Sample Test - HCC Learning Web

Class:
Name:
Date:
ID: A
SampleTest3-910Ll.12
Multiple Choice
Identifi the choice that best completesthe statementor answersthe question.
1. On June8, Alton Co. issuedan $80,000,6%o,120-daynote payableon an overdueaccountpayableto Seller
Co. Assumethat the fiscal year of Alton Co. endsJune30. Which of the following relationshipsis true?
a. Alton is the creditor and creditsAccountsReceivable
b. Seller is the creditor and debitsAccountsReceivable
c. Seller is the borrower and creditsAccountsPayable
d. Alton is the borrower and debitsAccountsPayable
2. Mobile Co. issueda $45,000,60-day,discountednote to GuaranteeBank. The discountrate is 6%. At
maturity,the borrower will pay:
a. $45,450
b. $42,300
c. $45,000
d. $44,550
3 . Thej ournal entry a companyusesto recordthe issuanceof a discountednote for the purposeof borrowing
funds for the businessis
a. debit Cashand InterestExpense;credit Notes Payable
b. debit Cashand InterestPayable;credit Notes Payable
c. debit AccountsPayable;credit Notes Payable
d. debit Notes Payable;credit Cash
4. The total payroll of a businessis usually significantfor all the reasonsbelow exceDt
a. employeesare sensitiveto payroll errorsand irregularities
b. payroll is subject to various federal and stateregulations
find it difficult to developand maintaingood internal controls on the payroll
c. businesses
system
d. payroll and relatedpayrolltaxes have a significanteffect on the net income of most
businesses
5. Which statementbelow is not a determinatein calculatingthe amountof federal incometaxeswithheld from
an individualspay?
a. filing status
b. types of earnings
c. grosspay
d. numberof exemptions
6. Which of the following would be usedto computethe federalincometaxesto be withheld from an
employee'searnings?
a. FICA tax rate
b. wage and tax statement
c. FUTA tax rate
d. wage bracketand withholding table
ID: A
Name:
7. For which of the following taxes is thereno ceiling on the amountof employeeannualearningssubjectto the
tax?
a. only Social Securitytax
b. only Medicaretax
c. only unemploymentcompensationtax
d. none ofthe above
8. An employeereceivesan hourly rate of $30, with time and a half for all hours worked in excessof 40 during
a week. Payroll data for the current week are as follows: hours worked,46; federalincometax withheld,
$300; cumulativeearningsfor year prior to currentweek, $90,700;social securitytax rate, 6.IYoon
maximum of $100,000;and Medicaretax rate,l.5o/oon all earnings. What is the net amountto be paid the
employee?
a. $1,470
b. $1,059.75
c. $1,381.80
d. $1,249.50
9. Payrolltaxesleviedagainstemployeesbecomeliabilities
a. the first of the following month
b. at the time the payroll is paid
c. when earnedby the employee
d. at the end ofan accountingperiod
10. Which of the following are included in the employer'spayroll taxes?
a. SUTA taxes
b. FUTA taxes
c. FICA taxes
d. all ofthe above
11. Eachyear there is a ceiling for the amountthat is subjectto all of the following except
a. Social securitytax
b. Federalincometax
c. federalunemploymenttax
d. stateunemploymenttax
12. Most employersare levied a tax on payrolls for
a. salestax
b. medical insurancepremiums
c. federalunemploymentcompensationtax
d. union dues
13. Payroll entriesare madewith data from the
a. wage and tax statement
b. employee'searningrecord
c. employer'squarterlyfederaltax return
d. payroll register
ID: A
Name:
14. The employeeearningsrecord would containwhich column that the payroll registerwould probablynot
contain?
a. deductions
b. payment
c. earnings
d. cumulativeearnings
15. The following totals for the month of Junewere taken from the payroll registerof Arcon Company:
Salariesexpense
Socialsecurityand Medicare Taxeswithheld
IncomeTaxeswithheld
RetirementSavinss
$13,000
975
2,600
500
Salariessubjectto federal and stateunemployment
taxesof6.2 percent
4,000
The entry to recordthe accrualof employer'spayrolltaxes would include a
a. debit to Payroll TaxesExpensefor $1,223
b. creditto SocialSecurityand MedicareTax Payablefor $1,950
c. debit to Payroll Taxes Expensefor $248
d. Debit to Payroll Tax Expensefor $975
16. The following totals for the month of April were takenfrom the payroll registerof Magnum Company.
$ I 0,000
Salaries
850
FICA taxeswithheld
2,000
Incometaxeswithheld
450
Medical insurancedeductions
420
Unemployment Taxes
The entry to record accrualof employer'spayroll taxeswould include a
a. debitto PayrollTax Expensefor $1,270.
b. credit to FICA Taxes Payablefor $ 1,700.
c. credit to Payroll Tax Expensefor $420.
d. debitto PayrollTax Expensefor $2,120.
