Strayer ACC556 Week 11 Final Exam Part 1 & Part 2 Latest 2016 Jan.

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Strayer ACC556 Week
11 Final Exam Part 1 Latest 2016 Jan.



• Question
1


2 out of 2 points



Vertical
analysis is a technique for evaluating a series of financial statement data
over a period of time to determine the increase (decrease) that has taken
place.




• Question
2


2 out of 2 points



Accountants
do not attempt to measure the change in a plant asset’s market value during
ownership because




• Question
3


2 out of 2 points



Which
of the following is not properly classified as property, plant, and equipment?




• Question
4


2 out of 2 points



The
current cash debt coverage ratio is considered a better representative of
liquidity than the current ratio because it involves the entire year rather
than a balance at one point in time.




• Question
5


2 out of 2 points



The
master budget reflects management’s long-term plans encompassing five years or
more.




• Question
6


2 out of 2 points



A
master budget is most useful in evaluating a manager’s performance in
controlling costs.




• Question
7


2 out of 2 points



A
primary objective of the statement of cash flows is to show the income or loss
on investing and financing transactions.




• Question
8


2 out of 2 points



Cash
dividends are not a liability of the corporation until they are declared by the
board of directors.




• Question
9


2 out of 2 points



Budget
reports provide the feedback needed by management to see whether actual
operations are on course.




• Question
10


2 out of 2 points



Intangible
assets are rights, privileges, and competitive advantages that result from
ownership of long-lived assets without physical substance.




• Question
11


2 out of 2 points



On
January 1, 2014, Ermler Company, a calendar-year company, issued $1,000,000 of
notes payable, of which $250,000 is due on January 1 for each of the next four
years. The proper balance sheet presentation on December 31, 2014, is




• Question
12


2 out of 2 points



The
book value of a plant asset is the difference between the




• Question
13


2 out of 2 points



All of
the following are true regarding financial statement analysis ratios associated
with liabilities except




• Question
14


2 out of 2 points



A
company whose current liabilities exceed its current assets may have a
liquidity problem.




• Question
15


2 out of 2 points



The
debt to assets ratio measures the percentage of the total assets provided by
creditors.




• Question
16


2 out of 2 points



A
current liability is a debt that can reasonably be expected to be paid




• Question
17


2 out of 2 points



Under
the corporate form of business organization




• Question
18


2 out of 2 points



One
objective of the income statement is to separate the results of continuing
operations from those of discontinued operations.




• Question
19


2 out of 2 points



Bonds
with a face value of $400,000 and a quoted price of 104¼ have a selling price
of




• Question
20


2 out of 2 points



During
2014, Phelps Corporation reported net sales of $3,000,000, net income of
$1,320,000, and depreciation expense of $80,000. Phelps also reported beginning
total assets of $1,000,000, ending total assets of $1,500,000, plant assets of
$800,000, and accumulated depreciation of $500,000. Phelps’s asset turnover
ratio is




• Question
21


2 out of 2 points



The
market rate of interest is often called the




• Question
22


2 out of 2 points



A
budget can be used as a basis for evaluating performance.




• Question
23


2 out of 2 points



On
January 1, a machine with a useful life of five years and a residual value of
$15,000 was purchased for $75,000. What is the depreciation expense for year 2
under straight-line depreciation?




• Question
24


2 out of 2 points



A
corporation is not an entity that is separate and distinct from its owners.




• Question
25


2 out of 2 points



Once
cost is established for a plant asset, it becomes the basis of accounting for
the asset unless the asset appreciates in value, in which case, market value
becomes the basis for accountability.


















































Part 2


• Question
1


2 out of 2 points



Which
one of the following is not a benefit of budgeting?




• Question
2


2 out of 2 points



Laser
Performance Inc. has the following information available (amount in thousands).



Net Income
$30,000


Average Total Liabilities 80,000


Average Current Liabilities 36,000


Cash Provided by Operations 48,000


Cash Sales
130,000


Capital Expenditures 22,000


Dividends Paid
6,000



What is the current cash debt coverage?




