__________________ includes policies, procedures and mindset of top management. A tangible representation can be found in the employee handbook or annual statement.
•
Risk assessment
•
Monitoring process
•
Co
...
__________________ includes policies, procedures and mindset of top management. A tangible representation can be found in the employee handbook or annual statement.
•
Risk assessment
•
Monitoring process
•
Control environment
•
Control activity
2
Examine the partial balance sheet vertical analysis below.
ASSETS
Cash $97,500 15%
Accounts Receivable $552,500 85%
Total Assets $650,000 100%
LIABILITIES
Accounts Payable $78,000 12%
Notes Payable _______ ____
Total Liabilities 50%
EQUITY
Total Equity $325,000 50%
Based on the information shown, what is the correct amount and percentage of notes payable?
•
$403,000; 62%
•
$247,000; 38%
•
$325,000; 50%
•
$572,000; 88%
3
Don's Landscaping Service purchased a backhoe for $12,000. It has a useful life of five years and a residual value of $1,750.
Based on this information, what is the straight-line depreciation for one year for this asset?
•
$1,025
•
$10,250
•
$2,400
•
$2,050
4
Using the information shown here, which of the following is the asset turnover ratio?
•
0.51
•
0.43
•
0.86
•
0.56
5
Which of the following internal controls has Jim implemented at his company if he hires an outside auditing firm to review the company's financial records?
•
Risk assessment
•
Control environment
•
Monitoring processes
•
Information and communication systems
6
Which of the following is NOT a true statement regarding residual value?
•
Residual value is found below the referenced asset with a credit balance.
•
An asset cannot be depreciated beyond its residual value.
•
The asset's owner determines what the residual value will be.
•
It is an estimate of an asset's book value when fully depreciated.
7
Nancy received $5,000 cash from her credit union to fund the remodeling of her store.
Which kind of activity on a statement of cash flows does this exemplify?
•
Financing activity
•
Operating activity
•
Capital activity
•
Investing activity
8
Which of the amounts below is the total interest Scott will pay when he is approved for a 9-month loan at an interest rate of 2.9% for a new, $12,500 company car?
•
$264.63
•
$282.54
•
$271.88
•
$259.89
9
Which asset below is a current asset?
•
Delivery truck
•
Prepaid insurance premium
•
Commercial kitchen
•
Office building
10
As Ned reviewed the credit accounts, he noticed that a customer who recently filed bankruptcy had an accounts receivable balance of $4,890. Ned instructed the accountant to make a journal entry to write off the customer's entire balance.
Which of the following journal entries would be listed as debit?
•
Accounts Receivable
•
Cash
•
Allowance for Bad Debts
•
Bad Debt Expense
11
Based on the information from the last six months (shown here), which of the following is the current ratio?
•
9.08
•
7.31
•
6.46
•
9.24
12
Unearned revenue is a(n) __________ account and carries a normal __________ balance.
•
equity; debit
•
asset; debit
•
revenue; credit
•
liability; credit
13
What is the formula for the rate of return on sales?
•
Net Income / Net Sales
•
Gross Income / Gross Sales
•
Net Income / Gross Sales
•
Gross Income / Net Sales
14
Which of the following is NOT depreciated because it does not get used up?
•
Land fixtures
•
Buildings
•
Land
•
Automobiles
15
A business purchased a machine for $750,000. The expected life of the machine is five years and the straight line depreciation rate is 20%. The machine is expected to have a residual value of $10,000.
Using the double-declining balance method of depreciation, what is the correct book value for the machine at the end of the first year?
•
$450,000
•
$602,000
•
$440,000
•
$590,000
16
Using these end of period figures, which of the following is the rate of return on sales?
•
1.20
•
1.42
•
1.70
•
2.59
17
Based on the above information, what amount would be recorded in accounts receivable at 1-30 days?
•
$50,000
•
$25,000
•
$15,000
•
$75,000
18
Considering the information in the general journal shown here, which of the following is the correct percent of credit sales that are uncollectible?
•
9%
•
2%
•
7%
•
5%
19
Which of the following allowances for bad debt should the company enter into their financials for an Accounts Receivable account with a balance of $1,500,000 if the company estimates that 3.3% of receivables will be uncollectible?
•
$49,500
•
$37,500
•
$60,000
•
$90,000
20
Which of the following examples can be classified as an accounts receivable?
•
Terry sent a specialty cage supplier a payment on account.
•
Terry took a $500 deposit for the upcoming stay of the boa constrictor.
•
Terry placed an order for food for the spotted genet. The terms of sale were cash in advance.
•
Terry issued a paycheck to his receptionist.
21
Which group of assets contains ONLY personal property?
•
Landscaping, supplies and factory equipment
•
Vehicle, landscaping and office equipment
•
Vehicle, supplies and factory equipment
•
Land, supplies and vehicle
22
Using the aging schedule above, which of the following is the total uncollectible amount?
•
$302
•
$500
•
$365
•
$284.35
23
LONG TERM ASSET
ASSET: ASSEMBLY EQUIPMENT
COST $15,000
ACCUMULATED DEPRECIATION $2,500
PREPAID INSURANCE $500
MAINTENANCE COSTS $1,500
BOOK VALUE ______
Based on the information shown here, which of the following is the book value of the assembly equipment?
•
$12,500
•
$12,000
•
$10,500
•
$13,500
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