University Of Phoenix : ACC 291 Final Exam Guide (New, 2019, 100% Score)

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1.The term "receivables" refers to a) amounts due from individuals or companies. b) cash to be paid to debtors. c) merchandise to be collected from individuals or companies. d) cash to be pa... id to creditors. 2.Three accounting issues associated with accounts receivable are a) depreciating, valuing, and collecting. b) accrual, bad debts, and accelerating collections. c) depreciating, returns, and valuing. d) recognizing, valuing, and accelerating collections. 3.When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when a) management estimates the amount of uncollectibles. b) a customer's account becomes past due. c) a sale is made. d) an account becomes bad and is written off. 4.Which one of the following is not a principle of sound accounts receivable management? a) Delay cash receipts from receivables if necessary. b) Determine a payment period. c) Monitor collections. d) Determine to whom to extend credit. 5.The accounts receivable turnover is computed by dividing a) net credit sales by average receivables. b) net credit sales by ending receivables. c) total sales by ending receivables. d) total sales by average receivables. 6.The accounts receivable turnover is used to analyze a) risk. b) liquidity. c) long-term solvency. d) profitability. 7. The following information is provided for Carla Vista Co. and Flint Corporation: (in $ millions) Carla Vista Co. Flint Corporation Net income 2017 $130 $435 Net sales 2017 1245 4710 Total assets 12/31/15 1045 2000 Total assets 12/31/16 1225 3120 Total assets 12/31/17 1185 4060 What is Flint's return on assets (rounded) for 2017? a) 10.5% b) 10.7% c) 13.9% d) 12.1% 8.Which of the following is not properly classified as property, plant, and equipment? a) Land used in ordinary business operations. b) Land improvement, such as parking lots and fences. c) A truck held for resale by an automobile dealership. d) Building used as a factory. 9.A characteristic of a plant asset is that it is a) held for sale in the ordinary course of the business. b) used in the operations of a business. c) not currently used in the business but held for future use. d) intangible. 10.A current liability is a debt that can reasonably be expected to be paid a) out of currently recognized revenues. b) between 6 months and 18 months. c) within one year, or the operating cycle, whichever is longer. d) out of cash currently on hand. 11. Which of the following most likely would be classified as a current liability? a) Three-year notes payable b) Bonds payable in 5 years c) Mortgage payable as a single payment in 10 years d) Dividends payable 12.The 2017 financial statements of Crane Company contain the following selected data (in millions). Current assets $87 Total assets 171 Current liabilities 54 Total liabilities 62 Cash 5 Interest expense 5 Income taxes 8 Net income 13 The debt to assets ratio (rounded) is a) 2.76%. b) 8.1 times. c) 36.3%. d) 62.1%. 13. In a recent year Ayayai Corp. had net income of $140000, interest expense of $27500, and income tax expense of $37500. What was Ayayai Corp.’s times interest earned (rounded) for the year? a) 6.45 b) 7.45 c) 5.09 d) 6.09 14.If bonds are issued at a discount, it means that the a) financial strength of the issuer is suspect. b) market interest rate is lower than the contractual interest rate. c) market interest rate is higher than the contractual interest rate. d) bondholder will receive effectively less interest than the contractual rate of interest. 15. bonds are issued at a premium, the stated interest rate is a) lower than the market rate of interest. b) too low to attract investors. c) adjusted to a higher rate of interest. d) higher than the market rate of interest. 16. The chief accounting officer in a company is known as the a) vice-president. b) president. c) controller. d) treasurer. 17.Which one of the following would not be considered an advantage of the corporate form of organization? a) Continuous life. b) Limited liability of stockholders. c) Government regulation. d) Separate legal existence. 18. Which of the following would not be true of a privately held corporation? a) It is usually smaller than a publicly held company. b) It is sometimes called a closely held corporation. c) Its shares are regularly traded on the New York Stock Exchange. d) It does not offer its shares for sale to the general public. 19. The following information pertains to Cheyenne Company. Assume that all balance sheet amounts represent average balance figures. Total assets $335000 Stockholders' equity-common 215000 Total stockholders' equity 265000 Sales revenue 107000 Net income 20700 Number of shares of common stock 7000 Common dividends 4800 Preferred dividends 6500 What is Cheyenne's payout ratio? a) 16%. b) 8%. c) 36%. d) 23.19%. 20. Pina Colada Corp. had net income of $120200 and paid dividends of $36500 to common stockholders and $24000 to preferred stockholders in 2017. Pina Colada Corp. common stockholders’ equity at the beginning and end of 2017s was $480000 and $560000, respectively. Pina Colada Corp. return on common stockholders’ equity is a) 18%. b) 14%. c) 23%. d) 19%. 21. The primary purpose of the statement of cash flows is to a) provide information about the investing and financing activities during a period. b) prove that revenues exceed expenses if there is a net income. c) provide information about the cash receipts and cash payments during a period. d) facilitate banking relationships. 22. Which one of the following items is not generally used in preparing a statement of cash flows? a) Additional information. b) Current income statement. c) Adjusted trial balance. d) Comparative balance sheets. 23.The category that is generally considered to be the best measure of a company's ability to continue as a going concern is a) cash flows from financing activities. b) usually different from year to year. c) cash flows from operating activities. d) cash flows from investing activities. 24. Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, a stock dividend declared and issued would be classified on the statement of cash flows. a) Does not represent a cash flow. b) Operating activities section. c) Financing activities section. d) Investing activities section. 25. Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, an inventory increase with cash would be classified on the statement of cash flows. a) Financing activities section. b) Operating activities section. c) Investing activities section. d) Does not represent a cash flow. 26. Free cash flow provides an indication of a company’s ability to a) generate cash to invest in capital expenditures and to pay dividends. b) generate cash to pay dividends. c) generate cash to invest in capital expenditures. d) generate net income. 27. When using the indirect method to compute cash provided by operating activities a) income taxes paid may be ignored. b) amortization expense is added to net income. c) decreases in inventory are subtracted from net income. d) increases in accounts receivable are added to net income. 28. To determine the net cash provided (used) by operating activities, it is necessary to analyze a) the current year's income statement. b) a comparative balance sheet. c) additional information. d) all of these answer choices are correct. 29. Which of these is not a liquidity ratio? a) Accounts receivable turnover b) Asset turnover c) Inventory turnover d) Current ratio 30. The current ratio would be of most interest to a) customers. b) stockholders. c) long-term creditors. d) short-term creditors. [Show More]

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