• Question
3


2 out of 2 points



The
primary purpose of the statement of cash flows is to




• Question
4


2 out of 2 points



A
master budget consists of




• Question
5


2 out of 2 points



If the
board of directors authorizes a $100,000 restriction of retained earnings for a
future plant expansion, the effect of this action is to




• Question
6


2 out of 2 points



If
there were 60,000 pounds of raw materials on hand on January 1, 120,000 pounds
are desired for inventory at January 31, and 410,000 pounds are required for
January production, how many pounds of raw materials should be purchased in
January?




• Question
7


2 out of 2 points



Which
of the following income statement figures would probably be the best indicator
of a company’s future performance?




• Question
8


2 out of 2 points



The
date on which a cash dividend becomes a binding legal obligation is on the




• Question
9


2 out of 2 points



All of
the following statements regarding changes in accounting principles are true
except which of the following?




• Question
10


2 out of 2 points



A
manager of a cost center is evaluated mainly on




• Question
11


2 out of 2 points



A
critical factor in budgeting for a service firm is to




• Question
12


2 out of 2 points



Quincy
Corp. earned controllable margin of $500,000 on sales of $6,400,000. The
division had average operating assets of $5,200,000. The company requires a
return on investment of at least 8%. How much is residual income?




• Question
13


2 out of 2 points



A
comparison with other companies that provides insight into a company’s
competitive position is most commonly known as which of the following types of
comparisons?




• Question
14


2 out of 2 points



Which
one of the following items is not necessary in preparing a statement of cash
flows?




• Question
15


2 out of 2 points



Zoum
Corporation had the following transactions during 2014:



1 – Issued $125,000 of par value common stock for cash.


2 – Recorded and paid wages expense of $60,000.


3 – Acquired land by issuing common stock of par value
$50,000.


4 – Declared and paid a cash dividend of $10,000.


5 – Sold a long-term investment (cost $3,000) for cash of
$3,000.


6 – Recorded cash sales of $400,000.


7 – Bought inventory for cash of $160,000.


8 – Acquired an investment in Zynga stock for cash of
$21,000.


9 – Converted bonds payable to common stock in the amount of
$500,000.


10 – Repaid a 6 year note payable in the amount of $220,000.



What is the net cash provided by operating activities?




• Question
16


2 out of 2 points



Holden
Packaging Corporation began business in 2014 by issuing 80,000 shares of $5 par
common stock for $8 per share and 20,000 shares of 6%, $10 par preferred stock
for par. At year end, the common stock had a market value of $10. On its
December 31, 2014 balance sheet, Holden Packaging would report




• Question
17


2 out of 2 points



Assume
the following sales data for a company:



2015
$910,000


2014
$770,000


2013 700,000



If 2013 is the base year, what is the percentage increase in
sales from 2013 to 2014?




• Question
18


2 out of 2 points



Which
of the following is not typically a characteristic experienced by a company
during the growth phase of the corporate life cycle?




• Question
19


2 out of 2 points



Cochran
Corporation, Inc. has the following income statement (in millions):


COCHRAN CORPORATION, INC.


Income Statement


For the Year Ended December 31, 2014



Net Sales $240


Cost of Goods Sold 80


Gross Profit 160


Operating Expenses 65


Net Income $ 95



Using vertical analysis, what percentage is assigned to net
income?




• Question
20


2 out of 2 points



The
single most important output in preparing financial budgets is the




• Question
21


2 out of 2 points



Bogey
Co. recorded operating data for its Cheap division for the year. Bogey requires
its return to be 10%.



Sales
$ 1,400,000


Controllable margin 160,000


Total average assets 4,000,000


Fixed costs
100,000



What is the ROI for the year?




• Question
22


2 out of 2 points



On the
basis of the budget reports,




• Question
23


2 out of 2 points



A
flexible budget




• Question
24


2 out of 2 points



Ratios
are used as tools in financial analysis




• Question
25


2 out of 2 points



The
following information pertains to Marsh Company. Assume that all balance sheet
amounts represent average balance figures.



Total asset $400,000


Stockholders’ equity—common 200,000


Total stockholders’ equity 280,000


Sales revenue
120,000


Net income
25,000


Number of shares of common stock 8,000


Common dividends
9,000


Preferred dividends
6,000



What is Marsh’s payout ratio?




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