Business Accounting
Final Exam
Course Introduction
Business Accounting is a foundational course that introduces students to the principles and practices of financial and managerial accounting within a business context. The course covers essential topics such as the accounting cycle, preparation and analysis of financial statements, budgeting, cost analysis, and internal controls. Students learn how to accurately record, classify, and summarize business transactions, as well as interpret financial data to support decision-making processes. By the end of the course, students gain a thorough understanding of how effective accounting practices contribute to organizational performance and strategic planning.
Recommended Textbook
Financial and Managerial Accounting 10th Edition by Belverd E. Needles
Available Study Resources on Quizplus
28 Chapters
4130 Verified Questions
4130 Flashcards
Source URL: https://quizplus.com/study-set/3784
Page 2
Chapter 1: Uses of Accounting Information and the Financial Statements
Available Study Resources on Quizplus for this Chatper
178 Verified Questions
178 Flashcards
Source URL: https://quizplus.com/quiz/75539
Sample Questions
Q1) The corporate officers are responsible for
A)arranging for major bank loans.
B)determining corporate policy.
C)carrying out corporate policy.
D)appointing the board of directors.
Answer: C
Q2) At the beginning of the year,Shannon Company's assets were $150,000 and its stockholders' equity was $100,000.During the year,assets decreased $30,000 and liabilities increased $15,000.What was the stockholders' equity at the end of the year?
Answer: [($150,000 - $30,000)- ($50,000 + $15,000)] = $55,000
Q3) A business using cash to expand by purchasing land and a building is an example of an operating activity.
A)True
B)False
Answer: False
Q4) The account 'Wages Payable' would appear on the income statement.
A)True
B)False
Answer: False
Page 3
To view all questions and flashcards with answers, click on the resource link above.
Chapter 2: Measurement Concepts: Recording Business Transactions
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/75540
Sample Questions
Q1) A debit has an unfavorable effect on an account.
A)True
B)False Answer: False
Q2) Purchase requests and purchase orders are economic events,and as such they affect a company's financial position,and are recognized in the accounting records.
A)True
B)False Answer: False
Q3) In a journal entry,debits are always indented.
A)True
B)False
Answer: False
Q4) Which of the following events does not require a journal entry?
A)Purchase of a one-year insurance policy.
B)Agreement to perform a service at a future date.
C)Payment for a service performed previously.
D)All of these choices.
Answer: B
Page 4
To view all questions and flashcards with answers, click on the resource link above.
Chapter 3: Measuring Business Income: Adjusting the Accounts
Available Study Resources on Quizplus for this Chatper
168 Verified Questions
168 Flashcards
Source URL: https://quizplus.com/quiz/75541
Sample Questions
Q1) Which of the following transactions will result in the recognition of an expense?
A)Interest accrued on a bank loan.
B)The declaration and payment of dividends.
C)Payment on accounts payable.
D)All of these choices.
Answer: A
Q2) A net loss results in a decrease in
A)revenues.
B)expenses.
C)stockholders' equity.
D)liabilities.
Answer: C
Q3) Which of the following transactions results in an increase in revenues?
A)Receipt of accounts receivable.
B)Purchase of inventory.
C)Receipt of principal from a bank loan.
D)Delivery of a service in exchange for future payment.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Foundations of Financial Reporting and the
Classified Balance Sheet
Available Study Resources on Quizplus for this Chatper
128 Verified Questions
128 Flashcards
Source URL: https://quizplus.com/quiz/75542
Sample Questions
Q1) A company with a current ratio of 1.0 is considered more liquid than a company with a current ratio of 2.0.
A)True
B)False
Q2) The Sarbanes-Oxley Act requires a company to guarantee that its financial statements are 100 percent accurate.
A)True
B)False
Q3) Which of the following would not appear in the owner's equity section of a corporation?
A)W.Muller,Capital
B)Retained earnings
C)Additional paid-in capital
D)Common stock
Q4) The return on assets for National Textile is
A)30 percent.
B)150 percent.
C)33-1/3 percent.
D)24 percent.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Accounting for Merchandising Operations
Available Study Resources on Quizplus for this Chatper
175 Verified Questions
175 Flashcards
Source URL: https://quizplus.com/quiz/75543
Sample Questions
Q1) The perpetual inventory system provides an up-to-date amount of inventory on hand.
