2019-02-02T12:05:37+00:00

For questions 1, 2 and 3, XYZ Company shows the following general ledger accounts: • Revenue $2,000,000 • Expenses $1,000,000 • Cash $400,000 • Accounts Receivable $600,000 • Land $2,000,000 • Inventory $1,000,000 • Accounts Payable $500,00

This paper concentrates on the primary theme of For questions 1, 2 and 3, XYZ Company shows the following general ledger accounts: • Revenue $2,000,000 • Expenses $1,000,000 • Cash $400,000 • Accounts Receivable $600,000 • Land $2,000,000 • Inventory $1,000,000 • Accounts Payable $500,00 in which you have to explain and evaluate its intricate aspects in detail. In addition to this, this paper has been reviewed and purchased by most of the students hence; it has been rated 4.8 points on the scale of 5 points. Besides, the price of this paper starts from £ 79. For more details and full access to the paper, please refer to the site.

General Ledger Accounts for XYZ Company

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For questions 1, 2 and 3, XYZ Company shows the following general ledger accounts:

• Revenue $2,000,000
• Expenses $1,000,000
• Cash $400,000
• Accounts Receivable $600,000
• Land $2,000,000
• Inventory $1,000,000
• Accounts Payable $500,000
• Notes Payable $500,000
• Income Tax $400,000
• Capital Stock $1,500,000
• Retained Earnings $2,500,000

1. The quick ratio is:

a. 1.0
b. 2.0
c. 4.0
d. 6.0
e. None of the above
f. Cannot be determined from the information provided

2. Return on equity is:

a. 15%
b. 24%
c. 25%
d. 40%
e. None of the above
f. Cannot be determined from the information provided

3. Working capital is:

a. $400,000
b. $500,000
c. $1,500,000
d. $4,000,000
e. None of the above
f. Cannot be determined from the information provided

4. On the average, a firm has the following characteristics:

• Orders inventory from supplier each 90 days
• Pays for shipments from supplier 30 days after receipt
• Processes shipments received and makes the goods available for sale 15 days after receipt
• Sells goods 50 days after receipt
• Receives payment for good sold 40 days after sale

The cash conversion cycle is:

a. 60 days
b. 70 days
c. 90 days
d. 100 days
e. None of the above
f. Cannot be determined from the information provided

5. Under the terms 3/10, net 30; the implied interest on the trade credit is:

a. 36.00%
b. 54.75%
c. 74.35%
d. 109.50%
e. None of the above
f. Cannot be determined from the information provided

6. Opportunity cost is:

a. The total cost to undertake an opportunity
b. The net of income less cost from undertaking a new project
c. The cost of purchasing the rights or patents to a new process
d. The alternative benefit given up when undertaking a new project
e. All of the above
f. None of the above

7. The principal financial accounting statements are:

a. Income Statement, Balance Sheet, Cash Budget
b. Balance Sheet, Cash Budget, Cash Flow Statement
c. Cash Budget, Cash Flow Statement, Income Statement
d. Cash Flow Statement, Income Statement, Balance Sheet
e. All of the above
f. None of the above

8. In the United States, financial accounting standards are set by the:

a. SEC
b. FASB
c. AICPA
d. GAAP
e. All of the above
f. None of the above

9. The accounting equation can be stated as:

a. Equity = Liabilities - Assets
b. Assets = Liabilities - Equity
c. Liabilities = Assets - Equity
d. Equity = Assets + Liabilities
e. All of the above
f. None of the above

10. Interest received on cash deposited in the company`s bank account should be shown in the cash flow statement in the:

a. Cash flows from operating activities
b. Cash flows from investing activities
c. Cash flows from financing activities
d. Cash flows from miscellaneous activities
e. All of the above
f. None of the above

11. The purchase of a new delivery van using a bank loan would impact:

a. Asset account(s)
b. Liability accounts(s)
c. Expense account(s)
d. Asset and Liability account(s)
e. All of the above
f. Cannot be determined from the information provided

12. The sale of the company`s own stock for cash would impact:

a. Asset accounts(s)
b. Equity accounts(s)
c. Revenue accounts(s)
d. Asset and equity account(s)
e. All of the above
f. None of the above

