On January 1, 2020, Stark Company purchased a new factory for $120,000. The company expects to utilize the factory for the next 20 years before they will require a new one, and estimate that it will have a salvage value of $20,000. Stark Company uses the straight-line method to account for depreciation. What is the adjusting entry required on December 31, 2020, the year-end date, to record any yearly accrued expenses on the factory?

Select one:

a. Dr. Accumulated depreciation $5,000; Cr. Depreciation expense $5,000

b. Dr. Depreciation expense $6,000; Cr. Accumulated depreciation $6,000

c. Dr. Depreciation expense $6,000; Cr. Property, plant & equipment $6,000

d. Dr. Depreciation expense $5,000; Cr. Accumulated depreciation $5,000

2.For your company, office supplies showed a debit balance of $6,800 on the unadjusted trial balance. The company used $3,200 of their office supplies during the fiscal period. What will be the value of office supplies shown in the adjusted trial balance?

Select one:

a. Debit balance of $3,600

b. Debit balance of $10,000

c. Credit balance of $3,600

d. Credit balance of $10,000

3.Trudeau Company provides $2,000 worth of services to customers and will receive payment within 30 days. How should this transaction be recorded?

Select one:

a. Increase cash; decrease accounts receivable

b. Increase accounts receivable; increase revenue

c. Increase cash; increase revenue

d. Increase cash; increase unearned revenue

4.Refer to the following information related to four companies:

Company         Net Credit Sales     Average Accounts Receivable

Company A     $1,000,000             $300,000

Company B     $700,000                $250,000

Company C     $500,000                $100,000

Company D     $1,500,000              $400,000

The company with the least desirable accounts receivable turnover is:

Select one:

a. Company B

b. Company D

c. Company C

d. Company A

5.Szabo Inc. has common stock of $5,500, paid-in surplus of $8,200, total liabilities of $6,600, current assets of $7,200, accounts receivable of $2,000, short-term debt of $2,000, and fixed assets of $16,900. What is the amount of the shareholder's equity?

Select one:

a. $10,300

b. $17,500

c. $13,700

d. $15,600

6.Shareholder's equity is

Select one:

a. the amount of money originally invested in a business by its owners.

b. the profits earned by and reinvested in the company.

c. the value that owners would receive if they sold all of a firm's assets and paid all of its liabilities at book value.

d. a debt owed by a firm to an outside organization or individual.

7.The Steward Company has provided the following information: Operating expenses were $231,000. Cost of goods sold was $376,000. Net Sales were $940,000. Interest expense was $32,000. Gain on sale of a building was $76,000. What was Steward's income from operations?

Select one:

a. $188,000

b. $156,000

c. $301,000

d. $333,000

8.Mackenzie Ltd.'s retained earnings increased $20,000 during 2010. What was Mackenzie's 2010 net income or loss given that Mackenzie declared $25,000 of dividends during 2010? 

Select one:

a. Net Loss of $5,000

b. Net income of $5,000

c. Net income of $45,000

d. Net income was $20,000

9.Which of the following direct effects on the accounting equation isn't possible as a result of a single business transaction which impacts only two accounts?

Select one:

a. An increase in a liability and a decrease in an asset.

b. An increase in an asset and a decrease in an asset.

c. An increase in stockholders' equity and an increase in an asset.

d. An increase in a liability and a decrease in stockholder's equity.

10.If a business records a telephone expense in March but does not pay the bill until June, which of the following is true?

Select one:

a. In June debt decreases and in March equity and cash decrease

b. In March, debt increases, expenses increase and equity does not change

c. In June, debt decreases, expenses increase and equity decreases

d. In March, debt increases, expenses increase and equity decreases

11.Which of the following statements is true?

Select one:

a. Estimated residual value is not used when calculating double-declining depreciation.

b. The annual amount of depreciation is the same for straight line, double declining, and units of production methods of depreciation

c. Cost is equal to residual value when using the units of production method for depreciation

d. When calculating straight line depreciation, residual value is ignored.

12.What is the ratio that measures the relationship between net income and assets or if the company is making enough profit from investment in its total assets?

Select one:

a. Return on Assets

b. Inventory turnover ratio

c. Return on Sales

d. Asset turnover ratio

13.The cost of a patent is

Select one:

a. Held as an asset until the company ceases business

b. Recorded at a nominal amount of $1 until revenue is produced

c. Amortized over the life of the patent

d. Expensed immediately

14.A $5,000 note payable was signed on February 1, 2020 and is due July 31, 2020. Interest is charged at 5% per year and is payable upon maturity. What is the total amount of cash to be paid when the note matures?

Select one:

a. $5,125

b. $5,750

c. $5,000

d. $5,375

15.In a corporation, the interests of shareholders are represented by the:

Select one:

a. Proprietor of the Business

b. Chief Executive Officer

c. Chief Financial Officer

d. Board of Directors

16.The journal entry to record a stock split includes a:

Select one:

a. Debit to cash

b. Credit to retained earnings account

c. Credit to associated shares account

d. None of the available options

17.Margaret bought a $1,000, five-year bond with the coupon rate of 6%. On the purchase date, the market interest rate was 4%. The bond pays interest semi-annually. How much interest would Margaret receive semi-annually?

Select one:

a. $30

b. $20

c. $60

d. $40

18.A bond is sold at a premium when

Select one:

a. The issuing company's most recent financial performance is stronger than the industry average

b. The issuing company's most recent financial performance is weaker than the industry average

c. The market interest rate is below the bond's coupon rate

d. The market interest rate is above the bond's coupon rate

19.In 2020, Giles Inc. had sales revenue of $2,514.4 million and trade receivables of $319.9 million for 2020 and $269.0 million in 2019. What was the cash flow generated by sales?

Select one:

a. $2,514.4 million

b. $2,463.5 million

c. $2,194.5 million

d. $2,565.3 million

20.Hodgkinson Inc. has total debt of $578,462 and a debt-to-equity ratio of .63. What is the value of the total assets?

Select one:

a. $1,496,656

b. $918,194

c. $1,732,246

d. $942,893

Answer rating: 100% (QA)

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