(Answered) Accounting Review multiple choice questions

See attached files for proper format and additional questions.;Question 1;Before year-end adjusting entries, Dunn Company's account balances at December 31, 2010, for accounts receivable and the related allowance for uncollectible accounts were $600,000 and $45,000, respectively. An aging of accounts receivable indicated that $62,500 of the December 31 receivables are expected to be uncollectible. The net realizable value of accounts receivable after adjustment is;$582,500.;$555,000.;$492,500.;$537,500.;Question 2;One of the benefits of the statement of cash flows is that it helps users evaluate financial flexibility. Which of the following explanations is a description of financial flexibility?;The firm's ability to pay its debts as they mature.;The firm's ability to invest in a number of projects with different objectives and costs.;The nearness to cash of assets and liabilities.;The firm's ability to respond and adapt to financial adversity and unexpected needs and opportunities;Question 3;Items 65 through 68 apply to the appropriate use of interest tables. Given below are the future value factors for 1 at 8% for one to five periods. Each of the items 65 to 68 is based on 8% interest compounded annually.;Periods Future Value of 1 at 8%;1 1.080;2 1.166;3 1.260;4 1.360;5 1.469;What amount will be in a bank account three years from now if $6,000 is invested each year for four years with the first investment to be made today?;($6,000? 1.260) + ($6,000? 1.166) + ($6,000? 1.080) + $6,000;$6,000? 1.360? 4;($6,000? 1.080) + ($6,000? 1.166) + ($6,000? 1.260) + ($6,000? 1.360);$6,000? 1.080? 4;Question 4;Consider the following: Cash in Bank - checking account of $13,500, Cash on hand of $500, Post-dated checks received totaling $3,500, and Certificates of deposit totaling $124,000. How much should be reported as cash in the balance sheet?;$13,500.;$131,500.;$14,000.;$17,500.;Question 5;Which of the following facts concerning fixed assets should be included in the summary of significant accounting policies?;Depreciation Method Composition;Yes Yes;No Yes;Yes No;No No;Question 6;Which of the following is a method to generate cash from accounts receivable?;Assignment Factoring;No No;No Yes;Yes No;Yes Yes;Question 7;Barkley Company will receive $100,000 in a future year. If the future receipt is discounted at an interest rate of 8%, its present value is $63,017. In how many years is the $100,000 received?;6 years;8 years;7 years;5 years;Question 8;On January 4, 2010, Kiley Co. leased a building to Dodd Corp. for a ten-year term at an annual rental of $75,000. At inception of the lease, Kiley received $300,000 covering the first two years' rent of $150,000 and a security deposit of $150,000. This deposit will not be returned to Dodd upon expiration of the lease but will be applied to payment of rent for the last two years of the lease. What portion of the $300,000 should be shown as a current and long-term liability in Kiley's December 31, 2010 balance sheet?;Current Liability Long-term Liability;$150,000 $150,000;$75,000 $150,000;$150,000 $75,000;$0 $300,000;Question 9;Bella requires $80,000 in four years to purchase a new home. What amount must be invested today in an investment that earns 6% interest, compounded annually?;$63,367.;$100,998.;$65,816.;96,891.;Question 10;For which of the following transactions would the use of the present value of an ordinary annuity concept be appropriate in calculating the present value of the asset obtained or the liability owed at the date of incurrence?;A capital lease is entered into with the initial lease payment due upon the signing of the lease agreement.;A capital lease is entered into with the initial lease payment due one month subsequent to the signing of the lease agreement.;A ten-year 8% bond is issued on January 2 with interest payable semiannually on January 2 and July 1 yielding 9%.;A ten-year 8% bond is issued on January 2 with interest payable semiannually on January 2 and July 1 yielding 7%.;Question 11;A trial balance before adjustments included the following;Debit Credit;Sales $425,000;Sales returns and