uop acc291 final exam



1) Intangible assets are the rights and privileges that
result from ownership of long-lived assets that

A. must be generated internally

B. are non-renewable
natural resources

C. do not have physical substance

D. have been
exchanged at a gain

2) Gains on an exchange of plant assets that has commercial
substance are

A. deducted from the cost of the new asset acquired

B. deferred

C. not possible

D. recognized

3) Using the percentage of receivables method for recording
bad debts expense, estimated uncollectible accounts are $15,000. If the balance
of the Allowance for Doubtful Accounts is $3,000 credit before adjustment, what
is the amount of bad debts expense for that period?

A. $15,000

B. $12,000

C. $18,000

D. $8,000

4) When an interest-bearing note matures, the balance in the
Notes Payable account is

A. less than the total amount repaid by the borrower

B. the difference
between the maturity value of the note and the face value of the note

C. equal to the total amount repaid by the owner

D. greater than the total amount repaid by the owner

5) Costs incurred to increase the operating efficiency or
useful life of a plant asset are referred to as

A. capital expenditures

B. expense expenditures

.c ordinary repairs

D. revenue

6) Hilton Company issued a four-year interest-bearing note
payable for $300,000 on January 1, 2011. Each January the company is required
to pay $75,000 on the note. How will this note be reported on the December 31,
2012 balance sheet?

A. Long-term debt, $300,000.

B. Long-term debt, $225,000.

C. Long-term debt,
$150,000; Long-term debt due within one year, $75,000.

D. Long-term debt,
$225,000; Long-term debt due within one year, $75,000.

7) When the effective-interest method of bond discount
amortization is used

A. the applicable interest rate used to compute interest
expense is the prevailing market interest rate on the date of each interest
payment date

B. the carrying value
of the bonds will decrease each period

C. interest expense will not be a constant dollar amount
over the life of the bond

D. interest paid to
bondholders will be a function of the effective-interest rate on the date the
bonds were issued

8) Capital stock to which the charter has assigned a value
per share is called

A. par value stock

B. no-par value stock

C. stated value stock

D. assigned value

9) Manner, Inc. has 5,000 shares of 5%, $100 par value,
noncumulative preferred stock and 20,000 shares of $1 par value common stock outstanding
at December 31, 2011. There were no dividends declared in 2010. The board of
directors declares and pays a $45,000 dividend in 2011. What is the amount of
dividends received by the common stockholders in 2011?

A. $0

B. $25,000

C. $45,000

D. $20,000

10) Two individuals at a retail store work the same cash
register. You evaluate this situation as

A. a violation of establishment of responsibility

B. a violation of
segregation of duties

C. supporting the establishment of responsibility

D. supporting internal
independent verification

11) The Sarbanes-Oxley Act imposed which new penalty for

A. Fines

B. Suspension

C. Criminal prosecution for executives

D. Return of
ill-gotten gains

12) The Sarbanes-Oxley Act requires that all publicly traded
companies maintain a system of internal controls. Internal controls can be
defined as a plan to

A. safeguard assets

B. monitor balance

C. control

D. evaluate capital

13) The purchase of treasury stock

A. decreases common stock authorized

B. decreases common
stock issued

C. decreases common stock outstanding

D. has no effect on
common stock outstanding

14) Which of the following is a fundamental factor in having
an effective, ethical corporate culture?

A. Efficient oversight by the company’s Board of Director

B. Workplace ethics

C. Code of conduct

D. Ethics management

15) Dawson Company issued 500 shares of no-par common stock
for $4,500. Which of the following journal entries would be made if the stock
has a stated value of $2 per share?

