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Strayer ACC556 Week 5 Midterm Exam Part 1& Part 2 Latest 2016 Jan.

$42.00

Category: Accounting Tags: , 0, acc556, account, accounting, accounting, accounts, aets, balance, cash, check, common, company, cost, equity, exam, following, goods, income, information, inventory, latest, method, midterm, period, physical, points, receivable, reconciliation, revenues, statement, stockholders, strayer, total, units, using, week, whichof
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Strayer Week 5 Midterm Exam Part 1 Latest 2016 Jan.



• Question
1


2 out of 2 points



Consistent
use of the same accounting principles and methods is necessary for meaningful
analysis of trends within a company.




• Question
2


2 out of 2 points



An
advantage of using the periodic inventory system is that it requires less
record keeping than the perpetual inventory system.




• Question
3


2 out of 2 points



Use the
following data to calculate the current ratio.


Carne Auto Supplies


Balance Sheet


December 31, 2014




Cash $ 35,000 Accounts payable $ 65,000


Accounts receivable 50,000 Salaries and wages payable 10,000


Inventory
70,000 Mortgage
payable
90,000


Prepaid insurance 40,000 Total liabilities $165,000


Stock investments 80,000


Land
95,000


Buildings
$100,000
Common stock
$120,000


Less: Accumulated
Retained earnings
250,000



depreciation (30,000) 85,000 Total stockholders’ equity $370,000


Trademarks 70,000 Total liabilities and


Total assets $535,000 stockholders’ equity $535




• Question
4


2 out of 2 points



The
partnership form of business organization




• Question
5


2 out of 2 points



Solvency
ratios measure the short-term ability of the company to pay its maturing
obligations.




• Question
6


2 out of 2 points



The
multiple-step income statement is considered more useful than the single-step
income statement because it highlights the components of net income.




• Question
7


2 out of 2 points



Financing
activities include the purchase or sale of long-lived assets or the purchase or
sale of investment securities.




• Question
8


2 out of 2 points



A
concentration of credit risk is a threat of nonpayment from a single customer
or class of customers that could adversely affect the financial health of the
company.




• Question
9


2 out of 2 points



Which
of the following would not be classified as a long-term liability?




• Question
10


2 out of 2 points



Lankston
Company began the year by issuing $90,000 of common stock for cash. The company
recorded revenues of $825,000, expenses of $720,000, and paid dividends of
$45,000. What was Lankston’s net income for the year?




• Question
11


2 out of 2 points



Which
of the following is not a common way that managers use the balance sheet?




• Question
12


2 out of 2 points



The
revenue recognition principle dictates that revenue be recognized in the
accounting period in which the performance obligation is satisfied.




• Question
13


2 out of 2 points



Marvin Services
Corporation had the following accounts and balances:


Accounts payable $18,000 Equipment $21,000


Accounts receivable 3,000 Land 21,000


Buildings ? Unearned service revenue 6,000


Cash 9,000 Total stockholders’ equity ?




If the balance of the Buildings account was $45,000 and the
equipment was sold for $21,000, what would be the total of stockholders’
equity?




• Question
14


2 out of 2 points



Expense
recognition is tied to revenue recognition.




• Question
15


2 out of 2 points



To
obtain maximum benefit from a bank reconciliation, the reconciliation should be
prepared by the employee authorized to sign checks.




• Question
16


2 out of 2 points



Which
of the following is the least likely consideration that management uses when
deciding whether to pay a dividend?




• Question
17


2 out of 2 points



An
aging of accounts receivable schedule is based on the premise that the longer
the period an account remains unpaid, the greater the probability that it will
eventually be collected.




• Question
18


2 out of 2 points



Source
documents can provide evidence that a transaction has occurred.




• Question
19


2 out of 2 points



The
economic resources that are owned by a business are called stockholders’
equity.




• Question
20


2 out of 2 points



Management
may choose any inventory costing method it desires as long as the cost flow
assumption chosen is consistent with the physical movement of goods in the
company.




• Question
21


2 out of 2 points



Requiring
employees to take vacations is a weakness in the system of internal controls
because it does not promote operational efficiency.




