Solved by verified expert :1. In a perpetual inventory system:a. Merchandise Inventory is debited every time inventory is purchasedb. cost of Goods Sold is debited every time inventory is soldc. a physical inventory is taken at least annuallyd. All of the above.2. Under the perpetual inventory system, the purchase of merchandise is recorded by a debit to:a. Merchandise Inventory; credit to Accounts Payable or Cashb. Cost of Goods Sold; credit to Accounts Payablec. Purchases; credit to Accounts Payabled. Accounts Payable; credit to Purchases3. Individual inventory items are tracked in the:a. accounts receivable ledgerb. inventory ledgerc. accounts payable ledgerd. purchases journal4. Which of the following goods should Pin Department Store include in its December 31 count?a. goods held on consignment from ABC Wholesaleb. goods sold and shipped to Gray Brothers, in-transit F.O.B shipping pointc. goods that have been consigned to Dalton Brothersd. goods in transit purchased F.O.B. destination point5. St. Paul Corporation has a normal gross profit of 45%. The current year’s beginning inventory was $2,500, purchases were $9,000, and retail sales were $15,000. The estimated ending inventory under the gross profit method is:a. $4,750b. $3,250c. $8,220d. $4,0506. An overstatement of ending inventory in one period results in:a. an overstatement of net income for the next periodb. no effect on net income for the next periodc. an overstatement of the ending inventory for the next periodd. an understatement of net income for the next period7. The full disclosure principle says that if a change is made:a. the company should disclose the changeb. the effects of the change on profit and inventory valuation should be disclosedc. the company should show justification for the change in a footnote on the financialreportsd. All of the above.8. Costs and assessments that should be charged to the land account include:a. streetsb. parksc. flood preventiond. All of the above.9. Which of the following assets would not be classified as property, plant, and equipment?a. delivery truckb. copyrightc. landd. furniture10. The amount to include in the entry to record the cost of a property, plant, and equipment assetwould include:a. acquisition costb. freightc. installationd. All of the above.11. The depreciation method that does not base the expense on the passage of time but on the level of use is:a. units-of-productionb. straight-linec. modified accelerated cost recoveryd. double-declining-balance12. Which depreciation method does not deduct residual value when computing depreciation expense?a. units-of-productionb. straight-linec. double-declining-balanced. a and b only13. What would be the depreciation expense in year 1, using units-of-production, for a molding machine that cost $18,000, had a useful life of 3 years, and an estimated total machine hoursof 36,000? The salvage value is $3,000 and production in year 1 was 10,000 hours.a. $5,000b. $4,167c. $6,000d. $2,16714. The articles of incorporation are submitted by the incorporators to the:a. IRS for approvalb. Office of the Secretary of State for approvalc. Securities and Exchange Commission for approvald. Governor of the State for approval15. Characteristics of a corporation include:a. stockholders having unlimited liabilityb. direct management by the stockholdersc. stockholders having limited liabilityd. choosing a board of directors16. The entry to record selling 150 shares of no-par common stock with a stated value of $30 for $40 would be to:a. debit Common Stock for $6,000; credit Cash for $6,000b. debit Cash for $6,000; credit Common Stock for $6,000c. debit Cash for $6,000; credit Common Stock for $4,500; credit Paid-In Capital inExcess of Stated Value-Common for $1,500d. debit Cash for $6,000; credit Common Stock for $4,500; credit Paid-In Capital inExcess of Par Value-Common for $1,50017. No entry was recorded for the exchange of stock for land. This error would cause:a. the period end stockholders’ equity to be understatedb. the period end stockholders’ equity to be overstatedc. the period’s net income to be understatedd. a and c only18. Sunrise Online issued 500 shares of its $10 common stock in exchange for equipment with afair market value of $7,500. The entry to record the transaction would include a:a. debit to Equipment for $5,000b. debit to Common Stock for $5,000c. credit to Paid-in Capital in Excess of Par Value for $2,500d. credit to Common Stock Subscribed for $5,00019. Dolly’s Best issued 200 shares of its $10 common stock in exchange for used packaging equipment with a fair market value of $2,400. The entry to record the acquisition of the equipment would include a:a. debit to Equipment for $2,000b. debit to Paid-in Capital in Excess of Par for $400c. credit to Common Stock for $2,400d. debit to Equipment for $2,40020. A statement comparing data from two or more consecutive periods is called a:a. comparative balance sheetb. comparative income statementc. common-size statementd. a and b only21. In a comparative balance sheet, the ending Cash for 2012 was $315,000 and is $270,000 for 2013. The net increase or decrease from 2012 to 2013 is:a. 86.0%b. 14.3%c. 26.4%d. 16.7%22. Liquidity ratios measure:a. how effectively a company is using its equityb. how effectively a company is using its liabilitiesc. a company’s ability to pay shareholdersd. a company’s ability to pay off short-term debts23. Debt management ratios measure:a. how effectively a company is using its cashb. how well a company is using debt versus equity positionc. a company’s ability to earn profitd. a company’s ability to meet payable obligations24. If the average collection period is 35 days, this means:a. from the date of purchase to the date of payment is 35 daysb. from the date of sale to the date of receipt of payment is 35 daysc. from the date of discount to the date of receipt of payment is 35 daysd. None of the above.25. The inventory turnover ratio calculates:a. how many times the inventory turns over in one periodb. number of times inventory is purchased in one periodc. the dollar amount of change in inventory in one periodd. None of the above.
Expert answer:25 Multiple Choice Accounting Questions
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