A. Cash: $4,500 Common Stock: 4,500

B. Cash: $4,500 Common Stock: 1,000 Paid-In Capital in
Excess of Par 3,500

C. Cash: $4,500 Common Stock: 1,000 Paid-In Capital in
Excess of Stated Value 3,500

D. Common Stock: $4,500 Cash: $4,500

16) Hahn Company uses the percentage of sales method for
recording bad debts expense. For the year, cash sales are $300,000 and credit
sales are $1,200,000. Management estimates that 1% is the sales percentage to
use. What adjusting entry will Hahn Company make to record the bad debts

A. Bad Debts Expense: $15,000 Allowances for Doubtful
Accounts: $15,000

B. Bad Debts Expense: $12,000 Allowances for Doubtful
Accounts: $12,000

C. Bad Debts Expense: $12,000 Accounts Receivable: $12,000

D. Bad Debts Expense: $15,000 Accounts Receivable: $15,000

17) Blanco, Inc. has the following income statement (in
millions): BLANCO, INC.

Income Statement for the Year Ended December 31, 2011 Net
Sales: $200 Cost of Goods Sold: 120 Gross Profit $80 Operating Expenses: $44
Net Income: $36

Using vertical analysis, what percentage is assigned to Net

A. 100%

B. 82%

C. 18%

D. 25%

18) Marsh Company has other operating expenses of $240,000.
There has been an increase in prepaid expenses of $16,000 during the year, and
accrued liabilities are $24,000 lower than in the prior period. Using the
direct method of reporting cash flows from operating activities, what were
Marsh’s cash payments for operating expenses?

A. $228,000

B. $232,000

C. $200,000

D. $280,000

19) Andrews, Inc. paid $45,000 to buy back 9,000 shares of
its $1 par value common stock. This stock was sold later at a selling price of
$6 per share. The entry to record the sale includes a

A. credit to Paid-In Capital from Treasury Stock for $9,000

B. credit to Retained
Earnings for $9,000

C. debit to Pain-In
Capital from Treasury Stock for $45,000

D. debit to Retained
Earnings for $45,000

20) The book value of an asset is equal to the

A. asset’s market value less its historic cost

B. blue book value
relied on by secondary markets

C. replacement cost
of the asset

D. asset’s cost less accumulated depreciation

21) Ordinary repairs are expenditures to maintain the
operating efficiency of a plant asset and are referred to as

A. capital expenditures

B. expense expenditures

C. improvements

D. revenue

22) The interest charged on a $200,000 note payable, at a
rate of 6%, on a 2-month note would be:

A. $12,000

B. $6,000

C. $3,000

D. $2,000

23) If a corporation issued $3,000,000 in bonds which pay
10% annual interest, what is the annual net cash cost of this borrowing if the
income tax rate is 30%?

A. $3,000,000

B. $90,000

C. $300,000

D. $210,000

24) A corporation issued $600,000, 10%, 5-year bonds on
January 1, 2011 for 648,666, which reflects an effective-interest rate of 8%.
Interest is paid semiannually on January 1 and July 1. If the corporation uses
the effective-interest method of amortization of bond premium, the amount of
bond interest expense to be recognized on July 1, 2011, is

A. $30,000

B. $24,000

C. $32,434

D. $25,946

25) If a corporation has only one class of stock, it is
referred to as

A. classless stock

B. preferred stock

C. solitary stock

D. common stock

26) ABC, Inc. has 1,000 shares of 5%, $100 par value,
cumulative preferred stock and 50,000 shares of $1 par value common stock
outstanding at December 31, 2011. What is the annual dividend on the preferred

A. $50 per share

B. $5,000 in total

C. $500 in total

D. $.50 per share

27) When the selling price of treasury stock is greater than
its cost, the company credits the difference to

A. Gain on Sale of Treasury Stock

B. Paid-in Capital
from Treasury Stock

C. Paid-in Capital in
Excess of Par Value

D. Treasury Stock

28) Intangible assets _______

A. should be reported under the heading Property, Plant, and

B. should be reported
as a separate classification on the balance sheet

C. should be reported as Current Assets on the balance sheet

D. are not reported on the balance sheet because they lack
physical substance

29) Where would the event purchased land for cash appear, if
at all, on the indirect statement of cash flows?

A. Operating activities section

B. Investing
activities section

C. Financing
activities section

D. Does not represent
a cash flow


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