ACC 291 Final Exam with Answers

ACC
291 Final Exam

1) 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?

2) 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?

3) Intangible assets

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

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

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

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

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

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

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

11) 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%?

12) 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?

13) 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

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

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

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

17) 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?

18) 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. acc/291 final exam. 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?

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

20) The purchase of treasury stock

21) 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, acc 291 final exam what were
Marsh’s cash payments for operating expenses?

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

23) In performing a vertical analysis, the base for cost of goods sold
is

24) Blanco, Inc. has the following income statement (in millions):
Using vertical analysis, what percentage is assigned to Net Income?

25) 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?

26) 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. acc291 final exam. The entry to record the sale includes a

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

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

29) The Sarbanes-Oxley Act imposed which new penalty for executives?

30) 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