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Name_________________________________ AL365 - ACCOUNTING Concordia University Wisconsin STUDY GUIDE / EXTRA CREDIT 1. Which of the following is TRUE

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Name_________________________________ AL365 - ACCOUNTING Concordia University Wisconsin STUDY GUIDE / EXTRA CREDIT 1. Which of the following is TRUE in regards to a limited liability company? a. It is organized as a corporation. b. It can elect to be taxed as a partnership. c. It provides tax and liability advantages to the owners. d. All are correct. 2. When a product is sold, this cost is often called a. cost of goods sold. b. revenue. c. products. d. retained earnings. 3. Fill in the missing amounts of the following balance sheet: Bruce Company Balance Sheet December 31, 2010 Assets Cash $ 3,600 Accounts Receivable 2,700 Supplies a.__________ Inventory 5,000 Equipment 7,500 Land 9,300 Total Assets $30,100 Liabilities Accounts Payable $ Notes Payable Total Liabilities c.__________ Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity $22,800 Total Liabilities and Stockholders' Equity d.__________ 4. The basic financial statements do NOT include the a. income statement. b. tax return. c. balance sheet. d. statement of cash flows. 5. Which of the following accounts is a stockholders' equity account? a. Cash b. Capital Stock c. Prepaid Insurance d. Accounts Payable 6. Declaring and paying cash dividends affects which balance sheet accounts? a. Cash only b. Stockholders' equity only c. Cash and stockholders' equity d. Cash and capital stock 7. Exhibit 2-1 Total Assets Total Liabilities Beginning of the year $100,000 $ 60,000 End of the year $500,000 $325,000
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Refer to Exhibit 2-1. What is net income, assuming no stock was issued and no dividends were paid? a. $215,000 b. $175,000 c. $135,000 d. $40,000 8. Refer to Exhibit 2-1. What is net income, assuming $50,000 of stock was issued and no dividends were paid? a. $110,000 b. $85,000 c. $70,000 d. $200,000 9. Using accrual accounting, revenue is recorded and reported only a. when cash is received without regard to when the services are rendered. b. when the services are rendered without regard to when cash is received. c. when cash is received at the time services are rendered. d. if cash is received after the services are rendered. 10. Unearned rent, representing rent paid for the next six months' occupancy, would be reported on the landlord's balance sheet as a(n) a. asset. b. liability. c. capital stock. d. revenue. 11. The difference between sales and cost of merchandise sold for a merchandising business is a. sales. b. net sales. c. gross sales. d. gross profit. 12. Dig, Inc. had the following merchandise transactions in October: Purchases $50,000 Purchase returns $ 4,000 Purchase discounts $ 1,000 Transportation in $ 2,000 What is the total cost of merchandise purchased for Dig, Inc.? a. $50,000 b. $47,000 c. $52,000 d. $48,000 Deana, Inc. Deana, Inc. purchased merchandise for $500,000, received credit for purchase returns of $25,000, took purchase discounts of $10,000, and paid transportation in of $20,000. 13. Refer to Deana, Inc. If Deana, Inc. had $20,000 in beginning inventory, and sold goods costing $300,000, what is the ending inventory balance? a. $165,000 b. $240,000 c. $200,000 d. $185,000 14. The Sarbanes-Oxley Act of 2002 requires companies and their independent accountants to a. report on the effectiveness of the company’s internal controls. b. report on any fraud and theft detected in the company. c. report on the state of the economy and likelihood of fraud. d. report on the financial activities of the company. 15. The objectives of internal control are to a. control the internal organization of the accounting department personnel and equipment. b. provide reasonable assurance that assets are safeguarded, information is processed accurately, and
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