ACCT 504 Week 8, Final Exam 2
Week 8: Wk8 - Final Exam
1. (TCO A) An advantage of the corporate form of business is that (Points : 5)
it has limited life.
its owner’s personal resources are at stake.
its ownership is easily transferable via the sale of shares of stock.
it is simple to establish.
2. (TCO A) Which activities involve acquiring the resources to run the business?
(Points : 5)
Deliveri
ng
Financi
ng
Investin
g
Operati
ng
3.(TCO A) For 2007 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 2007 earnings per share? (Points : 5)
$4.66
$0.20
$66.67
$5.00
4. (TCO C) Free cash flow provides an indication of a company’s ability to (Points :
5)
generate cash to invest in new capital
expenditures. generate net income.
generate cash to pay dividends.
both a and c.
5. (TCO C) When a corporation distributes a
, dividend the (Points : 5) most common form of
distribution is a cash dividend. Dividends
account will be increased with a credit.
Retained Earnings account will be directly increased with
a debit. Dividends account will be decreased with a debit.
6.(TCO A, B) Cerner Company showed the following balances at the
end of its first year: Cash $5,000
Prepaid insurance500
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 on its trial balance?
(Points : 5)
$21,500
$21,000
$20,500
$22,000
(TCO B, E) Under the accrual basis of accounting (Points : 5)
7.
cash must be received before revenue is recognized.
net income is calculated by matching cash outflows against cash inflows.
events that change a company's financial statements are recognized in the
period they occur rather than in the period in which cash is paid or received.
the ledger accounts must be adjusted to reflect a cash basis of accounting
before financial statements are prepared under generally accepted accounting
principles.
8.(TCO A, B) The Village 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
$3,000 on hand. The adjusting entry that should be made by the company on June
30 is (Points : 5)
Debit Laundry Supplies Expense, $3,000; Credit Laundry
Supplies, $3,000. Debit Laundry Supplies Expense, $3,500;
Credit Laundry Supplies, $3,000. Debit Laundry Supplies,
Week 8: Wk8 - Final Exam
1. (TCO A) An advantage of the corporate form of business is that (Points : 5)
it has limited life.
its owner’s personal resources are at stake.
its ownership is easily transferable via the sale of shares of stock.
it is simple to establish.
2. (TCO A) Which activities involve acquiring the resources to run the business?
(Points : 5)
Deliveri
ng
Financi
ng
Investin
g
Operati
ng
3.(TCO A) For 2007 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 2007 earnings per share? (Points : 5)
$4.66
$0.20
$66.67
$5.00
4. (TCO C) Free cash flow provides an indication of a company’s ability to (Points :
5)
generate cash to invest in new capital
expenditures. generate net income.
generate cash to pay dividends.
both a and c.
5. (TCO C) When a corporation distributes a
, dividend the (Points : 5) most common form of
distribution is a cash dividend. Dividends
account will be increased with a credit.
Retained Earnings account will be directly increased with
a debit. Dividends account will be decreased with a debit.
6.(TCO A, B) Cerner Company showed the following balances at the
end of its first year: Cash $5,000
Prepaid insurance500
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 on its trial balance?
(Points : 5)
$21,500
$21,000
$20,500
$22,000
(TCO B, E) Under the accrual basis of accounting (Points : 5)
7.
cash must be received before revenue is recognized.
net income is calculated by matching cash outflows against cash inflows.
events that change a company's financial statements are recognized in the
period they occur rather than in the period in which cash is paid or received.
the ledger accounts must be adjusted to reflect a cash basis of accounting
before financial statements are prepared under generally accepted accounting
principles.
8.(TCO A, B) The Village 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
$3,000 on hand. The adjusting entry that should be made by the company on June
30 is (Points : 5)
Debit Laundry Supplies Expense, $3,000; Credit Laundry
Supplies, $3,000. Debit Laundry Supplies Expense, $3,500;
Credit Laundry Supplies, $3,000. Debit Laundry Supplies,
