Final Review Questions

Final Review Questions - 2251 W07 Final Exam Review 1. The...

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2251 W07 Final Exam Review 1. The effect of a stock split is to A)reduce the amount of retained earnings and increase total contributed capital. B)reduce the amount of retained earnings and reduce the amount of total assets. C)reduce the amount of retained earnings and reduce total contributed capital. D)reduce the amount of retained earnings and increase the balance in a liability account. E)None of the above is correct. Answer: E 2. A common measure of liquidity is a. return on assets. b. receivable turnover. c. profit margin. d. debt to equity. Answer: b 3. A common measure of profitability is a. the acid test or quick ratio. b. current cash debt coverage ratio. c. return on common stockholders’ equity ratio. d. debt to total assets. Answer: c 4. Which of the following is a cash flow from operating activities? A)Purchase of merchandise for resale. B)Sale of a piece of land no longer used in operations. C)Sale of long-term investments in common stock. D)Payment of a note payable. E)None of the above is correct.
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2251 W07 Final Exam Review Answer: A 5. Creston Company gathered the following data to prepare its 2007 statement of cash flows: Net income $70,000 Depreciation expense 10,000 Accounts receivable decrease 5,000 Wages payable increase 6,000 Amortization of patent 2,000 Income tax payable decrease 4,000 Based only on the above data, the net cash inflow from operating activities during 2007 was A)$83,000. B)$89,000. C)$91,000. D)$97,000. E)None of the above is correct. Answer: B 6. Newton Company reported total sales revenue of $55,000 and total expenses amounting to $45,000 (i.e., net income $10,000) on its income statement for the year ended December 31, 2007. During 2007, accounts receivable decreased by $4,000, merchandise inventory decreased by $6,000, accounts payable increased by $2,000 and depreciation of $8,000 was recorded. Therefore, based only on this information, the net cash flow from operating activities for 2007 was: A) $10,000. B) $18,000.
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C) $19,000. D) $30,000. E) None of the above is correct. Answer: D 7. Treasury Stock is a(n) a. contra asset account. b.contra-equity account. c. asset account. d. expense account. 8. The Dec 31, 2007 balance sheet of the Pioneer Company reports the following : Common Stock – par value $ 0.19 per share, 1,000,000 shares authorized, 50,000 shares issued $ 9,500 Contributed Capital in Excess of par , Common Stock $ 120,500 The common stock was issued at A. $ 0.19 per share B. $ 0.0085 per share C. $ 2.41 per share D. $ 2.60 per share Answer: D 9. A company declares a 2/1 stock split. Which of the
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This note was uploaded on 04/22/2008 for the course ACCT 2251 taught by Professor Lilysieux during the Winter '07 term at CSU East Bay.

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Final Review Questions - 2251 W07 Final Exam Review 1. The...

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