Question

please I am having a lot of problems with the questions above .I am getting ready for the final this week.Can you please answer all of them .

Tab 07) How many of the following events would require an expense to be recorded? Ordering office supplies Hiring a receptionist Paying employces' salaries for the current month Receiving but not paying a current utility bill Paying for insurance in advance A) One D)Iwo. C) Three. B) Four 08) The balance sheet of ABC reports total assets of $1,500,000 and S1,700,000 at the beginning and of the year, respectively. Net income and sales for the year are $240,000 and $2,000,000 respectively. What is ABC's profit margin? A) 15%. D) 14.12%. C) 16%. B) I 2%. 09) Assuming a current ratio of 1.2 and an acid-test ratio of 0.80, how will the purchase of inventory with cash affect each ratio? A) No change to the current ratio and decrease the acid-test ratio. B) Decrease the current ratio and decrease the acid-test ratio. C) Increase the current ratio and incrase the acid-test ratio. D) Decrease the current ratio and increase the acid-test ratio. 100) If a company overstates its ending balance of inventory in year 1 and it records inventory correctly in year 2, which one of the following is truc? A) Net income is overstated in year 2. C) Cost of goods sold is overstated in year I B) Retained earnings is overstated in year l D) Net income is understated in year 1. 101) 2018 2017 S36,000 Accounts receivable $40,000 28,000 Inventory 35,000 190,000 Net sales 114,000 Cost of goods sold 108,000 Total assets 425,000 405,000 Total stockholders' equity 240,000 225,000 32.500 28,000 Net income The 2018 debt to equity ratio is (rounded to one decimal place): B) 40.0%. c) 77,1%. A) 80.0%. D) 60.0%. l6 le inventory system, the entry at the time of a sa 102) Sales revenue $440,000 60,000 Advertising expense Interest expense 10,000 55,000 Salaries expense 25,000 Utilities expense Income tax expense 45,000 Cost of goods sold 180,000 What is operating income? A) S120,000. B) S65.000. C) S110,000 D) S260,000. 103) In a perpetual inventory system, the entry at the time of a sale to record the cost of the inventory sold includes a A) Not recorded at the time of the sale C) Credit to Cost of Goods Sold. B) Debit to Cost of Goods Sold. D) Debit to Accounts Receivable 104) Goodwill is: A) Only recorded by the seller of a business. B) Recorded when created internally through advertising expense. C) Amortized over the greater of its estimated life or forty years D) The value of a business as a whole, over and above the value of its net identifiable 105) ABC purchased equipment for $60.000 on January 1, 2018. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years Using the straight-line method, the book value at December 31, 2018 would be: A) $44,000. B) $55,000. C) $49,000 D) S60,000 106) In doing an allocation for a basket purchase A) Use the individual costs and the total market value B) Use the individual costs and the individual market values C) Use the total cost and the total market value D) Use the total cost and the individual market values 107) Aggressive Accounting practices produce A) The Same Cash Flow from Operations as Conservative Accounting B) A Higher Cash Flow from Operations than Conservative Accounting C) A Lower Cash Flow from Operations than Conservative Accounting 108) Uncontrolled Liquidations (more tham ooc possible correcet answer) A) Increase Taxes for FIFO companies C) Increase Income for LIFO companies B) Increase Income for FIFO companies D) Increase Taxes for LIFO companies 17 137) In a periodic i mpany's total assets decreased while liabilities and common stock were unchanged, and no 117) If a co dividends were paid, then ) cash flow from operating activities was greater than cash flow from investing activities B) retained earnings were less than net income during the period. C) the company must have purchased assets with cash. D) revenues were less than expenses. 118) Assets S1,200,000 800,000 Liabilities S100,000 Net income Retained earnings $250,000 Stockholders' claims to the company's resources amount to: A) S1,200,000 B) S400,000. D) $800,000 119) Of the following inventories I1) Raw Materials Inventory, 2) Work in Process Inventory, 3) Finished Goods Inventory, how many would you find in a Sales Office? A) Three B) None C) One D) Two 120) The Direct Method and Indirect Method of Reporting Cash Flows A) apply only to Cash from Operations B) can apply to all parts of the cash flow statement 121) When a company sells land for cash and makes a $25,000 gain: A) Cannot determine from the given information. B) Its debt to equity ratio decreases. C) Its acid-test ratio decreases D) Its current ratio decreases 122) In which plan does an employer often match what an employee pays to a pension fund A) neither plan C) a Defined Contribution Pension Plan B) a Defined Benefit Pension Plan D) both plans 123) For a journal entry with only two lines, the following entry is valid Decrease in Revenue, Decrease in Expense. A) False B) True 124) Ifyou put S500 into a savings account that pays simple interest of 8 the money two years later, you will earn interest of $80. A) False % per year and then withdraw B) True 19 125) Ifa company has stockholders' equity of $60,000 at the end of the year, which of the following statements must be true? A) The company's assets exceed liabilities by $60,000 B) Total revenues during the year equal 560,000 C) Net income for the year equals $60,000. D) The company has issued S60,000 of common stock. 126) During the first two years, ABC drove he company truck 15,000 and 22,000 miles, respectively, to deliver merchandise to its customers. The company originally purchased the truck for $175,000. Itf the truck has an estimated life of 10 years or 300,000 miles, with an estimated residual value of s25.000, what amount of deprecation expense should ABC record in the second year using the activity-based method? A) S7,500. C) S18.500. D) $16.000. B) $11,000 127) Number of Units Unit Cost Date Transaction Apr Beginning inventory Apr. 20 Purchase 700 units of inventory were sold during the month. Ending inventory assuming FIFO would be: $2.40 500 400 2.50 A) S500. B) $490. C) S480. D) S470 128) Which of the following would increase the gross profit ratio? A) The cost of inventory increases. B) The company reduces operating expenses C) The sales price of a product increases by a higher percentage than does its cost of goods sold. D) The number of units sold increases. 129) Net credit sales S400,000 Net income- $100,000 Average total assets $80,000 Average accounts receivable $20,000 What is the average collection period (rounded to the nearest whole day)? A) 73 days. B) 9 days. C) 5 days. D) 18 days. 130) Assuming an acid-test ratio of 1.0, how will the purchase of inventory with cash affect the ratio? A) Increase the acid-test ratio. B) No change to the acid-test ratio. C) Decrease the acid-test ratio. D) Could either increase or decrease the acid-test ratio.

Answer 1

97. Answer- D). Two

Explanation-

Paying employees salary for the current month, and paying insurance in advance are the two transaction for which expense need to be recorded.

98.Answer- B). 12%

Explanation-

Netprofit margin= (Net profit÷ Net sales)*100

= ($240000÷$2000000)*100

= 12%

99.Answer- A).No change in the current ratio, decrease in acid- test ratio.

Explanation-

Current ratio = (CA÷CL)

Here , if cash used to purchase inventory then CA(current asset ) remains same. Only cash changes to inventory. Both are parts of current asset and therefore there is no change in current ratio.

Quick ratio = (CA- prepaid expenses+ inventory)÷ CL

Therefore, in 2nd case if cash changes into inventory then numerator reduces and and thus als decreases the ratio.

100. Answer- B). Retained earning is overstated in year1.

Explanation-

As ending inventory is overstated in year 1 and correct year 2, it implies income is overstated in year 1 and ultimately the retained earning of year1 is overstated.

101.Answer- C). 77.10%

Explanation-

Debt equity ratio=( Debt÷Equity)* 100

Debt= total asset minus stockholders equity

=425000- 240000

= $ 185000

Now, (Debt ÷ Equity )*100

=(185000÷240000)*100

= 77.10% approximately.

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