Accounting

Q: ratios are used as tools in financial analysis a.instead of horizontal and vertical analyses b.because they can provide information that may not be apparent from inspection of the individual components of the financial statements c.because even single ratios by themselves are quite meaningful d.because they are prescribed by gaap

Q: Martinez Co. borrowed $50,000 on March 1 of the current year by signing a 60-day, 9%, interest-bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry for the payment should include a a. debit to Interest Payable for $750 b. debit to Interest Expense for $750 c. credit to Cash for $50,000 d. credit to Cash for $54,500

Q: a successful grocery store would probably have a.a low inventory turnover b.a high inventory turnover c.zero profit margin d.low volume

Q: Federal income taxes are subject to a maximum amount per employee per year. a. True b. False

Q: a company has an average inventory on hand of $60,000 and its average days in inventory is 29.2 days. what is the cost of goods sold? a.$750,000 b.$1,752,000 c.$1,680,000 d.$876,000

Q: The use of a separate payroll bank account is not an advantageous control, because it creates more complexity in reconciliation functions for a company and invites theft. a. True b. False

Q: the inventory turnover is calculated by dividing a.cost of goods sold by the ending inventory b.cost of goods sold by the beginning inventory c.cost of goods sold by the average inventory d.average inventory by cost of goods sold

Q: Notes payable may be issued to creditors to satisfy previously created accounts payable. a. True b. False

Q: a general rule to use in assessing the average collection period is that it a.should not exceed 30 days b.can be any length as long as the customer continues to buy merchandise c.should not greatly exceed the return period d.should not greatly exceed the credit term period

Q: Payroll taxes levied against employers become an employer liability at the time the employee wages are incurred. a. True b. False

Q: if the average collection period is 45 days, what is the receivables turnover? a.8.1 times b.8.9 times c.4.5 times d.none of the above

Q: a company has a receivables turnover ratio of 10. the average net receivables during the period are $600,000. what is the amount of net credit sales for the period? a.$60,000 b.$6,000,000 c.$720,000 d.cannot be determined from the information given

Q: FICA tax becomes a liability to the federal government at the time an employee's payroll is prepared. a. True b. False

Q: if a company has a current ratio of 1.2:1, what respective effects will the borrowing of cash by short-term debt and collection of accounts receivable have on the ratio?

Q: Payroll taxes only include social security taxes and federal unemployment and state unemployment taxes. a. True b. False

Q: net sales are $1,800,000, beginning total assets are $700,000, and the asset turnover is 3.0. what is the ending total asset balance? a.$600,000 b.$500,000 c.$700,000 d.$650,000

Q: In order to be a recorded contingent liability, the liability must be possible and easily estimated. a. True b. False

Q: Form W-4 is a form authorizing employers to withhold a portion of employee earnings for payment of an employee’s federal income taxes. a. True b. False

Q: the following information pertains to bell company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the inventory turnover for this company?a.2 timesb.2.25 timesc.1 timed..44 times

Q: Medicare taxes are paid by both the employee and the employer. a. True b. False

Q: the following information pertains to bell company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the receivables turnover for this company?a.2.8 timesb.2 timesc.3.4 timesd.3 times

Q: the following information pertains to bell company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the current ratio for this company?a.1.42b.0.80c.1.16d.0.60

Q: Obligations that may arise from past transactions only if certain events occur in the future are contingent liabilities. a. True b. False

Q: the following information pertains to bell company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the return on assets for this company?a.6.8%b.10.5%c.11.7%d.26.7%

Q: Amounts withheld from each employee for social security and Medicare vary by state. a. True b. False

Q: The discount on a note payable is charged to an account that has a normal credit balance. a. True b. False

Q: the following information pertains to bell company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the profit margin for this company?a.42.86%b.18.75%c.23.5%d.15.0%

Q: the following information pertains to bell company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the price earnings ratio for this company?a.6 timesb.2.5 timesc.8 timesd.4 times

Q: The accounting for defined benefit plans is usually very easy and straightforward. a. True b. False

Q: the following information pertains to bell company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the return on common stockholders equity for this company?a.13.3%b.5%c.23.3%d.53.3%

Q: Depending on when an unfunded pension liability is to be paid, it will be classified on the balance sheet as either a long-term or a current liability. a. True b. False

Q: the following information pertains to lance company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the current ratio for this company?a.1.30b.1.40c.1.80d.0.64

Q: Federal unemployment compensation taxes that are collected by the federal government are not paid directly to the unemployed but are allocated among the states for use in state programs. a. True b. False

Q: mays corporation reported net income $24,000; net sales $400,000; and average assets $600,000 for 2012. what is the 2012 profit margin? a.6% b.12% c.40% d.200%

Q: Federal unemployment taxes are paid by the employer and the employee. a. True b. False

Q: the following information pertains to bell company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the current cash debt coverage ratio for this company?a.0.5 timesb.3 timesc.0.33 timesd.0.14 times

Q: Most employers are required to withhold federal unemployment taxes from employee earnings. a. True b. False

Q: the following information pertains to lance company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the inventory turnover for this company?a.3.3 timesb.2 timesc.6 timesd.0.30 time

Q: The proceeds from discounting a $20,000, 60-day note payable at 6% are $20,200. a. True b. False

