ACCT 504 Week 8, Final Exam 2

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ACCT 504 Week 8, Final Exam 2 Week 8 : Wk8 - Final Exam 1. (TCO A) An advantage of the corporate form of business is that (Points : 5) it has limited life. its owner’s personal resources are at ... stake. its ownership is easily transferable via the sale of shares of stock. it is simple to establish. 2. (TCO A) Which activities involve acquiring the resources to run the business? (Points : 5) Delivering Financing Investing Operating 3. (TCO A) For 2007 Landford Corporation reported net income of $30,000; net sales $400,000; and average share outstanding 6,000. There were no preferred stock dividends. What was the 2007 earnings per share? (Points : 5) $4.66 $0.20 $66.67 $5.00 4. (TCO C) Free cash flow provides an indication of a company’s ability to (Points : 5) generate cash to invest in new capital expenditures. generate net income. generate cash to pay dividends. both a and c. 5. (TCO C) When a corporation distributes a dividend the (Points : 5) most common form of distribution is a cash dividend. Dividends account will be increased with a credit. Retained Earnings account will be directly increased with a debit. Dividends account will be decreased with a debit. 6. (TCO A, B) Cerner Company showed the following balances at the end of its first year: Cash $5,000 Prepaid insurance 500 Accounts receivable 2,500 What did Cerner Company show as total credits on its trial balance? (Points : 5) $21,500 $21,000 Accounts payable 2,000 Notes payable 3,000 Common stock 1,000 Dividends 500 Revenues 15,000 Expenses 12,500 $20,500 $22,000 7. (TCO B, E) Under the accrual basis of accounting (Points : 5) cash must be received before revenue is recognized. net income is calculated by matching cash outflows against cash inflows. events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles. 8. (TCO A, B) The Village Laundry Company purchased $6,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $3,000 on hand. The adjusting entry that should be made by the company on June 30 is (Points : 5) Debit Laundry Supplies Expense, $3,000; Credit Laundry Supplies, $3,000. Debit Laundry Supplies Expense, $3,500; Credit Laundry Supplies, $3,000. Debit Laundry Supplies, $3,500; Credit Laundry Supplies Expense, $3,500. Debit Laundry Supplies Expense, $3,500; Credit Laundry Supplies, $3,500. 9. (TCO E) A credit sale of $800 is made on April 25, terms 2/10, net/30, on which a return of $50 is granted on April 28. What amount is received as payment in full on May 4? [Show More]

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