Question 1

Interest expense is reported under Other Expenses in the statement of earnings.

Accepted Answer

A) True 
 B)False  True

Question 2

A company receives $99, of which $9 is for PST (provincial sales tax). The journal entry to record the sale would include a

Accepted Answer

A)  debit to Cash for $90. 
B)  debit to PST Expense for $9. 
C)  credit to PST Payable for $9. 
D)  debit to Sales for $99. 
A)  debit to Cash for $90. 
B)  debit to PST Expense for $9. 
C)  credit to PST Payable for $9. 
D)  debit to Sales for $99. C

Question 3

Notes payable usually require the borrower to pay interest.

Accepted Answer

A) True 
 B)False  True

Question 4

A low trade payables turnover ratio caused by an aggressive cash management strategy, while the quick ratio is adequate, would be perceived by analysts as a weakness.

Accepted Answer

A) True 
 B)False

Question 5

All contingent liabilities should be classified as either current or long-term liabilities on the statement of financial position for the current period.

Accepted Answer

A) True 
 B)False

Question 6

A company's quick ratio:

Accepted Answer

A)  indicates the length of time the company takes to pay its short-term creditors. 
B)  indicates how quickly the company converts its current assets to cash. 
C)  is computed by dividing current assets by current liabilities, excluding accounts payable for inventory purchases. 
D)  can never be larger than its current ratio at the same date. 
A)  indicates the length of time the company takes to pay its short-term creditors. 
B)  indicates how quickly the company converts its current assets to cash. 
C)  is computed by dividing current assets by current liabilities, excluding accounts payable for inventory purchases. 
D)  can never be larger than its current ratio at the same date.

Question 7

A liability, to be reported on the statement of financial position, must have a fixed, known amount to be paid in the future.

Accepted Answer

A) True 
 B)False

Question 8

A Co, a biotechnology company, reported cost of goods sold of $345.2 million and trade payables of $121.6 million for 2013. In 2012, cost of goods sold was $300.8 million and trade payable was $103.9 million. What was A Co's trade payables turnover ratio in 2013?

Accepted Answer

A)  2.90 
B)  2.84 
C)  3.06 
D)  2.86 
A)  2.90 
B)  2.84 
C)  3.06 
D)  2.86

Question 9

An employee receives a bi-weekly gross salary of $2,000. Income tax is $218, CPP is $99, EI is $36, and union dues are $50. What is the amount of the employee's take home pay (net pay) on a bi-weekly basis?

Accepted Answer

A)  $2,000 
B)  $1,732 
C)  $1,782 
D)  $1,597 
A)  $2,000 
B)  $1,732 
C)  $1,782 
D)  $1,597

Question 10

The time value of money refers to the fact that interest accrues on borrowed money with the passage of time.

Accepted Answer

A) True 
 B)False

Question 11

What are "Future Income taxes"? Where specifically would they appear in financial statements?

Accepted Answer

Future Income taxes arise due to the fac

Question 12

Failure to make a necessary adjusting entry for accrued interest on a note payable would cause which of the following?

Accepted Answer

A)  An understatement of liabilities and shareholders' equity. 
B)  An overstatement of profit, an understatement of liabilities, and an overstatement of shareholders' equity. 
C)  Profit to be understated and liabilities to be understated. 
D)  Profit to be overstated and assets to be understated. 
A)  An understatement of liabilities and shareholders' equity. 
B)  An overstatement of profit, an understatement of liabilities, and an overstatement of shareholders' equity. 
C)  Profit to be understated and liabilities to be understated. 
D)  Profit to be overstated and assets to be understated.

Question 13

With an interest-bearing note, the amount of cash received upon issue of the note generally exceeds the note's face value.

Accepted Answer

A) True 
 B)False

Question 14

Freeman Inc. reported a profit of $40,000 for 20A. The income tax return excluded a revenue item of $3,000 (reported on the income statement) because under the tax laws the $3,000 would not be reported for tax purposes until 20B. Assuming a 30% income tax rate, this situation would cause a 20A future tax amount of which of the following?

Accepted Answer

A)  $3,000 (debit) 
B)  $900 (credit) 
C)  $900 (debit) 
D)  $3,000 (credit) 
A)  $3,000 (debit) 
B)  $900 (credit) 
C)  $900 (debit) 
D)  $3,000 (credit)

Question 15

GST (goods and services tax) collected by a retailer is recorded by

Accepted Answer

A)  crediting GST Revenue. 
B)  debiting GST Expense. 
C)  debiting GST Payable. 
D)  crediting GST Payable. 
A)  crediting GST Revenue. 
B)  debiting GST Expense. 
C)  debiting GST Payable. 
D)  crediting GST Payable.

