Reference no: EM1315806

1.  A bank statement

a.         lets a depositor know the financial position of the bank as of a certain date.

b.        is a credit reference letter written by the depositor's bank.

c.         is a bill from the bank for services rendered.

d.        shows the activities that increased or decreased the depositor's account balance.

2.   A check returned by the bank marked "NSF" means

a.         no service fee.

b.        no signature found.

c.         not satisfactorily filled out.

d.        not sufficient funds.

3.  A bank reconciliation should be prepared

a.         whenever the bank refuses to lend the company money.

b.        when an employee is suspected of fraud.

c.         to explain any difference between the depositor's balance per books with the balance per bank.

d.        by the person who is authorized to sign checks.

4.  Rhoden Company wrote checks totaling $17,080 during October and $18,650 during November. $16,240 of these checks cleared the bank in October, and $18,220 cleared the bank in November. What was the amount of outstanding checks on November 30?

a.         $1,270.

b.        $230.

c.         $610.

d.        $1,980.

5.  Which of the following is not a basic principle of cash management?

a.         Increase collection of receivables

b.        Keep inventory levels low

c.         Pay all liabilities early

d.        Invest idle cash

6.  Which one of the following would be classified as an extraordinary item?

a.         Expropriation of property by a foreign government

b.        Losses attributed to a labor strike

c.         Write-down of inventories

d.        Gains or losses from sales of equipment

7.  Which one of the following is not a tool in financial statement analysis?

a.         Horizontal analysis

b.        Circular analysis

c.         Vertical analysis

d.        Ratio analysis

8.  Under which of the following cases may a percentage change be computed?

a.         The trend of the amounts is decreasing but all amounts are positive.

b.        There is no amount in the base year.

c.         There is a negative amount in the base year and a negative amount in the subsequent year.

d.        There is a negative amount in the base year and a positive amount in the subsequent year.

9.  Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time

a.         that has been arranged from the highest number to the lowest number.

b.        that has been arranged from the lowest number to the highest number.

c.         to determine which items are in error.

d.        to determine the amount and/or percentage increase or decrease that has taken place.

10.  Horizontal analysis is a technique for evaluating financial statement data

a.         within a period of time.

b.        over a period of time.

c.         on a certain date.

d.        as it may appear in the future.