Question 1

1. A separate reconciliation must be prepared for each bank account maintained by a business, even if the company maintains two accounts with the same bank.

   True

   False

2 points

Question 2

1. Sales rung on the cash register equaled $980.50. Cash in the drawer totaled $975.00. What entry correctly records this day's sales?

   A.

   Cash	975.00
   Cash Short and Over	5.50
   Sales		980.50

   B.

   Cash	975.00
   Sales		975.00

   C.

   Cash	980.50
   Cash Short and Over		5.50
   Sales		975.00

   D.

   Cash	980.50
   Sales		980.50

2 points

Question 3

1. Each disbursement from the petty cash fund should be supported by a petty cash voucher.

   True

   False

2 points

Question 4

1. The quick ratio is the ratio of quick assets to current liabilities and measures a company's short-term debt-paying ability.

   True

   False

2 points

Question 5

1. A company generally should pay all bills out of cash receipts so as to avoid having to write checks for these items.

   True

   False

2 points

Question 6

1. It is impossible to construct a foolproof system of internal control.

   True

   False

2 points

Question 7

1. Those responsible for safeguarding an asset should also be required to maintain the accounting records for that asset.

   True

   False

2 points

Question 8

1. The use of purchase requisitions, purchase orders, supplier invoices, and receiving reports usually produces benefits greater than their costs.

   True

   False

2 points

Question 9

1. A company should require that at least two signatures appear on each check.

   True

   False

2 points

Question 10

1. At any time, the sum of the cash in the petty cash fund and the total of the petty cash vouchers should equal the total amount for which the petty cash fund was established.

   True

   False

2 points

Question 11

1. One key element in cash control is the immediate recording of cash receipts.

   True

   False

2 points

Question 12

1. Deposits in transit will appear as additions to the company's balance at the bank on the next bank statement.

   True

   False

2 points

Question 13

1. The creation of a petty cash fund requires a journal entry to reflect the transfer of funds out of the general Cash account.

   True

   False

2 points

Question 14

1. The decline in service potential of a plant asset caused by inventions and technology is termed:

   	A.	deterioration.
   	B.	redundancy.
   	C.	inadequacy.
   	D.	obsolescence.

2 points

Question 15

1. Land, since it does not depreciate, is not a plant asset.

   True

   False

2 points

Question 16

1. Depreciation is generally caused by:

   	A.	inadequacy.
   	B.	obsolescence.
   	C.	physical deterioration.
   	D.	All of the above answers are correct.

2 points

Question 17

1. Under the straight-line method of depreciation, the annual depreciation charge is a constant amount.

   True

   False

2 points

Question 18

1. Besides recording the acquisition of a plant asset, entries must be made to record:

   	A.	depreciation.
   	B.	subsequent expenditures.
   	C.	disposal.
   	D.	All of the above answers are correct.

2 points

Question 19

1. The difference between "tangible" assets and "intangible" assets is primarily one of size and value.

   True

   False

2 points

Question 20

1. The units-of-production method of depreciation produces a constant charge per year of depreciation for a plant asset.

   True

   False

2 points

Question 21

1. An estimate of salvage value is not needed to compute depreciation in the first year by which of the following methods?

   	A.	Double-declining balance
   	B.	Sum-of-the-years'-digits
   	C.	Units-of-output
   	D.	Straight-line

2 points

Question 22

1. Under the double-declining balance method, the annual depreciation charge is computed by multiplying the book value of the asset at the beginning of the year by a fixed percentage.

   True

   False

2 points

Question 23

1. A depreciable asset is reported on the balance sheet at:

   	A.	original cost less current year depreciation.
   	B.	original cost adjusted for current market value.
   	C.	original cost less accumulated depreciation.
   	D.	book value adjusted for replacement cost differential.

2 points

Question 24

1. Factors that affect the amount of depreciation expense when using the units-of-production method include the:

   	A.	estimated salvage value.
   	B.	list price when new.
   	C.	book value.
   	D.	fair market value.

2 points

Question 25

1. The service potential of a machine could be measured in terms of hours of operation.

   True

   False

2 points

Question 26

1. In The Profit's Planet PopcornVideo clip,what is the margin for the crepe business?

   	5%
   	25%
   	9%
   	40%

2 points

Question 27

1. In The Profit's Planet PopcornVideo clip,what is Planet Popcorn's most valuable asset?

   	Cash
   	Popcorn
   	Employees
   	Carts

2 points

Question 28

1. In The Profit's Planet PopcornVideo clip,what internal controls did Marcus implement at Planet Popcorn?

   	Add POS System
   	Security Cameras
   	Added Inventory Management system
   	All of the above

2 points

Question 29

1. In The Profit's Planet PopcornVideo clip,which business line does Carla spend 80% of her time on?

   	Popcorn
   	Crepes
   	Funnel Cakes
   	Soda

2 points

Question 30

1. In The Profit's Planet PopcornVideo clip,how much did Planet Popcorn make last year in net income per Marcus' accountant?

   	$319,000
   	$350,000
   	$2.5 million
   	$400,000