book value of an asset is equal to the
6) Gains on an exchange of plant assets that has commercial substance are
7) Ordinary repairs are expenditures to maintain the operating efficiency of a plant asset and are referred to as
8) Costs incurred to increase the operating efficiency or useful life of a plant asset are referred to as
9) When an interest-bearing note matures, the balance in the Notes Payable account is
10) The interest charged on a $200,000 note payable, at a rate of 6%, on a 2-month note would be
11) If a corporation issued $3,000,000 in bonds which pay 10% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%?
12) Hilton Company issued a four-year interest-bearing note payable for $300,000 on January 1, 2011. Each January the company is required to pay $75,000 on the note. How will this note be reported on the December 31, 2012 balance sheet?
13) A corporation issued $600,000, 10%, 5-year bonds on January 1, 2011 for 648,666, which reflects an effective-interest rate of 8%. Interest is paid semiannually on January 1 and July 1. If the corporation uses the effective-interest method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1, 2011, is
14) When the effective-interest method of bond discount amortization is used
15) If a corporation has only one class of stock, it is referred to as
16) Capital stock to which the charter has assigned a value per share is called
17) ABC, Inc. has 1,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2011. What is the annual dividend on the preferred stock?
18) Manner, Inc. has 5,000 shares of 5%, $100 par value, noncumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2011. There were no dividends declared in 2010. The board of directors declares and pays a $45,000 dividend in 2011. What is the amount of dividends received by the common stockholders in 2011?
19) When the selling price of treasury stock is greater than its cost, the company credits the difference to
20) The purchase of treasury stock
21) Marsh Company has other operating expenses of $240,000. There has been an increase in prepaid expenses of $16,000 during the year, and accrued liabilities are $24,000 lower than in the prior period. Using the direct method of reporting cash flows from operating activities, what were Marsh's cash payments for operating expenses?
22) Where would the event purchased land for cash appear, if at all, on the indirect statement of cash flows?
23) In performing a vertical analysis, the base for cost of goods sold is
24) Blanco, Inc. has the following income statement (in millions):
BLANCO, INC.
Income Statement
For the Year Ended December 31, 2011
Net Sales .............................. $200
Cost of Goods Sold .............................. 120
Gross Profit .............................. 80
Operating Expenses .............................. 44
Net Income .............................. $ 36
Using vertical analysis, what percentage is assigned to Net Income?
25) Dawson Company issued 500 shares of no-par common stock for $4,500. Which of the following journal entries would be made if the stock has a stated value of $2 per share?
26) Andrews, Inc. paid $45,000 to buy back 9,000 shares of its $1 par value common stock. This stock was sold later at a selling price of $6 per share. The entry to record the sale includes a
27) Which of the following is a fundamental factor in having an effective, ethical corporate culture?
28) Two individuals at a retail store work the same cash register. You evaluate this situation as
29) The Sarbanes-Oxley Act imposed which new penalty for executives?
30) The Sarbanes-Oxley Act requires that all publicly traded companies maintain a system of internal controls. Internal controls can be defined as a plan to
Click here for the solution: ACC 291 Final Exam
MULTIPLE CHOICE
1) Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $300,000 and credit sales are $1,200,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense?
2) Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $15,000. If the balance of the Allowance for Doubtful Accounts is $3,000 credit before adjustment, what is the amount of bad debts expense for that period?
3) Intangible assets
4) Intangible assets are the rights and privileges that result from ownership of long-lived assets that
5) The book value of an asset is equal to the
6) Gains on an exchange of plant assets that has commercial substance are
7) Ordinary repairs are expenditures to maintain the operating efficiency of a plant asset and are referred to as
8) Costs incurred to increase the operating efficiency or useful life of a plant asset are referred to as
9) When an interest-bearing note matures, the balance in the Notes Payable account is
10) The interest charged on a $200,000 note payable, at a rate of 6%, on a 2-month note would be
11) If a corporation issued $3,000,000 in bonds which pay 10% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%?
12) Hilton Company issued a four-year interest-bearing note payable for $300,000 on January 1, 2011. Each January the company is required to pay $75,000 on the note. How will this note be reported on the December 31, 2012 balance sheet?
