306 chapter 2 take home quiz

306 chapter 2 take - Chapter 2 Take Home Quiz Questions Fall 2009 30 points Answers will be due in class on Tuesday September 22 1 On January 1

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Chapter 2 Take Home Quiz Questions Fall 2009 30 points: Answers will be due in class on Tuesday, September 22. 1. On January 1, 2008, Tuft Company paid $3,600 for a 36-month fire insurance premium. The company has a six-month normal operating cycle. On the company’s December 31, 2008, balance sheet, what amount should be reported for prepaid insurance under current assets? A. $1,800. B. $1,200. C. $ 600. D. $2,400. 2. On Tilt Inc.’s December 31, 2008, balance sheet, a note receivable was properly reported as a noncurrent asset, and its interest receivable for eight months was properly reported as a current asset. Interest on Tilt’s note receivable is received annually. Which of the following terms would fit Tilt’s note receivable? A. Interest on the note receivable is due April 30, 2009. B. The principal of the note is due after December 31, 2009. C. A and B. D. Neither A nor B. 3. A firm using straight-line depreciation reported the following information: Cost of fixed assets as of December 31, 2008, $80 million; Accumulated depreciation as of December 31, 2008, $45 million; Depreciation expense for 2008 of $5 million. The average age of the fixed assets is: A. 7 years. B. 9 years. C. 15 years. D. 16 years. 4. Refer to the previous question. What is the average depreciable life of the fixed assets? A. 7 years. B. 9 years. C. 15 years. D. 16 years. 5. Restructuring costs can also be referred to as A. down sizing costs. B. right sizing costs. C. Both A and B. D. Neither A nor B.
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6. On Norbert Inc.'s income statement for the year ended December 31, 2007, net sales were originally reported at $2,760,000. In the annual report that you received from Norbert for the year ended December 31, 2008, you noticed that net sales for 2007 are reported at $2,450,000. As a sophisticated user of financial statements, you determine that, during 2008, Norbert most likely A. Discontinued a component of the business, and the reduction in net sales from $2,760,000 to $2,450,000 represented the net sales of the discontinued component during 2007. B. Reported sales made in 2008 as revenue in 2007 in order to report higher net income in 2007. C. Recognized a restructuring in 2008 and the net sales for 2007 were restated to represent the net sales made by the plants that were not closed. D. Used the cash basis of recognizing sales revenue in 2007 and the accrual basis of recognizing sales revenue in 2008 . E. A or C. 7. Analysts use the tax retention rate when making adjustments to net income for unusual or infrequent items. What is the tax retention rate? A. Statutory tax rate. B. Effective tax rate. C. One minus the statutory tax rate. D. One minus the effective tax rate. 8.
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This note was uploaded on 12/07/2010 for the course ACCY 306 taught by Professor J.r.simon during the Spring '10 term at Northern Illinois University.

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306 chapter 2 take - Chapter 2 Take Home Quiz Questions Fall 2009 30 points Answers will be due in class on Tuesday September 22 1 On January 1

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