ACC 291- Final Exam

ACC 291- Final Exam

1.  Ordinary repairs are expenses to keep a plant asset functioning properly:


2.  Percentage of receivables method:

Estimated uncollectible accounts = $15,000.

Allowance for Doubtful Accounts = $3,000

What is the amount of bad debts expense?


3. What is true about intangible assets?


4. Intangible assets are the rights and privileges from assets with which characteristic?


5. What is the book value of an asset?


6. Gains experienced on the sale of plant assets should:


7. Percentage of sales method for recording bad debts expense.

Cash sales = $300,000.

Credit sales = $1,200,000.

1% = sales percentage estimated by management.

Enter the correct adjusting entry:


8. Costs to improve the operating efficiency or extend the life of a plant asset are commonly called?


9. What happens to the notes payable account when an interest-bearing note matures?



10. How much interest is charged on a $200,000 note payable with an annual rate of 6%, after 2 months.


11. A large company issues $3,000,000 in bonds that pay 10% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%?


12. A company created a four-year interest-bearing note payable for $300,000 on January 1, 2012. Each January the company is required to pay $75,000 on the note. How will this note be reported on the December 31, 2013 balance sheet?


13. A company has created a $600,000, 10%, 5-year bonds on January 1, 2012 for 648,666, which reflects an effective-interest rate of 8%. Interest is paid semiannually on January 1 and July 1. If the corporation uses the effective-interest method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1, 2011, is


14 What can be expected with the effective-interest method on bond discount amortization?


15.  What do we call it when a corporation has only one type of stock?


16. Capital stock to that has a value assigned on a per share basis is called what?


17. A company has the following:

1,000 shares of 5%, $100 par value,

Cumulative preferred stock and 50,000 shares of $1 par value common stock. Calculate the annual dividend on the preferred stock?


18. Consider a company with the following:

5,000 shares of 5%, $100 par value, noncumulative preferred stock and 20,000 shares of $1 par value common stock. The chairman and CEO declares and pays a $45,000 dividend in 2011. How much in dividends will be received by common stockholders in 2011?


19. What must be done to the books when the selling price of treasury stock is greater than its cost?


20. What happens when treasury stock is purchased?


21. Consider the following company:

Operating expenses = $240,000.

Increase in prepaid expenses = $16,000 during the year.

Accrued liabilities = $24,000 lower than in the previous period. What were the company’s cash payments for operating expenses?


22. Where would the event purchased land for cash show up on the indirect statement of cash flows?


23. What is used as the base cost of goods sold in a vertical analysis?


24. Consider the following income statement:


Net Sales ………………………… $200

Cost of Goods Sold ………………………… 120

Gross Profit ………………………… 80

Operating Expenses ………………………… 44

Net Income ………………………… $ 36


Using vertical analysis, what percentage is assigned to Net Income?


25. A corporation issued 500 shares of no-par common stock for $4,500. Create the necessary journal entry considering $2 per share?


26. A company paid $45,000 to repurchase 9,000 shares of its $1 par value common stock. This stock was then sold at the price of $6 per share. What will be needed in this journal entry?


27.  What is wrong with two people working the same cash register machine?


28. What did the Sarbanes-Oxley Act change for executives?



29. The Sarbanes-Oxley Act makes it a requirement for companies to maintain robust internal control systems. What are internal controls?



30. What is a necessary tool for creating an ethical workplace?