Assignment
Question 1. Assets include
prepaid insurance and prepaid rent.
dividends paid to shareholders.
loans obtained by the company.
stockholders' investment in the business.
Question 2. For 2014, CAP Corporation reported net income of $96,000; net sales $1,440,000; and weighted average shares outstanding of 9,600. There were no preferred dividends. What was the 2014 earnings per share?
$100.00
$150.00
$10.00
$15.00
Question 3. Purchasing inventory is an example of a(n)
operating activity.
investing activity.
financing activity.
noncash investing and financing activity.
Question 4. Dividends declared are reported on which of the following statements?
Income Statement
Statement of Retained Earnings
Balance Sheet
Statement of Financial Position
Question 5. Which of the following describes the normal balance and classification of the Unearned Revenue account?
Credit, liability
Debit, liability
Debit, stockholders' equity
Credit, stockholders' equity
Question 6. The accrual accounting term used to indicate recording an expense before paying cash for the item is
deferral.
accrual.
depreciation.
prepayment.
Question 7. LBJ Company recorded the following events involving a recent purchase of merchandise.
- Received goods for $95,000, terms 2/10, n/30.
- Returned $4,500 of the shipment for credit due to damaged goods.
- Paid $1,000 for freight in.
- Paid the invoice within the discount period.
As a result of these events, the company's merchandise inventory
increased by 89,580.
increased by $89,690.
increased by $89,600.
increased by $91,500.
Question 8. In a period of declining prices, which of the following inventory methods generally results in the highest gross profit figure?
Average cost method
LIFO
FIFO
Cannot be determined based on the information given
Question 9. On a classified balance sheet, which is the least liquid asset listed below?
Inventories
Cash and cash equivalents
Accounts receivable, net
Short-term investments
Question 10. Which of the following is a component of internal control?
Safeguard assets
Limited access
Risk assessment
Encourage employees to follow company policies.