A)True B)False
Q2) A company would be more likely to know the amount of inventory on hand if it used the periodic inventory system rather than the perpetual inventory system.
A)True B)False
Q3) When the buyer bears the transportation charge,it is called freight-out.
A)True B)False
Q4) Under the perpetual inventory system
A)the cost of each item is recorded in the Merchandise Inventory account when it is purchased.
B)when an inventory item is sold,its cost is transferred to the Cost of Goods Sold account. C)the balance of the Merchandise Inventory account equals the cost of goods on hand.
D)All of these choices.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Inventories
Available Study Resources on Quizplus for this Chatper
162 Verified Questions
162 Flashcards
Source URL: https://quizplus.com/quiz/75544
Sample Questions
Q1) Ending merchandise inventory for LIFO will be the same dollar amount under a periodic inventory system as under a perpetual inventory system.
A)True
B)False
Q2) Which of the following is an inventory valuation method?
A)First-in,first-out
B)Average-cost
C)Lower-of-cost-or-market
D)Perpetual
Q3) A jeweler probably would use which of the following inventory methods?
A)Specific identification
B)FIFO
C)Average-cost
D)LIFO
Q4) The lower-of-cost-or-market rule implies that it is a violation of the conservatism concept to carry inventory at a cost that is in excess of its market value.
A)True
B)False
Q5) Why are cost flow assumptions made when accounting for merchandise inventory?
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Cash and Internal Control
Available Study Resources on Quizplus for this Chatper
141 Verified Questions
141 Flashcards
Source URL: https://quizplus.com/quiz/75545
Sample Questions
Q1) Separation of duties relates to a control activity in the accounting system.
A)True
B)False
Q2) Internal control involves,in part,the protection of a company's assets.
A)True
B)False
Q3) Cash and inventory are very vulnerable to theft.
A)True
B)False
Q4) A purchase order is sent from a company's
A)purchasing department to the supplier.
B)requesting department to the supplier.
C)requesting department to its accounting department.
D)treasurer to the supplier.
Q5) Merchandisers usually end their fiscal year during the peak season.
A)True
B)False
Q6) The use of electronic funds transfers makes check writing unnecessary.
A)True
B)False
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Receivables
Available Study Resources on Quizplus for this Chatper
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/75546
Sample Questions
Q1) A company performs the aging of accounts receivable calculation and arrives at an estimate for uncollectible accounts of $900.If Allowance for Uncollectible Accounts has a debit balance of $200 prior to the year-end adjustment,for how much should the adjustment be journalized?
A)$200
B)$700
C)$900
D)$1,100
Q2) What is the receivables turnover?
A)1.9 times
B)3.1 times
C)3.8 times
D)5 times
Q3) The receivables turnover is expressed as a percentage.
A)True
B)False
Q4) Why should a dishonored note receivable be transferred to an individual account receivable for the debtor?
Q5) Explain the two methods used to estimate uncollectible accounts.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Long-Term Assets
Available Study Resources on Quizplus for this Chatper
227 Verified Questions
227 Flashcards
Source URL: https://quizplus.com/quiz/75547
Sample Questions
Q1) Which of the following would not be debited to the Machinery account?
A)Installation costs
B)Electricity used by the machine
C)Freight charges
D)Cost of trial runs
Q2) Equipment was purchased for $117,000.It had an estimated residual value of $18,000 and has a current carrying value of $75,000.Its depreciable cost must have been
A)$42,000.
B)$99,000.
C)$124,000
D)impossible to determine from the facts given.
Q3) The golden globe used to identify the publisher of a textbook is an example of a A)franchise.
B)patent.
C)trademark.
D)copyright.
Q4) Present two arguments in favor of the use of accelerated depreciation.
Q5) Under what circumstances will a loss be recorded on the sale of equipment,and what effect will the loss have on stockholders' equity?
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Current Liabilities and Fair Value Accounting
Available Study Resources on Quizplus for this Chatper
179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/75548
Sample Questions
Q1) Unearned revenue arises from the acceptance of payment in advance for a service to be performed.
A)True B)False
Q2) Expected obligations arising from programs,such as frequent flyer miles,are usually recorded as a reduction in sales (in a contra-sales account)with a related liability.
