Reference no: EM1315842

Cash flows statements, types of activities, vertical analysis of statements, Price earnings ratio and Basic accounting equation.

1.  Cash receipts from interest and dividends are classified as

a.         financing activities.

b.        investing activities.

c.         operating activities.

d.        either financing or investing activities.

2. When equipment is sold for cash, the amount received is reflected as a cash

a.         inflow in the operating section.

b.        inflow in the financing section.

c.         inflow in the investing section.

d.        outflow in the operating section.

 3.  Assume the following sales data for a company:

  2003    $1,200,000

  2002    960,000
  2001    840,000 
  2000    600,000
  If 2000 is the base year, what is the percentage increase in sales from 2000 to 2002? 

a.         100%

b.        160%

c.         70%

d.        60.0%

4.  In performing a vertical analysis, the base for cost of goods sold is

a.         total selling expenses.

b.        net sales.

c.         total revenues.

d.        total expenses.

5.  Terry Corporation's price-earnings ratio is

a.         3.8 times.

b.        15 times.

c.         18.8 times.

d.        6 times.

6.  The Securities and Exchange Commission has the authority to establish generally accepted accounting principles for

a.         all businesses.

b.        all corporations.

c.         corporations whose stock is publicly owned.

d.        only partnerships.

7.  An incomplete balance sheet for Software Square Company is presented below:

Software Square Company Balance Sheet March 31, 2002
Assets	Liabilities and Stockholders\\' Equity
Cash	$ ?
Notes payable	$45,000
Accounts receivable	10,000
Building	50,000
Stockholders' equity
Capital stock	$ ?
Retained earnings	11,000

If the firm issued capital stock for cash in the amount of $70,000, then the cash on hand must be :

a.         $65,000

b.        $66,000

c.         $70,000

d.        $115,000

e.         Cannot be determined from the above information.

8. Kenny Tieg Corporation had total assets of $200,000 and stockholders' equity of $104,000 at the beginning of the year. During the year, assets increased by $26,000 and liabilities decreased by $41,000. Stockholders' equity at the year's end totaled:

a.         $185,000

b.        $171,000

c.         $169,000

d.        $89,000

e.         $67,000

9.   The B-Bop Corporation began the current year with assets of $250,000 and liabilities of $170,000. During the year, stockholders' equity increased by $50,000 and liabilities decreased by $20,000. Total assets

a.         increased by $50,000.

b.        increased by $30,000.

c.         increased by $70,000.

d.        decreased by $30,000.

e.         decreased by $70,000.

10.  The following transactions were extracted from the accounting records of Tyvall Corporation: Borrowed $150,000 from a bank. Collected $30,000 from a sale made in March. Sold $35,000 in cash and $65,000 on account. Tyvall's revenues for the month of April were:

a.         $280,000

b.        $215,000

c.         $100,000

d.        $130,000

e.         $245,000