A100Exam1+Spr105+Spr205+F106+F206+Problems

A100Exam1+Spr105+Spr205+F106+F206+Problems - A100 Exam 1...

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A100 Exam 1 Material from Spring 1 2005, Spring 2 2005, Fall 1 2006, and Fall 2 2006 Exams SOLUTIONS – Some of these have been re-formatted from the original multiple-choice format so that they will be more useful for study/review purposes. 1. Which of the following is a not a Big 4 accounting firm? A) KPMG. B) Ernst & Young. C) Southwest Airlines. D) Deloitte. E) PricewaterhouseCoopers. 2. With respect to the stock markets and the price of a company’s common stock, the most important financial accounting ratio is: A) profit-to-sales ratio (net income/sales). B) gross profit ratio (gross profit/sales). C) debt to equity ratio (total liabilities/total stockholders’ equity). D) current ratio (current assets/current liabilities). E) earnings per share (net income/ number of shares of common stock). 3. When completing the financial statements for a company at the end of an accounting period, the order in which they must be completed is important, and logically related to their purpose. This order is: . 4. The report that a large public company must file with the SEC in the event of a significant event (e.g., hiring/firing a new CEO, entering a new international market, disagreeing with an auditor) is the: . 5. A Corporation was started when a group of people invested $20,000 in it. During the first four years of A Corporation’s existence, it had net income of $20,000 each year, In year five, A Corporation had a net loss of $20,000. During these same years, it paid dividends of $10,000, $15,000, $15,000, $10,000, and $ 0. At the end of year 5, the company’s balance sheet showed total liabilities of $10,000. A Corporation’s total assets at the end of year five were: . 6. As a result of selling inventory to a customer on account, the following numbers would change on a company’s financial statements for that period: A) revenues, current assets, retained earnings, and cash from operating activities. B) gross profit, current assets, and total liabilities. C) gross profit, total assets, and retained earnings. D) revenues, total assets, and cash from investing activities. E) gross profit, current assets, and cash from operating activities. 7. A Company started year x with salaries payable of $10,000, and ended the same year with salaries payable of $15,000. During the year, the company paid salaries of $125,000. The amount of salaries expense the company reported on its income statement for that year was: .
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8. A Company started year x with prepaid rent of $25,000, and ended the same year with prepaid rent of $10,000. During the year, the company paid $125,000 for rent. The amount of rent expense the company reported on its income statement for that year was: . 9. A Company started year x with Dividends Payable of $25,000, and ended the same year with dividends
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A100Exam1+Spr105+Spr205+F106+F206+Problems - A100 Exam 1...

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