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UO ACTG 211 - Quiz 1

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1. The form of business organization which is easiest to form is a. a partnershipb. a sole proprietorshipc. a corporationd. an LLC2. The advantages of organizing a business as a corporation includea. limited liability to creditorsb. the ability to raise money by selling shares to the publicc. the ability to quickly transfer ownership stakesd. all of the above3. The disadvantages of organizing a business as a partnership may includea. personal liability for partnership debtsb. limited ability to raise capital by offering stockc. limited life (i.e. partnership may end with death of partner)d. all of the above4. Which of the following is an external user of accounting information?a. an executive at a bank which has loaned money to a corporationb. the corporation’s CEOc. an investor considering buying stock in the corporationd. a. and b. onlye. a. and c. onlyf. b. and c. only5. An investor would be able to find all of the following information in the financial statements except:a. the amount of property, plant and equipment owned by a company, at costb. the amount of cash increases and decreases during the year due to financing activitiesc. the amount by which net income was reduced by income tax expensed. the amount of revenue that the company will earn in the upcoming year6. Which of the following is a financing activity?a. spending $3,000 on a new advertising campaignb. taking out a $400,000 line of credit from Bank of Americac. spending $500,000 on a major upgrade to a warehoused. issuing 100,000 shares of common stock at $32 per sharee. both b. and d.7. All of the following describe changes over a period of time except:a. the income statementb. the balance sheetc. the statement of retained earningsd. the statement of cash flows8. Which of the following accounts would not appear on the balance sheet?a. Cost of Goods Soldb. Prepaid insurancec. Retained Earningsd. Unearned revenue9. Herbert Camacho, Inc. had $500,000 total assets, $300,000 total liabilities and $200,000 stockholder’s equity on January 1, 2012. On December 31, 2012, the company had $600,000 total assets, and $300,000 total liabilities. If we know that the company paid a dividend of $50,000 during the year, what was the amount of net income for the year?a. $150,000b. $100,000c. $50,000d. Not enough information to calculate10. On a classified balance sheet, a Note Payable of $3,000,000 due in 5 years should be listed under:a. Current Assetsb. Current Liabilitiesc. Long-term Investmentsd. Long-term Liabilities11. Which of the following is likely to appear on a balance sheet as an intangible asset?a. Accounts Receivableb. Prepaid Rentc. Goodwilld. Swagger12. A creditor trying to determine if a company is likely to pay back a long term loan is most likely to be interested in:a. liquidity ratiosb. solvency ratiosc. profitability ratiosd. none of the above13. Dwayne Elizondo, Inc. has $50,000 Cash, $25,000 Accounts Receivable, $75,000 in Inventories, $20,000 in Accounts Payable, and a $30,000 Note Payable due in 60 days. What are the company’s Working Capital and Current Ratio, respectively?a. $75,000 and 3b. $100,000 and 1/3c. $75,000 and 1/3d. $100,000 and 314. Andrew Wilson and Cooper Manning formed the following business. Use the data below todetermine the total dollar amount of assets to be classified as property, plant, and equipment.Forgotten Brother IndustriesBalance SheetDecember 31, 2012Cash $ 35,000 Accounts payable $ 65,000Accounts receivable 50,000 Salaries and wages payable 10,000Inventory 70,000 Mortgage payable 90,000Prepaid insurance 40,000 Total liabilities $165,000Stock investments 90,000Land 100,000Buildings $120,000 Common stock $130,000Less: Accumulated Retained earnings 250,000 depreciation (30,000) 90,000 Total stockholders’ equity $370,000Trademarks 70,000 Total liabilities and Total assets $545,000 stockholders’ equity $545,000a. $190,000b. $100,000c. $220,000d. $90,00015. Collection of $100 Accounts Receivable from a customer will:a. decrease assets, decrease liabilitiesb. increase assets, increase liabilitiesc. increase assets, decrease assetsd. increase assets, increase stockholder’s equity16. A company purchases $200 of supplies on account. This will affect:a. income statement onlyb. income statement and balance sheetc. income statement, balance sheet, and retained earnings statementd. balance sheet only17. E.P. Worrell, Inc. bills a customer $300 for services performed. The proper journal entry for this transaction will:a. debit accounts receivable, credit unearned revenueb. debit cash, credit service revenuec. debit accounts receivable, credit service revenued. debit cash, credit retained earnings18. Vern Corp. paid an electric bill of $10,000 for the previous month. The proper journal entry for this transaction will:a. debit utilities expense, credit cashb. debit cash, credit utilities expensec. debit retained earnings, credit utility expense payabled. debit accounts payable, credit utilities expense19. A company purchases land for $150,000 and pays in cash. The accountant incorrectly debits land$15,000 and credits cash $150,000. One result of this mistake is that:a. Stockholder’s equity is overstated by $135,000.b. Total Assets are understated by $135,000.c. Land is understated by $135,000, but the accounting equation is still in balance.d. Cash is understated by $150,000.20. Given the following T-Account, what is the balance of Accounts Payable?Accounts Payable200 300100 50a. $50 debit balanceb. $650 credit balancec. $650 credit balanced. $50 credit balanceQuiz 1Name:___________________________________ UO ID:______________________________________Put an X through the best answer:b 1a b c dd 2a b c dd 3a b c de 4a b c d e fd 5a b c de 6a b c d eb 7a b c da 8a b c da 9a b c dd 10a b c dc 11a b c db 12a b c dd 13a b c da 14a b c dc 15a b c dd 16a b c dc 17a b c da 18a b c db 19a b c dd 20a b c


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