Question 16

Purchase of inventory for cash will:

Accepted Answer

A)  increase the quick ratio. 
B)  increase the current ratio. 
C)  decrease the current ratio. 
D)  decrease the quick ratio. 
A)  increase the quick ratio. 
B)  increase the current ratio. 
C)  decrease the current ratio. 
D)  decrease the quick ratio.

Question 17

Unearned revenues should be classified as Other Revenues on the statement of earnings.

Accepted Answer

A) True 
 B)False

Question 18

A quick ratio that is high according to an industry average might mean the company may have excessive inventory levels or slow moving inventory items.

Accepted Answer

A) True 
 B)False

Question 19

Deferred revenue is another term for which of the following?

Accepted Answer

A)  Trade payables 
B)  Sales revenue 
C)  Unearned revenue 
D)  Prepaid expenses 
A)  Trade payables 
B)  Sales revenue 
C)  Unearned revenue 
D)  Prepaid expenses

Question 20

A current liability is a debt that can reasonably be expected to be paid

Accepted Answer

A)  out of cash currently on hand. 
B)  within one year. 
C)  out of currently recognized revenues. 
D)  between 6 months and 18 months. 
A)  out of cash currently on hand. 
B)  within one year. 
C)  out of currently recognized revenues. 
D)  between 6 months and 18 months.

Interest expense is reported under Other Expenses in the statement of earnings.

A company receives $99, of which $9 is for PST (provincial sales tax). The journal entry to record the sale would include a

Notes payable usually require the borrower to pay interest.

A low trade payables turnover ratio caused by an aggressive cash management strategy, while the quick ratio is adequate, would be perceived by analysts as a weakness.

All contingent liabilities should be classified as either current or long-term liabilities on the statement of financial position for the current period.

A company's quick ratio:

A liability, to be reported on the statement of financial position, must have a fixed, known amount to be paid in the future.

A Co, a biotechnology company, reported cost of goods sold of $345.2 million and trade payables of $121.6 million for 2013. In 2012, cost of goods sold was $300.8 million and trade payable was $103.9 million. What was A Co's trade payables turnover ratio in 2013?

An employee receives a bi-weekly gross salary of $2,000. Income tax is $218, CPP is $99, EI is $36, and union dues are $50. What is the amount of the employee's take home pay (net pay) on a bi-weekly basis?

The time value of money refers to the fact that interest accrues on borrowed money with the passage of time.

What are "Future Income taxes"? Where specifically would they appear in financial statements?

Failure to make a necessary adjusting entry for accrued interest on a note payable would cause which of the following?

With an interest-bearing note, the amount of cash received upon issue of the note generally exceeds the note's face value.

GST (goods and services tax) collected by a retailer is recorded by

Purchase of inventory for cash will:

Unearned revenues should be classified as Other Revenues on the statement of earnings.

A quick ratio that is high according to an industry average might mean the company may have excessive inventory levels or slow moving inventory items.

Deferred revenue is another term for which of the following?

A current liability is a debt that can reasonably be expected to be paid

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments, Financial Statements, and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue, Receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

Filters

Exam 10: Reporting and Interpreting Bond Securities

Interest expense is reported under Other Expenses in the statement of earnings.

A company receives $99, of which $9 is for PST (provincial sales tax). The journal entry to record the sale would include a

Notes payable usually require the borrower to pay interest.

A low trade payables turnover ratio caused by an aggressive cash management strategy, while the quick ratio is adequate, would be perceived by analysts as a weakness.

All contingent liabilities should be classified as either current or long-term liabilities on the statement of financial position for the current period.

A company's quick ratio:

A liability, to be reported on the statement of financial position, must have a fixed, known amount to be paid in the future.

A Co, a biotechnology company, reported cost of goods sold of $345.2 million and trade payables of $121.6 million for 2013. In 2012, cost of goods sold was $300.8 million and trade payable was $103.9 million. What was A Co's trade payables turnover ratio in 2013?

An employee receives a bi-weekly gross salary of $2,000. Income tax is $218, CPP is $99, EI is $36, and union dues are $50. What is the amount of the employee's take home pay (net pay) on a bi-weekly basis?

The time value of money refers to the fact that interest accrues on borrowed money with the passage of time.

What are "Future Income taxes"? Where specifically would they appear in financial statements?

Failure to make a necessary adjusting entry for accrued interest on a note payable would cause which of the following?

With an interest-bearing note, the amount of cash received upon issue of the note generally exceeds the note's face value.

GST (goods and services tax) collected by a retailer is recorded by

Purchase of inventory for cash will:

Unearned revenues should be classified as Other Revenues on the statement of earnings.

A quick ratio that is high according to an industry average might mean the company may have excessive inventory levels or slow moving inventory items.

Deferred revenue is another term for which of the following?

A current liability is a debt that can reasonably be expected to be paid

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments, Financial Statements, and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue, Receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

Filters