13) A corporation issued $600,000, 10%, 5-year bonds on January 1, 2011 for 648,666, which reflects an effective-interest rate of 8%. Interest is paid semiannually on January 1 and July 1. If the corporation uses the effective-interest method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1, 2011, is
14) When the effective-interest method of bond discount amortization is used
15) If a corporation has only one class of stock, it is referred to as
16) Capital stock to which the charter has assigned a value per share is called
17) ABC, Inc. has 1,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2011. What is the annual dividend on the preferred stock?
18) Manner, Inc. has 5,000 shares of 5%, $100 par value, noncumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2011. There were no dividends declared in 2010. The board of directors declares and pays a $45,000 dividend in 2011. What is the amount of dividends received by the common stockholders in 2011?
19) When the selling price of treasury stock is greater than its cost, the company credits the difference to
20) The purchase of treasury stock
21) Marsh Company has other operating expenses of $240,000. There has been an increase in prepaid expenses of $16,000 during the year, and accrued liabilities are $24,000 lower than in the prior period. Using the direct method of reporting cash flows from operating activities, what were Marsh's cash payments for operating expenses?
22) Where would the event purchased land for cash appear, if at all, on the indirect statement of cash flows?
23) In performing a vertical analysis, the base for cost of goods sold is
24) Blanco, Inc. has the following income statement (in millions):
BLANCO, INC.
Income Statement
For the Year Ended December 31, 2011
Net Sales .............................. $200
Cost of Goods Sold .............................. 120
Gross Profit .............................. 80
Operating Expenses .............................. 44
Net Income .............................. $ 36
Using vertical analysis, what percentage is assigned to Net Income?
25) Dawson Company issued 500 shares of no-par common stock for $4,500. Which of the following journal entries would be made if the stock has a stated value of $2 per share?
26) Andrews, Inc. paid $45,000 to buy back 9,000 shares of its $1 par value common stock. This stock was sold later at a selling price of $6 per share. The entry to record the sale includes a
27) Which of the following is a fundamental factor in having an effective, ethical corporate culture?
28) Two individuals at a retail store work the same cash register. You evaluate this situation as
29) The Sarbanes-Oxley Act imposed which new penalty for executives?
30) The Sarbanes-Oxley Act requires that all publicly traded companies maintain a system of internal controls. Internal controls can be defined as a plan to
Click here for the solution: ACC 291 Final Exam
Thursday, August 13, 2015
FIN 571 Final Exam
1) Which of the following statements is true?
2) Book value, or net book value, refers to
3) Assume that the par value of a bond is $1,000. Consider a bond where the coupon rate is 9% and the current yield is 10%. Which of the following statements is true?
4) If the yield to maturity for a bond is less than the bond's coupon rate, the market value of the bond is __________.
5) For investors, the proper measure of a stock's risk is its __________.
6) A company’s beta is -1.5. If the overall stock market decreases by 5%, what is the expected change in the firm's stock price?
7) Which of these investments would you expect to have the highest rate of return for the next 20 years?
8) Dimensions of risk include __________.
9) One problem with using negative values for the proportion invested in the riskless asset to represent a borrowed amount is that the implied borrowing rate of interest is the same as the __________.
10) If you were willing to bet that the overall stock market was heading up on a sustained basis, it would be logical to invest in
11) Stony Products has an inventory conversion period (ICP) of about 70 days. The receivables collection period (RCP) is 30 days. The payables deferral period (PDP) is about 40 days. What is Stony's cash conversion cycle (CCC)?
12) The main source of short-term operating capital is _________.
13) An investor’s risky portfolio is made up of individual stocks. Which of the following statements about this portfolio is true?
14) An all-equity-financed firm would __________.
15) If a firm wants to lower its weighted average cost of capital (WACC), one way to do so would be to
16) Boeing® is a world leader in commercial aircraft. In the face of competition, Boeing® often faces a critical __________ decision: whether to develop a new generation of passenger aircraft.
17) Ideas for capital budgeting projects come from all levels within an organization. The bottom-up process results in ideas moving __________ through the organization.
18) Which of the following statements is true?
19) In practice, the __________ rule is the preferred criteria to accept or reject a capital investment project.
20) The Jerome Inc. western regional branch has been looking to install a new distribution center. The analysts have run the numbers on the distribution center costs and annual inflow from the investment. The project will cost $5 million at the beginning of the first year. The project will generate $1 million in earnings before interest and taxes at the end of each year. Jerome is in the 35% tax bracket and annual depreciation equates to $500,000 per year. The distribution center’s end of the fifth year’s salvage equals its book value, or $2,500,000. Compute the project’s NPV, assuming Jerome's WACC equals 12%.
