MBA 510 UPDATED COMPREHENSIVE EXAM
QUESTIONS AND ANSWERS SURE A+
✔✔Honoring a note receivable indicates that the maker has - ✔✔paid in full
✔✔sellers allow customers to use bank or third party credit cards for what reasons? -
✔✔avoid risk of customers not paying
speed up receipt of cash from credit sale
increases total sales
avoid having to decide who gets credit and how much
✔✔Tangible assets used in a company's operations that have useful life of more than
one accounting period - ✔✔plant assets
✔✔An estimate of an asset's value at the end of its useful life - ✔✔salvage value
✔✔The process of allocating the cost of a plant asset to expense while it is in use -
✔✔depreciation
✔✔A change in accounting estimate is reflected in: - ✔✔current and future statements,
NOT in prior statements
, ✔✔The Modified Accelerated Cost Recovery System (MACRS) is not acceptable for: -
✔✔not acceptable for financial reporting
✔✔Which of the following is NOT considered a plant asset: land, buildings, land
improvements, patents, machinery - ✔✔PATENTS are intangible and not plant assets
✔✔Capital expenditure is also known as - ✔✔balance sheet expenditure
✔✔amounts owed to suppliers for products or services purchased on credit -
✔✔accounts payable
✔✔Contingent liabilities are recorded or disclosed in the financial notes unless they are
- ✔✔remote (very unlikely)
✔✔Formula for interest expense - ✔✔interest = principal x rate x time
✔✔The employer should record payroll deductions as - ✔✔current liabilities
✔✔Amount of federal income taxes witheld depends on: - ✔✔income and nu,ber of
withholding allowances
✔✔Employer payroll taxes are an _____________________ beyond wages earned by
employees - ✔✔added expense
✔✔Employee vacation benefits are - ✔✔estimated liabilities
✔✔Warranty expenses and liability is recognized - ✔✔in the year of the sale
✔✔The right of common stockholders to purchase their proportional share of any
common stock later issued by a corporation is called the: - ✔✔preemptive right
✔✔The number of shares that a corporation's charter allows it to sell is referred to as -
✔✔authorized stock
✔✔the total amount of cash and other assets that a corporation receives from its
stockholders in exchange for its stock is referred to as - ✔✔paid-in capital
✔✔changes in retained earnings are commonly reported in the - ✔✔statement of
stockholder's equity
✔✔the date the directors vote to declare and pay a dividend - ✔✔date of declaration
QUESTIONS AND ANSWERS SURE A+
✔✔Honoring a note receivable indicates that the maker has - ✔✔paid in full
✔✔sellers allow customers to use bank or third party credit cards for what reasons? -
✔✔avoid risk of customers not paying
speed up receipt of cash from credit sale
increases total sales
avoid having to decide who gets credit and how much
✔✔Tangible assets used in a company's operations that have useful life of more than
one accounting period - ✔✔plant assets
✔✔An estimate of an asset's value at the end of its useful life - ✔✔salvage value
✔✔The process of allocating the cost of a plant asset to expense while it is in use -
✔✔depreciation
✔✔A change in accounting estimate is reflected in: - ✔✔current and future statements,
NOT in prior statements
, ✔✔The Modified Accelerated Cost Recovery System (MACRS) is not acceptable for: -
✔✔not acceptable for financial reporting
✔✔Which of the following is NOT considered a plant asset: land, buildings, land
improvements, patents, machinery - ✔✔PATENTS are intangible and not plant assets
✔✔Capital expenditure is also known as - ✔✔balance sheet expenditure
✔✔amounts owed to suppliers for products or services purchased on credit -
✔✔accounts payable
✔✔Contingent liabilities are recorded or disclosed in the financial notes unless they are
- ✔✔remote (very unlikely)
✔✔Formula for interest expense - ✔✔interest = principal x rate x time
✔✔The employer should record payroll deductions as - ✔✔current liabilities
✔✔Amount of federal income taxes witheld depends on: - ✔✔income and nu,ber of
withholding allowances
✔✔Employer payroll taxes are an _____________________ beyond wages earned by
employees - ✔✔added expense
✔✔Employee vacation benefits are - ✔✔estimated liabilities
✔✔Warranty expenses and liability is recognized - ✔✔in the year of the sale
✔✔The right of common stockholders to purchase their proportional share of any
common stock later issued by a corporation is called the: - ✔✔preemptive right
✔✔The number of shares that a corporation's charter allows it to sell is referred to as -
✔✔authorized stock
✔✔the total amount of cash and other assets that a corporation receives from its
stockholders in exchange for its stock is referred to as - ✔✔paid-in capital
✔✔changes in retained earnings are commonly reported in the - ✔✔statement of
stockholder's equity
✔✔the date the directors vote to declare and pay a dividend - ✔✔date of declaration