A)True B)False
Q3) Hilda wishes to deposit an amount into her savings account that will enable her to withdraw $1,600 per year for the next four years.She should deposit an amount equal to $1,600 multiplied by the
A)present value of a single sum factor.
B)present value of an ordinary annuity factor.
C)future value of a single sum factor.
D)future value of an ordinary annuity factor.
Q4) Only the unused portion of a line of credit is recognized as a liability.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: Long-Term Liabilities
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/75549
Sample Questions
Q1) When a bond issue is converted into common stock,total contributed capital is increased by the fair market value of the bonds converted.
A)True
B)False
Q2) A bond discount is a component of interest cost because it represents the amount in excess of the issue price that a corporation must pay on the maturity date.
A)True
B)False
Q3) Regardless of whether the straight-line method or the effective interest method is used,the carrying value of a term bond issued at a discount will increase continually over the life of the bond.
A)True
B)False
Q4) Notes payable
A)are promissory.
B)involve debt to many creditors.
C)are secured by real property.
D)All of these choices.
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Stockholders Equity
Available Study Resources on Quizplus for this Chatper
193 Verified Questions
193 Flashcards
Source URL: https://quizplus.com/quiz/75550
Sample Questions
Q1) On June 1,20x5,Jomax Corporation had 60,000 shares of $10 par value common stock outstanding.On June 2,20x5,Jomax declared a 40 percent stock dividend to be distributed on July 5,20x5,to shareholders of record on June 15,20x5.What amount of retained earnings should be transferred to contributed capital because of this dividend?
A)None
B)Par value per share multiplied by the number of dividend shares
C)Market value of the stock at the date of distribution multiplied by the number of dividend shares
D)Market value of the stock at the date of declaration multiplied by the number of dividend shares
Q2) Why might someone prefer to invest in a company by purchasing preferred stock rather than common stock?
Q3) Book value per share of stock represents the amount the shareholder will receive per share if the company is sold or liquidated.
A)True
B)False
Q4) Define outstanding stock.
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: The Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/75551
Sample Questions
Q1) When preparing a statement of cash flows using the indirect method,why is depreciation added back to net income within the operating activities section?
Q2) The indirect method of preparing a statement of cash flows
A)eliminates the need for a schedule of noncash investing and financing transactions.
B)provides a different result than the direct method.
C)adjusts net income for changes in current accounts.
D)shows collections from customers rather than the change in Accounts Receivable.
Q3) Payment of dividends would be reflected as a cash outflow in the investing activities section of the statement of cash flows.
A)True
B)False
Q4) For purposes of preparing the statement of cash flows,cash is defined as including both cash and cash equivalents.
A)True
B)False
Q5) Which accounts are analyzed to determine cash flows from financing activities?
To view all questions and flashcards with answers, click on the resource link above.
15
Chapter 14: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
164 Verified Questions
164 Flashcards
Source URL: https://quizplus.com/quiz/75552
Sample Questions
Q1) Interim financial statements are not subject to a full audit by an independent auditor.
A)True
B)False
Q2) The existence of diversified companies makes which of the following very difficult?
A)Comparison with industry norms
B)The preparation of interim financial statements
C)Use of more than one depreciation or inventory method
D)The compilation of segment information
Q3) In a common-size income statement,each item is expressed as a percentage of net income.
A)True
B)False
Q4) What is the inventory turnover for this corporation? Round your answer to one decimal place.
A)1.2 times
B)1.6 times
C)2.4 times
D)4.0 times
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: Managerial Accounting and Cost Concepts
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/75553
Sample Questions
Q1) The overriding goal of a business is to increase the value of the stakeholders' interest in the business.
A)True B)False
Q2) The cost of goods manufactured is added to the beginning balance of finished goods inventory to obtain the total cost of goods available for sale.
A)True B)False
Q3) Variable costs per unit change in an inversely proportional rate to changes in volume.
A)True
B)False
Q4) Indirect product costs incurred are charged directly to the Cost of Goods Sold account.
A)True B)False
Q5) Management accounting data must be expressed in historical dollars.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Costing Systems: Job Order Costing
Available Study Resources on Quizplus for this Chatper
121 Verified Questions
121 Flashcards
Source URL: https://quizplus.com/quiz/75554
Sample Questions
Q1) When Smith Builder's Designer House #201 is completed,Smith's
A)Work in Process Inventory is increased.