• Question
22


2 out of 2 points



Goods
that have been purchased FOB destination but are in transit, should be excluded
from a physical count of goods by the buyer.




• Question
23


2 out of 2 points



Owners
of business firms are the only people who need accounting information.




• Question
24


2 out of 2 points



The
best definition of assets is the




• Question
25


2 out of 2 points



Bathlinks
Corporation has a debt to assets ratio of 73%. This tells the user of
Bathlinks’s financial statements that








































Part 2


• Question
1


2 out of 2 points



Which
statement is incorrect?




• Question
2


2 out of 2 points



A trial
balance proves




• Question
3


2 out of 2 points



All of
the following are characteristics of every accounting information system except
it is a system




• Question
4


2 out of 2 points



What is
an advantage of using the multiple-step income statement?




• Question
5


2 out of 2 points



Which
of these would cause the inventory turnover ratio to increase the most?




• Question
6


2 out of 2 points



Independent
internal verification of the physical inventory process occurs when




• Question
7


2 out of 2 points



Olympus
Climbers Company has the following inventory data:


July
1 Beginning inventory 20 units at $19 $
380



7 Purchases 70 units at $20 1,400



22 Purchases 10 units at $22 220



$2,000



A physical count of merchandise inventory on July 30 reveals
that there are 32 units on hand. Using the FIFO inventory method, the amount
allocated to cost of goods sold for July is




• Question
8


2 out of 2 points



If a
company is given credit terms of 2/10, n/30, it should




• Question
9


2 out of 2 points



Two
companies report the same cost of goods available for sale but each employs a
different inventory costing method. If the price of goods has increased during
the period, then the company using




• Question
10


2 out of 2 points



At
Emerson Company, one bookkeeper prepares the cash deposits while the other
bookkeeper enters the collections in the journal and ledger. Which of the
following is the best explanation of this type of internal control principle
over cash receipts?




• Question
11


2 out of 2 points



Bad
Debt Expense is considered




• Question
12


2 out of 2 points



A
company usually determines the amount of supplies used during a period by:




• Question
13


2 out of 2 points



A
revenue generally




• Question
14


2 out of 2 points



A
merchandiser will earn an operating income of exactly $0 when




• Question
15


2 out of 2 points



Management
usually wants ________ financial statements and the IRS requires all businesses
to file _________ tax returns.




• Question
16


2 out of 2 points



Regions
Inc. pays its rent of $48,000 annually on January 1 and makes monthly adjusting
entries. If the February 28 monthly adjusting entry for prepaid rent is
omitted, which of the following are true?




• Question
17


2 out of 2 points



Receivables
are


Selected
Answer:


claims that are expected to be collected in cash.



• Question
18


2 out of 2 points



Fehr
Company sells merchandise on account for $5,000 to Kelly Company with credit
terms of 2/10, n/30. Kelly Company returns $1,000 of merchandise that was
damaged, along with a check to settle the account within the discount period.
What is the amount of the check?




• Question
19


2 out of 2 points



Dobler
Company gathered the following reconciling information in preparing its June
bank reconciliation:



Cash balance per books, 6/30 $8,400


Deposits in transit
600


Notes receivable and interest collected by bank 1,480


Bank charge for check printing 50


Outstanding checks
3,000


NSF check
280



The adjusted cash balance per books on June 30 is




• Question
20


2 out of 2 points



Smithson
Corporation’s unadjusted trial balance includes the following balances (assume
normal balances):


• Accounts
Receivable
$3,357,000


• Allowances
for Doubtful Accounts
$ 63,900



Bad debts are estimated to be 6% of outstanding receivables.
What amount of bad debt expense will the company record?




• Question
21


2 out of 2 points



Which
of the following is least likely to help a company minimize losses as credit
standards are relaxed?




• Question
22


2 out of 2 points



Which
one of the following is not an objective of a system of internal controls?




• Question
23


2 out of 2 points



If
Morris Corporation has a negative $131 million free cash flow, which of the
following statements is most likely true?




• Question
24


2 out of 2 points



All of
the following are true regarding the management and monitoring of cash except




• Question
25


2 out of 2 points



The
primary difference between accrued revenues and unearned revenues is that
accrued revenues have:




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