17. Assumethat social securitytaxesare payableat a 6ohrate on the first $ 100,000of earningsand medicare
taxesare payableat a 1.5Yorate with no maximum earnings,and that federaland stateunemployment
compensationtaxes total4.6%oon the first $7,000of earnings. If an employee,GeorgeJones,earns$2,500
earningsbeforethis week were $6,800,what is the total payroll
for the currentweek and Jones'year-to-date
taxesrelatedto the current week?
a. $187.50
b . $1 9 6 . 7 0
c. $344.50
d. noneofthe above
ID: A
Name:
18. A disadvantageofthe corporateform ofbusinessentity is
a. mutual agencyfor stockholders
b. unlimited liability for stockholders
c. corporationsare subjectto more governmentalregulations
d. the easeof transferof ownership
19. Which one of the following would no! be consideredan advantageof the corporateform of organization?
a. Governmentregulation
b. Separatelegal existence
c. Continuouslife
d. Limited liability of stockholders
20. The ability of a corporationto obtain capital is
a. lessthan a partnership.
b. aboutthe sameas a partnership.
c. restrictedbecauseof the limited life of the corporation.
d. enhancedbecauseof limited liability and easeof sharetransferability.
sectionof the
21. Which of the following accountsbelow is reportedin the paid-in capital/stockholders'equity
corporatebalancesheet?
a. Cash
b. StockDividends
c. OrganizationalExpenses
d. PreferredStock
22. Menitt Companyacquireda building valuedat $190,000for propertytax purposesin exchangefor 12,000
sharesof its $5 par common stock. The stock is widely tradedand selling for $ 15 per share.At what amount
shouldthe building be recordedby Menitt Company?
a. $60,000
b . $1 8 0 , 0 0 0
c. $ 190,000
d. $10,000
23. The authorizedstock ofa corporation
a. must be recordedin a formal accountingentry.
b. only reflectsthe initial capital needsof the company.
c. is indicatedin its by-laws.
d. is indicatedin its charter.
24. If commonstock is issuedfor an amountgreaterthan par value,the excessshouldbe creditedto
a. RetainedEarninss.
b. Cash.
c. Legal Capital.
d. Paid-in Capital in Excessof Par Value.
ID: A
Name:
25. Nexis Corp. issues1,000sharesof $ 15 par value commonstock at $25 per share. When the transactionis
recorded,creditsare madeto:
a. CommonStock$15,000and Paid-inCapitalin Excessof Par Value $10,000,
b. CommonStock$25,000and RetainedEarnings$15,000.
c. CommonStock$15,000and Paid-inCapitalin Excessof StatedValue $10,000.
d. CommonStock$25,000.
26. On Januaryl, 20xx, SwensonCorporationhad 40,000sharesof $10 par value common stock issuedand
outstanding.All 40,000 shareshad been issuedin a prior period at $20.00per share. On Februaryl,20xx,
Swensonpurchased3,000 sharesoftreasury stock for $21 per shareand later sold the treasurysharesfor $24
per shareon March l, 20xx.
The j ournal entry to record the purchaseof the treasuryshareson February I , 20xx, would includea
a. credit to TreasuryStock for $63,000.
b. debit to TreasuryStock for $63,000.
c. debitto a lossaccountfor $9,000
d. credit to a gain accountfor $9,000.
27. The dateon which a cashdividend becomesa binding legal obligation is on the
a. declarationdate.
b. dateofrecord.
c. paymentdate.
d. last day ofthe fiscal year end.
28. How is treasurystock shown on the balancesheet?
a. as an asset
b. as a decreasein stockholders'equity
c. as an increasein stockholders'equity
d. treasurystock is not shown on the balancesheet
29. The excessofsales price oftreasury stock over its cost shouldbe creditedto
a. TreasuryStock Receivable
b. Premiumon Capital Stock
c. Paid-InCapital from Saleof TreasuryStock
d. lncome from Sale of TreasuryStock
30. A corporationpurchased1,000sharesof its $5 par commonstock at $ 10 and subsequentlysold 500 of the
sharesat $20. What is the amount of revenue realizedfrom the sale?
a. $0
b. $5,000
c. $2,500
d. $10,000
31. In which sectionof the balancesheetwould TreasuryStockbe reported?
a. Fixed assets
b. Long-termliabilities
c. Stockholders'equity
d. Intansibleassets
ID: A
Name:
32. In which sectionof the financial statementswould Paid-InCapital from Saleof TreasuryStockbe reported?
a. other expenseon income statement
b. intangibleasseton balancesheet
c. stockholders'equityon balancesheet
d. other incomeon income statement
sectionof the balancesheet?
