Comprehensive Financial Analysis and Decision-Making in Accounting: Week 8 Final Exam

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Week 8 : Final Exam-Final ExamPage:12Page 11.(TCO A) A corporation has which of the following sets of characteristics?(Points : 5)Shared control, tax advantages, increased skills, and resourcesSimple to set up and maintains control with the founderEasier to transfer ownership and raise funds, no personal liability for stockholdersHarder to raise funds and gives owner control2.(TCO A) The Dividends account_____.(Points : 5)is increased with a debitis decreased with a creditis not an expense accountAll of the above3.(TCOs A, B) Below is a partial list of account balances forDenton Company:Cash$7,000Prepaid insurance700Accounts receivable3,500Accounts payable2,800Notes payable4,200Common stock1,400Dividends700Revenues21,000

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Expenses17,500What did Denton Company show as total credits?(Points : 5)$30,100$29,400$28,700$30,8004.(TCOs B, E) Using accrual accounting, expenses are recorded and reported only_____.(Points : 5)when they are incurred, whether or not cash is paidwhen they are incurred and paid at the same timeif they are paid before they are incurredif they are paid after they are incurred5.(TCO D)Three companies report the same cost of goods available for sale, but each employs adifferent inventory costing method. If the price of goods has increased during the period, then thecompany using _____.(Points : 5)LIFO will have the highest ending inventoryFIFO will have the highest cost of goods soldAll three companies will have the same value for ending inventory.average cost will have an ending inventory value that falls between FIFO and LIFO6.(TCOs A, E) Equipment with a cost of $192,000 has an estimated salvage value of $18,000 and anestimated life of 4 years or 12,000 hours. It is to be depreciated by the straight-line method. What is theamount of depreciation for the first full year, during which the equipment was used 3,300 hours?(Points : 5)$48,000$52,500$49,500$43,500

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7.(TCOs D, G) Lopez Corporation issues 500 ten-year, 8%, $1,000 bonds dated January 1, 2007, at 96.The journal entry to record theissuance will show a _____.(Points : 5)debit to Cash of $500,000credit to Discount on Bonds Payable for $20,000credit to Bonds Payable for $480,000debit to Cash for $480,0008.(TCO C) Accounts receivablearising from sales to customers amounted to $80,000 and $70,000 at thebeginning and end of the year, respectively. Income reported on the income statement for the year was$240,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to bereported on the statement of cash flows is _____.(Points : 5)$240,000$250,000$310,000$230,0009.(TCO F) If you are comparing the 2010 income statement numbers with the income statement numbersfrom 2009 and 2008, you are conducting a _____.(Points : 5)common-size analysishorizontal analysisvertical analysisratio analysis10.(TCO F) Comparisons of data within a company are an example of thefollowing comparativebasis.(Points : 5)Industry averagesIntercompanyIntracompanyInterregional

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