Q: the following information pertains to lance company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the receivables turnover for this company?a.2.1 timesb.2 timesc.9.6 timesd.4.8 times

Q: All long-term liabilities eventually become current liabilities. a. True b. False

Q: the following information pertains to lance company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the return on assets for this company?a.7.0%b.14.0%c.8.0%d.16.0%

Q: The amount of money a borrower receives from the lender is called the discount rate. a. True b. False

Q: the following information pertains to lance company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the profit margin for this company?a.40.0%b.45.0%c.17.5%d.20.0%

Q: For most companies, notes payable is the largest current liability. a. True b. False

Q: Internal controls for cash payments apply to payrolls. a. True b. False

Q: During the first year of operations, employees earned vacation pay of $35,000. The vacations will be taken during the second year. The vacation pay expense should be recorded in the second year as the vacations are taken by the employees. a. True b. False

Q: the following information pertains to lance company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the price earnings ratio for this company?a.2 timesb.3.8 timesc.4 timesd.5.0 times

Q: The journal entry for the cost of warranty repairs that were incurred during the current period, but related to sales made in prior years, includes a debit to Warranty Expense. a. True b. False

Q: the following information pertains to lance company. assume that all balance sheet amounts represent both average and ending balance figures. assume that all sales were on credit.what is the return on common stockholders equity for this company?a.13.1%b.15.0%c.26.3%d.30.0%

Q: An interest-bearing note is a loan in which the lender deducts interest from the amount loaned before the money is advanced to the borrower. a. True b. False

Q: the following information is available for finley company:the receivables turnover ratio for 2012 isa.8.3 timesb.3.9 timesc.7.9 timesd.10.0 times

Q: Interest expense is reported in the Operating Expense section of the income statement. a. True b. False

Q: the following information is available for finley company:the inventory turnover ratio for 2012 isa.4.3 timesb.4.0 timesc.2.0 timesd.2.4 times

Q: solvency is of most interest to a.short-term creditors b.stockholders c.competitors d.long-term creditors

Q: The borrower issues a note payable to a creditor. a. True b. False

Q: the following amounts were taken from the financial statements of turner company:the price-earnings ratio for 2012 isa.25 timesb.30 timesc.14 timesd.8 times

Q: An employee's take-home pay is equal to gross pay less all voluntary deductions. a. True b. False

Q: the following amounts were taken from the financial statements of turner company:the profit margin ratio for 2012 isa.18.0%b.18.4%c.17.5%d.36%

Q: In a defined benefits plan, the employer bears the investment risks in funding a future retirement income benefit. a. True b. False

Q: the following amounts were taken from the financial statements of turner company:the return on assets ratio for 2012 isa.16%b.14%c.32%d.28%

Q: Generally, all deductions made from an employee's gross pay are required by law. a. True b. False

Q: the following amounts were taken from the financial statements of brandt company:the cash debt coverage ratio for 2012 isa.16.9%b.16.2%c.11.2%d.29.4%

Q: Taxes deducted from an employee's earnings to finance social security and Medicare benefits are called FICA taxes. a. True b. False

Q: the following amounts were taken from the financial statements of brandt company:the times interest earned ratio for 2012 isa.3.3 timesb.5.0 timesc.4.3 timesd.5.5 times

Q: A defined contribution plan promises employees a fixed annual pension benefit. a. True b. False

Q: which of these is not a liquidity ratio? a.current ratio b.asset turnover ratio c.inventory turnover ratio d.receivables turnover ratio

Q: Payroll taxes are based on the employee's net pay. a. True b. False

Q: Which measure(s) is(are) useful in evaluating the efficiency in managing inventories?1. Inventory turnover ratio2. Days in inventorya. 1 only.b. 2 only.c. Both 1 and 2.d. Neither 1 nor 2.

Q: Employers are required to compute and report payroll taxes on a calendar-year basis, even if a different fiscal year is used for financial reporting and income tax purposes. a. True b. False

Q: Which measure(s) is(are) an evaluation of a company’s ability to pay current liabilities?1. Current cash debt coverage ratio.2. Current ratio.a.1 onlyb.2 onlyc.both 1 and 2d.neither 1 nor 2

Q: FICA tax is a payroll tax that is paid only by employers. a. True b. False

Q: the current ratio would be of most interest to a.short-term creditors b.long-term creditors c.stockholders d.customers

Q: Most employers use payroll checks drawn on a special bank account for paying the payroll. a. True b. False

Q: net sales are $3,000,000, beginning total assets are $1,400,000, and the asset turnover is 2.5 times. what is the ending total asset balance? a.$1,200,000 b.$1,000,000 c.$1,400,000 d.$1,600,000

Q: For proper matching of revenues and expenses, the estimated cost of fringe benefits must be recognized as an expense of the period during which the employee earns the benefits. a. True b. False

Q: a successful discount retail store such as kmart would probably have a.a low inventory turnover b.a high inventory turnover c.zero profit margin d.low volume

Q: The payroll register is a multicolumn form used to assemble the payroll-related data for all employees. a. True b. False

Q: marley corporation had net income of $250,000 and paid dividends to common stockholders of $50,000 in 2012. the weighted average number of shares outstanding in 2012 was 50,000 shares. reese corporation's common stock is selling for $30 per share on the new york stock exchange. reese corporation's payout ratio for 2012 is a.$5 per share b.25% c.20% d.12.5%

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