33. Which of the following amountsshouldbe disclosedin the stockholders'equity
a. the numberof sharesof common stock outstanding
b. the numberof sharesof common stock issued
c. the numberof sharesof common stock authorized
d. all ofthe above
34. Retainedearnings
a. is the sameas contributedcapital
b. cannothave a debit balance
c. changesare summarizedin the retainedearningsstatement
d. over time will have a direct relationshipwith the amountof cashon hand if the
corporationis profitable
35. Which of the following would result in a credit to retainedearnings?
a. a net loss for the period
of an expensein a prior period
b. an understatement
c.
d.
a stocksplit
of a revenuein the prior period
an understatement
36. Investorswho are most interestedin the dividendyield are thosewho invest for
a. marketprice appreciation
b. currentincome flow
c. both marketprice appreciationand current incomeflow
d. neithermarket price appreciationor currentincomeflow
37. Dividend yield is most often computedon
a. all common stock
b. all preferredstock
c. both common and preferredstock
d. only common stock sold abovepar
38. A corporationhas 50,000 sharesof$28 par value stock outstandingthat has a currentmarketvalue of$150.
If the corporationissuesa 4-for-l stock split, the marketvalue of the stock will fall to approximately
a. $7
b. $112
c. $37.50
d. $600
Name:
ID: A
39. Which of the following statementsis not true about a 2-for-l split?
a. Par value per shareis reducedto half of what it was beforethe split.
b. Total contributedcapital increases.
c. The marketprice will probably decrease.
d. A stockholderwith ten sharesbeforethe split owns twenty sharesafter the split.
40. A corporationhas 50,000 sharesof $25 par value stock outstandingthat has a currentmarketvalue of $150.
lf the corporationissuesa 5-for-1 stock split, the marketvalue of the stock will fall to approximately:
a. $25
b. no chansed
c. $)
d. $30
41. Which of the following is not one of the four basicfinancial statements?
a. balancesheet
b. statementof cashflows
c. statementof changesin financial position
d. incomestatement
42. A ten-yearbond was issuedat par for $250,000cash. This transactionshouldbe shown on a statementof
cashflows under
a. investingactivities
b. financingactivities
c. noncashinvestingand financing activities
d. operatingactivities
43. The statementof cashflows may be usedby managementto
a. assess
the liquidity of the business
b. assessthe major policy decisionsinvolving investmentsand financing
c. determinedividendpolicy
d. do all ofthe above
44. Cashdividendsof $85,000were declaredduringthe year. Cashdividendspayablewere $10,000and
$15,000at the beginningand end of the year, respectively.The amountof cashfor the paymentof dividends
duringtheyear is
a. $90,000
b. $80,000
c. $95,000
d. $75,000
45. In calculatingcashflows from operatingactivitiesusing the indirect method,a gain on the saleof equipment
is
a. addedto net income.
b. deductedfrom net income.
c. ignoredbecauseit doesnot affect cash.
d. not reportedon a statementof cashflows.
ID: A
SampleTest3 - 9 10 ll 12
AnswerSection
MULTIPLE CHOICE
DIF: Easy
L ANS: D
PTS: 1
NAT: AACSBAnalyticIAICPA FN-Measurement
DIF: Moderate
PTS: I
2. ANS: C
NAT: AACSBAnalyticI AICPA FN-Measurement
DIF: Easv
PTS: I
3. ANS: A
NAT: AACSBAnalyticI AICPA FN-Measurement
DIF: Easv