B)total assets are increased.
C)Work in Process Inventory is decreased.
D)total assets are decreased.
Q2) Which of the following will help mangers set reasonable selling prices?
A)Previous year net income of the company
B)Number of employees in the company
C)Unit cost knowledge of the product
D)Previous year's income tax variance
Q3) Service organizations use unit costs of services to determine inventory balances.
A)True
B)False
Q4) A process costing system first assigns the costs to the products manufactured by the departments,and then traces the costs of direct materials,direct labor,and overhead to departments.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Costing Systems: Process Costing
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/75555
Sample Questions
Q1) Stephen Company uses the FIFO method in its process costing system.Beginning inventory in the mixing department consisted of 5,000 units that were 65 percent complete with respect to conversion costs.Ending work in process inventory consisted of 5,000 units that were 70 percent complete with respect to conversion costs.If 12,000 units were transferred to the next processing department during the period,the equivalent units for conversion costs would be
A)13,750 units.
B)12,250 units.
C)10,250 units.
D)13,000 units.
Q2) The equivalent units of production for direct materials and conversion costs,respectively,of Bakersfield were
A)6,200 for direct materials and 6,360 for conversion costs.
B)5,400 for direct materials and 6,520 for conversion costs.
C)6,200 for direct materials and 5,960 for conversion costs.
D)7,000 for direct materials and 6,520 for conversion costs.
Q3) Mention the two cost allocation methods used in a process costing system.
Q4) Describe how the process costing information is used by managers in every stage of the management process.
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Value-Based Systems: Activity-Based Costing and Lean Accounting
Available Study Resources on Quizplus for this Chatper
146 Verified Questions
146 Flashcards
Source URL: https://quizplus.com/quiz/75556
Sample Questions
Q1) Both activity-based management (ABM)and just-in-time (JIT)seek to eliminate or reduce nonvalue-adding activities and to improve the allocation of resources.
A)True
B)False
Q2) In a just-in-time operating environment,the key measure of cost incurred is
A)machine hours.
B)push-through time.
C)throughput time.
D)indirect costs.
Q3) Which of the following is a facility-level cost?
A)Testing products
B)Redesigning the process
C)Maintaining the factory
D)Materials handling
Q4) A non value-adding activity is one that adds cost to a product or service but does not increase its market value.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 20
Q5) When using a just-in-time system,what qualities should be a supplier posses?
Chapter 19: Cost-Volume-Profit Analysis
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/75557
Sample Questions
Q1) To find out the breakeven point in dollars,we divide fixed costs by gross margin ratio.
A)True
B)False
Q2) Which of the following costs is most likely to remain fixed within a relevant range?
A)Indirect labor
B)Property taxes
C)Operating supplies
D)Direct labor
Q3) An organization's normal capacity is the average annual level of operating capacity needed to meet its expected sales demand.
A)True
B)False
Q4) Which of the following statements most accurately explains the behavior of costs?
A)Costs can be fixed,variable,or a combination of both.
B)The majority of costs are variable per unit of production.
C)The majority of costs are fixed per unit of production.
D)Mixed costs are treated as variable costs.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 20: The Budgeting Process
Available Study Resources on Quizplus for this Chatper
113 Verified Questions
113 Flashcards
Source URL: https://quizplus.com/quiz/75558
Sample Questions
Q1) United Insurance Company specializes in term life insurance contracts.Cash collection experience shows that 30 percent of billed premiums are collected in the month before they are due,60 percent are collected in the month they are due,and 6 percent are collected in the month following their due date.Four percent of the billed premiums are collected late (in the second month following their due date).Total billing notices in January were $50,000;in February,$60,000;in March,$66,000;in April,$65,000;in May,$60,000;and in June,$70,000.How much cash does the company expect to collect in May?
A)$63,540
B)$66,750
C)$60,000
D)$56,000
Q2) Which of the following is prepared directly after the cash budget?
A)Overhead budget
B)Production budget
C)Budgeted balance sheet
D)Capital expenditures budget
Q3) The cash budget is derived exclusively from the sales and production budgets.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Flexible Budgets and Performance Analysis
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/75559
Sample Questions
Q1) Cash bonuses are usually given to encourage short-term performance.
A)True
B)False
Q2) What is the actual total cost?