21) The __________ method breaks down when evaluating projects in which the sign of the cash flow changes.
22) Studies show systematic differences in capital structures across industries. These are due primarily to differences in __________.
23) Capital structure decisions refer to the
24) Which of the following statements concerning preferred stock is true?
25) Mortgage bonds are __________.
26) __________ says to calculate the net advantage of leasing based on the incremental after-tax benefits that leasing will provide.
27) From the lessee’s viewpoint, the relevant discount rate for evaluating a lease versus buy decision is the __________.
28) The wholesale price for Captain John’s is $0.612 per loaf, and the variable cost of production is $0.387 per loaf. Captain John’s expects that expansion will allow them to sell an additional 4.5 million loaves in the next 5 years. What additional revenues minus expenses will be generated from expansion?
29) Which of the following statements is true?
30) In efficient markets, as in the United States, market prices are not expected to be __________.
Click here for the solution: FIN 571 Final Exam
2) Book value, or net book value, refers to
3) Assume that the par value of a bond is $1,000. Consider a bond where the coupon rate is 9% and the current yield is 10%. Which of the following statements is true?
4) If the yield to maturity for a bond is less than the bond's coupon rate, the market value of the bond is __________.
5) For investors, the proper measure of a stock's risk is its __________.
6) A company’s beta is -1.5. If the overall stock market decreases by 5%, what is the expected change in the firm's stock price?
7) Which of these investments would you expect to have the highest rate of return for the next 20 years?
8) Dimensions of risk include __________.
9) One problem with using negative values for the proportion invested in the riskless asset to represent a borrowed amount is that the implied borrowing rate of interest is the same as the __________.
10) If you were willing to bet that the overall stock market was heading up on a sustained basis, it would be logical to invest in
11) Stony Products has an inventory conversion period (ICP) of about 70 days. The receivables collection period (RCP) is 30 days. The payables deferral period (PDP) is about 40 days. What is Stony's cash conversion cycle (CCC)?
12) The main source of short-term operating capital is _________.
13) An investor’s risky portfolio is made up of individual stocks. Which of the following statements about this portfolio is true?
14) An all-equity-financed firm would __________.
15) If a firm wants to lower its weighted average cost of capital (WACC), one way to do so would be to
16) Boeing® is a world leader in commercial aircraft. In the face of competition, Boeing® often faces a critical __________ decision: whether to develop a new generation of passenger aircraft.
17) Ideas for capital budgeting projects come from all levels within an organization. The bottom-up process results in ideas moving __________ through the organization.
18) Which of the following statements is true?
19) In practice, the __________ rule is the preferred criteria to accept or reject a capital investment project.
20) The Jerome Inc. western regional branch has been looking to install a new distribution center. The analysts have run the numbers on the distribution center costs and annual inflow from the investment. The project will cost $5 million at the beginning of the first year. The project will generate $1 million in earnings before interest and taxes at the end of each year. Jerome is in the 35% tax bracket and annual depreciation equates to $500,000 per year. The distribution center’s end of the fifth year’s salvage equals its book value, or $2,500,000. Compute the project’s NPV, assuming Jerome's WACC equals 12%.
21) The __________ method breaks down when evaluating projects in which the sign of the cash flow changes.
22) Studies show systematic differences in capital structures across industries. These are due primarily to differences in __________.
23) Capital structure decisions refer to the
24) Which of the following statements concerning preferred stock is true?
25) Mortgage bonds are __________.
26) __________ says to calculate the net advantage of leasing based on the incremental after-tax benefits that leasing will provide.
27) From the lessee’s viewpoint, the relevant discount rate for evaluating a lease versus buy decision is the __________.
28) The wholesale price for Captain John’s is $0.612 per loaf, and the variable cost of production is $0.387 per loaf. Captain John’s expects that expansion will allow them to sell an additional 4.5 million loaves in the next 5 years. What additional revenues minus expenses will be generated from expansion?
29) Which of the following statements is true?
30) In efficient markets, as in the United States, market prices are not expected to be __________.
Click here for the solution: FIN 571 Final Exam
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