PTS: I
4. ANS: C
NAT: AACSBAnalyticI AICPA FN-Measurement
DIF: Easy
PTS: 1
5. ANS: B
NAT: AACSBAnalyticIAICPA BB-Legal
DIF: Easv
PTS: I
6. ANS: D
NAT: AACSBAnalyticIAICPA BB-Legal
DIF: Easv
PTS: I
7. ANS: B
NAT: AACSBAnalyticIAICPA BB-Legal
DIF: Moderate
PTS: I
8. ANS: B
NAT: AACSBAnalyticI AICPA FN-Measurement
DIF: Easv
PTS: I
9. ANS: B
NAT: AACSBAnalyticI AICPA FN-Measurement
DIF: Easy
PTS: 1
10. ANS: D
NAT: AACSBAnalyticIAICPA BB-Legal
DIF: Easv
PTS: I
ll. ANS: B
NAT: AACSBAnalyticIAICPA BB-Legal
DIF: Easy
PTS: I
12. ANS: C
NAT: AACSBAnalyticI AICPABB-Legal
DIF: Easy
PTS: I
13. ANS: D
FN-Measurement
AACSB
Analyic
NAT:
IAICPA
DIF: Easy
PTS: I
14. ANS: D
NAT: AACSBAnalyticIAICPA FN-Measurement
DIF: Moderate
PTS: I
15. ANS: A
NAT: AACSBAnalyticI AICPA FN-Measurement
DIF: Moderate
PTS: I
16. ANS: A
NAT: AACSBAnalyticIAICPA FN-Measurement
DIF: Moderate
PTS: I
17. ANS: B
NAT: AACSBAnalyticI AICPA FN-Measurement
DIF: EasY
PTS: I
18. ANS: C
BB-Industry
AICPA
NAT: AACSBAnalyticI
DIF: EasY
PTS: I
19. ANS: A
NAT: AACSBAnalyticI AICPA BB-Legal
DIF: EasY
PTS: I
20. ANS: D
NAT: AACSBAnalyticI AICPA BB-Industry
OBJ: 11-01
OBJ: 11-01
OBJ: ll-01
OBJ: 11-02
OBJ: ll-02
OBJ: ll-02
OBJ: 11-02
OBJ: 1l-02
OBJ: ll-02
OBJ: ll-02
OBJ: ll-02
OBJ: 11-02
OBJ: 11-03
OBJ: 11-03
OBJ: 11-03
OBJ: ll-03
OBJ: ll-03
OBJ: 13-01
OBJ: 13-01
OBJ: 13-01
ID: A
21. ANS: D
PTS: I
DIF: Easy
NAT: AACSBAnalyticI AICPA FN-Measurement
22. ANS: B
PTS: 1
DIF: Easy
NAT: AACSBAnalyticI AICPA FN-Measurement
23. ANS: D
PTS: I
DIF: Easy
NAT: AACSBAnalyticIAICPA BB-Legal
24. ANS: D
PTS: I
DIF: Easy
NAT: AACSBAnalyticI AICPA FN-Measurement
25. ANS: A
PTS: 1
DIF: Easy
NAT: AACSBAnalyticIAICPA FN-Measurement
26. ANS: B
PTS: I
DIF: Moderate
NAT: AACSBAnalyticI AICPA FN-Measurement
27. ANS: A
PTS: I
DIF: Easy
NAT: AACSBAnalyticIAICPA BB-Legal
28. ANS: B
PTS: I
DIF: Easy
NAT: AACSBAnalyticI AICPA FN-Measurement
29. ANS: C
PTS: I
DIF: Easy
NAT: AACSBAnalyticIAICPA FN-Measurement
DIF: Easy
30. ANS: A
PTS: I
NAT: AACSBAnaly'ticI AICPA FN-Measurement
31. ANS: C
PTS: 1
DIF: Easy
NAT: AACSBAnalyticIAICPA FN-Measurement
DIF: Easy
32. ANS: C
PTS: 1
NAT: AACSBAnalyticIAICPA FN-Measurement
33. ANS: D
PTS: I
DIF: Easy
NAT: AACSBAnalyticIAICPA FN-Measurement
34. ANS: C
PTS: I
DIF: Easy
NAT: AACSBAnalyticIAICPA FN-Measurement
35. ANS: D
PTS: I
DIF: Easy
NAT: AACSBAnalyticI AICPA FN-Measurement
36. ANS: B
PTS: I
DIF: Easy
NAT: AACSBAnalyticIAICPA BB-Industry
DIF: Easy
37. ANS: A
PTS: I
NAT: AACSBAnalyticIAICPA FN-Measurement
38. ANS: C
PTS: 1
DIF: Easy
NAT: AACSBAnalyticIAICPA FN-Measurement
PTS: I
DIF: Moderate
39. ANS: B
NAT: AACSBAnalyticIAICPA FN-Measurement
PTS: I
DIF: Moderate
40. ANS: D
NAT: AACSBAnallic I AICPA FN-Measurement
41. ANS: C
PTS: I
DIF: Easy
NAT: AACSBAnalyticIAICPA FN-Reporting
DIF: Easy
42. ANS: B
PTS: I
NAT: AACSBAnalyticIAICPA FN-Measurement
DIF: Easy
43. ANS: A
PTS: I
NAT: AACSBAnalvticIAICPA FN-Measurement
OBJ: 13-03
OBJ: 13-03
OBJ: 13-03
OBJ: 13-03
OBJ: 13-03
OBJ: 13-03
OBJ: 13-04
OBJ: 13-05
OBJ: 13-05
OBJ: 13-05
OBJ: 13-05
OBJ: 13-05
OBJ: 13-06
OBJ: 13-06
OBJ: 13-06
OBJ: 13-06
OBJ: 13-06
OBJ: 13-07
OBJ: 13-07
OBJ: 13-07
OBJ: 16-01
OBJ: 16-01
OBJ: 16-01
ID: A
44. ANS:
NAT:
45. ANS:
NAT:
PTS: I
DIF: Easy
B
AACSBAnalyticIAICPA FN-Measurement
B
PTS: 1
DIF: Moderate
AACSBAnalvticI AICPAFN-Measurement
OBJ: 16-02
OBJ: 16-02