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E book for computer management

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29 views3 pages

Answers Chapter 2 Quiz.s13

E book for computer management

Uploaded by

vasuvasu06092005
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Name: __________________________

ACG 201
Chapter 2 Quiz
Spring 2013

Choose the most correct answer. Show your work on computational problems for full credit.
1. In a classified balance sheet, assets are usually classified as:
A) current assets; long-term assets; property, plant, and equipment; and intangible
assets.
B) current assets; long-term investments; property, plant, and equipment; and common
stocks.
C) current assets; long-term investments; tangible assets; and intangible assets.
D) current assets; long-term investments; property, plant, and equipment; and
intangible assets.

2. Liabilities are generally classified on a balance sheet as


A) small liabilities and large liabilities.
B) present liabilities and future liabilities.
C) tangible liabilities and intangible liabilities.
D) current liabilities and long-term liabilities.

3. Use the following data to determine the total dollar amount of assets to be classified as
current assets.
Carne Auto Supplies
Balance Sheet
December 31, 2012

Cash $ 60,000 Accounts Payable $ 65,00000


Prepaid Insurance 40,000 Salaries Payable 10,00000
Accounts Receivable 50,000 Mortgage Payable 90,00000
Inventory 70,000 Total Liabilities $165,00000
Land held for investment 80,000

Land 95,000
Buildings $100,000 Common Stock $120,00000
Less Accumulated Retained Earnings 250,00000
Depreciation (30,000) 70,000 Total SE $370,00000
Trademarks 70,000 Total Liabilities and

Total Assets $535,000 Stockholders' Equity $535,0000

A) $220,000.
B) $150,000.
C) $300,000.
D) $180,000.

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4. Use the following data to calculate the current ratio.
Carne Auto Supplies
Balance Sheet
December 31, 2012

Cash $ 60,000 Accounts Payable $ 65,000


Prepaid Insurance 40,000 Salaries Payable 10,000
Accounts Receivable 50,000 Mortgage Payable 90,000
Inventory 70,000 Total Liabilities $165,000
Land held for investment 80,000

Land 95,000
Buildings $100,000 Common Stock $120,000
Less Accumulated Retained Earnings 250,000
Depreciation (30,000) 70,000 Total SE $370,000
Trademarks 70,000 Total Liabilities and

Total Assets $535,000 Stockholders' Equity $535,000

A) 1.86 : 1.
B) 2.00 : 1.
C) 3.38 : 1.
D) 2.93 : 1. (Current Assets/Current Liab = $220,000 / $75,000)

5. K2 Corporation has assets of $1.80 million, common stock of $468,000, and retained
earnings of $285,000. What are the creditors' claims on their assets?
A) $1,617,000
B) $ 753,000
C) $1,047,000
D) $1,983,000

$1.80 million = Liabilities + ($468,000 + $285,000)


$1.80 million – 753,000 = Liabilities
$1,047,000 = Liabilities

6. Issuing new shares of common stock will


A) increase retained earnings.
B) decrease retained earnings.
C) increase common stock.
D) decrease common stock.

7. What organization issues U.S. accounting standards?


A) Security Exchange Commission.
B) International Accounting Standards Committee.
C) International Auditing Standards Committee.
D) Financial Accounting Standards Board.

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8. Two of the major characteristics that make accounting information useful are
A) Relevance and Faithful representation.
B) Verifiability and timeliness.
C) Comparability and flexibility.
D) Understandability and consistency.

9. A company using the same accounting principles from year to year is an application of
A) timeliness.
B) consistency.
C) full disclosure.
D) materiality.

10. The periodicity assumption states that the economic life of a business can be divided
into
A) equal time periods.
B) cyclical time periods.
C) artificial time periods.
D) perpetual time periods.

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