Fall98Test2

Fall98Test2 - BUSI 071 1. TEST #2 FALL 98 NAME_ SECTION_ Ch...

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BUSI 071 TEST #2 FALL 98 NAME______________ SECTION_____ 1. Net income equals A. Assets – Liabilities B. Liabilities + Owners’ Equity C. Assets + Liabilities D. Increase in Retained Earnings + Dividends E. Revenues + Expenses 2. When the bookkeeper for the Ditka Company made a payment of $700 to a vendor on account, she debited “Cash” for $700 and credited “Accounts Receivable” for $700. Ditka’s correcting entry necessary to properly reflect the transaction would be: A. Accounts Payable 700 Cash 700 B. Cash 1400 Accounts Payable 1400 C. Accounts Receivable 700 Accounts Payable 700 D. Cash 1400 Accounts Payable 700 Accounts Receivable 700 E. Accounts Receivable 700 Accounts Payable 700 Cash 1400 3. The financial statement(s)as of a point in time is/are the A. Balance Sheet B. Income Statement C. Statement of Cash Flows D. All of these E. None of these 4. If working capital is $54,000 and the current ratio is 3, what are current liabilities ? 1. $ 9,000 B. $18,000 C. $ 27,000 D. $81,000 E. $108,000 5. In a bank reconciliation, a deposit in transit is A. Added to the bank statement balance B. Subtracted from the bank statement balance C. Added to the book balance D. Subtracted from the book balance E. Divided by the outstanding checks Ch 1 2 1 13 4
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6. In a bank reconciliation, bank service charges are A. Added to the bank statement balance B. Subtracted from the bank statement balance C. Added to the book balance D. Subtracted from the book balance E. Multiplied times the NSF checks 7. In a bank reconciliation, the difference between a check written by us for $870 but erroneously recorded in the journal for $780 should be A. Added to the bank statement balance B. Subtracted from the bank statement balance C. Added to the book balance D. Subtracted from the book balance E. Ignored until it is canceled 8. The Lebo Company’s policy is to begin and end each month with $20,000 cash on hand. During March, management expects to collect $33,500 from customers and $700 in interest revenue on investments. Expected payments are $24,900 for the purchase of inventory and $7,200 for operating expenses. Debt repayment for March will include $6,400 of principal and $1,500 of interest. Dividends paid in March total $6,000. How much cash will Lebo Company borrow in order to maintain the required $20,000? A. $10,300 B. $11,800 C. $14,800 D. $21,800 E. $46,000 9. The sales discount terms 3/10, n/30 approximate which of the following annual rates? A. 18% B. 24% C. 36% D. 48% E. 54% 10. Unrealized gains or losses on available-for-sale securities are reported on the A. Balance Sheet B. Income Statement C. Statement of Cash Flows D. All of these E. None of these 11. The “Allowance for Uncollectible Accounts” is a(n) 1. adjunct asset B. contra asset C. nominal account D. temporary account E. both of B and D Ch 4 4 4 n/a 10 5
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12. Under the allowance method of accounts receivable, the write-off entry for an account A. reduces net income B. reduces total assets
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This note was uploaded on 03/30/2008 for the course BA 71 taught by Professor Staff during the Summer '07 term at UNC.

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Fall98Test2 - BUSI 071 1. TEST #2 FALL 98 NAME_ SECTION_ Ch...

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