allowance $14,000;Accounts receivable 43,000;Allowance for doubtful accounts 760;If the estimate of uncollectibles is made by taking 2% of net sales, the amount of the adjustment is;$8,220.;$6,700.;$8,500.;$9,740.;Question 12;On January 15, 2010, Dolan Corp. adopted a plan to accumulate funds for environmental improvements beginning July 1, 2014, at an estimated cost of $4,000,000. Dolan plans to make four equal annual deposits in a fund that will earn interest at 10% compounded annually. The first deposit was made on July 1, 2010. Future value factors are as follows;Future value of 1 at 10% for 5 periods 1.61;Future value of ordinary annuity of 1 at 10% for 4 periods 4.64;Future value of annuity due of 1 at 10% for 4 periods 5.11;Dolan should make four annual deposits of;$782,779.;$862,069.;$1,000,000.;$711,618.;Question 13;AG Inc. made a $10,000 sale on account with the following terms: 1/15, n/30. If the company uses the gross method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale?;Debit Accounts Receivable for $9,900 and Sales Discounts for $100.;Debit Accounts Receivable for $10,000 and Sales Discounts for $100.;Debit Accounts Receivable for $10,000.;Debit Accounts Receivable for $9,900.;Question 14;Kohler Company owns the following investments;Trading securities (fair value) $60,000;Available-for-sale securities (fair value) 35,000;Held-to-maturity securities (amortized cost) 47,000;Kohler will report securities in its long-term investments section of;exactly $142,000.;exactly $107,000.;$82,000 or an amount less than $82,000, depending on the circumstances.;exactly $95,000.;Question 15;Which of the following is not considered cash for financial reporting purposes?;Postdated checks and I.O.U.'s;Coin, currency, and available funds;Petty cash funds and change funds;Money orders, certified checks, and personal checks;Question 16;On December 30, 2010, AGH, Inc. purchased a machine from Grant Corp. in exchange for a zero-interest-bearing note requiring eight payments of $50,000. The first payment was made on December 30, 2010, and the others are due annually on December 30. At date of issuance, the prevailing rate of interest for this type of note was 11%. Present value factors are as follows;Present Value of Ordinary Present Value of;Period Annuity of 1 at 11% Annuity Due of 1 at 11%;7 4.712 5.231;8 5.146 5.712;On AGH's December 31, 2010 balance sheet, the net note payable to Grant is;$261,775.;$235,600.;$285,600.;$257,300.;Question 17;During 2010 the DLD Company had a net income of $50,000. In addition, selected accounts showed the following changes;Accounts Receivable $3,000 increase;Accounts Payable 1,000 increase;Building 4,000 decrease;Depreciation Expense 1,500 increase;Bonds Payable 8,000 increase;What was the amount of cash provided by operating activities?;$49,500.;$50,000.;$51,500.;$59,500.;Question 18;On January 1, 2010, Haley Co. issued ten-year bonds with a face amount of $2,000,000 and a stated interest rate of 8% payable annually on January 1. The bonds were priced to yield 10%. Present value factors are as follows;At 8% At 10%;Present value of 1 for 10 periods 0.463 0.386;Present value of an ordinary annuity of 1 for 10 periods 6.710 6.145;The total issue price of the bonds was;$1,840,000.;$1,960,000.;$1,755,200.;$2,000,000.;Question 19;Why is the allowance method preferred over the direct write-off method of accounting for bad debts?;Improved matching of bad debt expense with revenue.;Estimates are used.;Allowance method is used for tax purposes.;Determining worthless accounts under direct write-off method is difficult to do.;Question 20;The following trial balance of Reese Corp. at December 31, 2010 has been properly adjusted except for the income tax expense adjustment.;Reese Corp.;Trial Balance;December 31, 2010;Dr. Cr.;Cash $ 775,000;Accounts receivable (net) 2,695,000;Inventory 2,085,000;Property, plant, and equipment (net) 7,366,000;Accounts payable and accrued liabilities $ 1,701,000;Income taxes payable 654,000;Deferred
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Accounting Review multiple choice questions

 


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