13. ABC Company receives an order from Barrett Sullivan on March 31st. The order includes a certified check for $1,000 in full payment. The customer will pick up the item on May 1st. ABC has the item in inventory and, on April 15th, puts a note on the item that says "Sold to Barrett Sullivan for pick up on May 1st". Mr. Sullivan does, in fact, pick up the item as agreed. ABC should recognize this revenue in:

a. March
b. April
c. May
d. April or May, depending on consistent management practices
e. Any of the above
f. None of the above

14. A prepaid expense is included in the financial statements in:

a. Assets
b. Liabilities
c. Equity
d. Expenses
e. Any of the above, depending on the circumstances
f. None of the above

15. The Big Clock Company has a P/E ratio of 15, a plowback of 60%, and a dividend payout of 40%. The current price of the stock is $75. The projected annual earnings per share is:

a. $2.00
b. $3.00
c. $4.00
d. $5.00
e. None of the above
f. Answer cannot be determined form the information provided

16. Types of ratios include:

a. Leverage, Profitability, Operating
b. Profitability, Operating, Efficiency
c. Operating, Efficiency, Leverage
d. Efficiency, Leverage, Profitability
e. All of the above
f. None of the above

17. Internal controls should provide all of the following except:

a. Safeguard assets
b. Accurate records
c. Ensure profits
d. Efficiency
e. All of the above
f. None of the above

18. Reasons for earnings management include all of the following except:

a. Maximizing shareholder wealth
b. Meeting internal expectations
c. Meeting external expectations
d. Smoothing earnings
e. All of the above
f. None of the above

19. Under GAAP, allowable methods of recording material bad debt expense does not include:

a. Direct write off
b. Allowance as a percentage of sales
c. Allowance as a percentage of receivables
d. Allowance as a percentage of sales or receivables
e. All of the above
f. None of the above

20. Crystal, Inc. has the following account balances:

• Credit Sales $100,000,000
• Cash Sales $20,000,000
• Unearned Revenue $5,000,000
• Accounts Receivable $10,000,000
• Allowance for Doubtful Accounts $40,000
• Accounts Payable $8,000,000
• Capital Stock $25,000,000

Crystal estimates that it will not collect 2.5% of accounts receivable. Using the percentage of receivables method, Crystal should record bad debt expense in the amount of:

a. $210,000
b. $250,000
c. $2,460,000
d. $2,500,000
e. None of the above
f. Cannot be determined from the information provided

21. Big Box, Inc. had the following transactions:

• January 15: purchased 400 boxes for $5 each
• February 19: sold 250 boxes for $10 each
• March 10: purchased 200 boxes for $6 each
• March 31: sold 150 boxes for $12 each

Using the perpetual LIFO method of inventory valuation, the value of the ending inventory on March 31 is:

a. $1,000
b. $1,050
c. $1,100
d. $1,200
e. None of the above
f. Cannot be determined from the information provided

22. A pension plan that guarantees a specific amount is called a:

a. Defined contribution plan
b. Defined payment plan
c. Defined benefit plan
d. Guaranteed payment plan
e. All of the above
f. None of the above

23. Big Bob`s Tutus sells tutus for $25 each. Big Bob has monthly fixed costs of $30,000 and it costs Bob $10 each to produce a tutu. To break even each month, the number of tutus that Big Bob must sell is:

a. 1,200
b. 1,500
c. 2,000
d. 3,000
e. None of the above
f. Cannot be determined from the information provided

24. When deciding on capital budgeting decisions with limited capital, the best method to rank potential opportunities is the:

a. Profitability Index
b. Internal Rate of Return
c. Modified IRR
d. Payback
e. All of the above
f. None of the above

25. Golfing, Inc. has the following information:

• Revenue $10,000,000
• Gross profit margin 40%
• Beginning inventory $1,200,000
• Ending inventory $800,000

On the average, an item remains in inventory until it is sold for (rounded to the whole day):

a. 37 days
b. 49 days
c. 61 days
d. 73 days
e. None of the above
f. Cannot be determined from the information provided


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