ACC 291 Final Exam Questions with Answers Options

ACC 291 Final Exam
1) Intangible assets are the rights and privileges
that result from ownership of long-lived assets that
2) Gains on an exchange of plant assets that has
commercial substance are
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?
4) When an interest-bearing note matures, the balance
in the Notes Payable account is
5) Costs incurred to increase the operating efficiency
or useful life of a plant asset are referred to as
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?
7) When the effective-interest method of bond discount
amortization is used
8) Capital stock to which the charter has assigned a
value per share is called
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?
10) Two individuals at a retail store work the same
cash register. You evaluate this situation as
11) The Sarbanes-Oxley Act imposed which new penalty
for executives?
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
13) The purchase of treasury stock
14) Which of the following is a fundamental factor in
having an effective, ethical corporate culture?
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?
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 expense?
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 Income?
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?
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
20) The book value of an asset is equal to the
21) Ordinary repairs are expenditures to maintain the
operating efficiency of a plant asset and are referred to as
22) The interest charged on a $200,000 note payable,
at a rate of 6%, on a 2-month note would be:
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%?
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
25) If a corporation has only one class of stock, it
is referred to as
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
stock?
28) When the selling price of treasury stock is
greater than its cost, the company credits the difference to
29) Intangible assets­­­_______

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