ACC 400 Financial Accounting Final Exam Practice

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ACC 400Financial Accounting Final Exam PracticeACC 400 Final Exam1.Zelma Company's last financial statements provided the following ratios:Current ratio3:2Quick ratio1:2Accounts receivable turnover 9.0 timesInventory turnover8.0timesNet income percentage12.5%Return on equity22.6%Return on assets9.8%To the nearest day, what is the operating cycle for Zelma?a)80 daysb)86 daysc)172 daysd)129 days2.The following events have been projected:A. Cash sales and collections from customers totaling $980,000B. Cash payments for operating expenses of $560,000C. Cash payments for income taxes and interest expense of $45,000D. Cash payments of prior period accruals of $80,000E. Borrowed $50,000 cash by issuing a note payable

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F. Cash dividends of $20,000The beginning balance of cash is $45,000. What is the budgeted ending balance of cash?a.$325,000b.$370,000c.$275,000d.$245,0003. On January 1, a businessexchanged a plant asset with a cost of $18,000 and accumulateddepreciation of $16,500 for a similar asset that had a list price of $23,000. The business receiveda trade-in allowance of $2,100 on the old plant asset. What was the result of the exchange?a. A $600 gain on the disposal of a plant asset.b. A $1,000 unrecognized gain on the exchange of a plant asset.c. A cost basis of $22,400 for the new plant assetd. A cost basis of $23,600 for the new plant asset4. Which one of the following isnotan objective of a system of internal controls?a.Safeguard company assetsb.Overstate liabilities in order to be conservativec.Enhance the accuracy and reliability of accounting recordsd.Reduce the risks of errors5.A company’s past experience indicates that 60% of its credit sales are collected in themonth of sale, 30% in the next month, and 5 % in the second month after the sale; the remainderis never collected.Budgeted credit sales were:July$120,000August72,000September180,000The cash inflow in the month of September is expected to be

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