A)$521
B)$595
C)$744
D)$1,031
Q3) The manager of Center D designs,produces,and sells products to external parties.The manager makes both long-term and short-term decisions regarding resources.What type of responsibility center is Center D?
A)Cost center
B)Profit center
C)Revenue center
D)Investment center
Q4) The concern of responsibility accounting is limited to nonmonetary information.
A)True
B)False
Q5) Write a brief note on the performance-based pay.
To view all questions and flashcards with answers, click on the resource link above. Page 23
Chapter 22: Standard Costing and Variance Analysis
Available Study Resources on Quizplus for this Chatper
118 Verified Questions
118 Flashcards
Source URL: https://quizplus.com/quiz/75560
Sample Questions
Q1) Standard costing can be used only with a process costing system.
A)True
B)False
Q2) A direct labor rate variance would occur in which of the following?
A)When a production employee takes an unplanned break
B)When a production employee spends more time producing one product than was expected
C)When a low-paid production employee performs a task higher than his or her assigned level
D)When a production employee incurs overtime hours at the same hourly rate as regular pay
Q3) "A favorable direct materials price variance is always good for a company." Is this statement true? Justify your answer.
Q4) If a company is operating at a capacity below its normal capacity in units,the fixed overhead volume variance will be favorable.
A)True
B)False
Q5) Mention a few reasons for an unfavorable direct labor cost variance.
To view all questions and flashcards with answers, click on the resource link above. Page 24
Chapter 23: Short-Run Decision Analysis
Available Study Resources on Quizplus for this Chatper
128 Verified Questions
128 Flashcards
Source URL: https://quizplus.com/quiz/75561
Sample Questions
Q1) Smith Company is conducting a sales mix analysis.The second step in this analysis involves which of the following formulas?
A)Contribution Margin per Unit = Selling Price per Unit - Variable Costs per Unit
B)Contribution Margin per Unit = Selling Price per Unit - Fixed Costs per Unit
C)Contribution Margin per Unit of Constrained Resources = Contribution Margin per Unit ¸ Quantity of the Constrained Resource Required per Unit
D)Contribution Margin per Unit of Constrained Resources = Contribution Margin per Unit ´ Quantity of the Constrained Resource Required per Unit
Q2) Relative to making a segment profitability (keep-or-drop)decision,explain which costs are avoidable costs and which costs are unavoidable.
Q3) Information that is the same for all alternatives is considered relevant to the decision process.
A)True
B)False
Q4) "Variable costs are relevant and fixed costs are irrelevant." Explain why you agree or disagree with this statement.
To view all questions and flashcards with answers, click on the resource link above.
Page 25
Chapter 24: Capital Investment Analysis
Available Study Resources on Quizplus for this Chatper
106 Verified Questions
106 Flashcards
Source URL: https://quizplus.com/quiz/75562
Sample Questions
Q1) The most beneficial projects are the ones with the highest net present value.
A)True
B)False
Q2) The accounting rate-of-return method is a precise but difficult way to measure the performance of a capital investment.
A)True
B)False
Q3) Projected cash flows could vary each year of an asset's life.
A)True
B)False
Q4) An organization with several branches of a highly developed system for capital investment analysis requires that all proposals go through preliminary screening.
A)True
B)False
Q5) The proposals with the highest ranking are funded first in capital investment decisions.
A)True
B)False
Q6) In what situations is the payback period method especially useful?
To view all questions and flashcards with answers, click on the resource link above. Page 26
Chapter 25: Pricing Decisions, including Target Costing and Transfer Pricing
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/75563
Sample Questions
Q1) When gross margin pricing is used,the markup percentage includes
A)desired profits plus total selling,general,and administrative expenses.
B)only the desired profit factor.
C)total costs and expenses.
D)desired profits plus total fixed production costs plus total selling,general,and administrative expenses.
Q2) Return on assets pricing is based on the estimated number of units to be sold.
A)True
B)False
Q3) When using a cost-based approach,once the cost of a good or service has been determined,additional factors need not be considered in establishing a selling price. A)True
B)False
Q4) Gross margin is the difference between sales and the total production costs of those sales.
A)True
B)False
Q5) Explain how target costing differs from traditional cost-based pricing methods.
Q6) What are the four pricing rules managers must follow to stay in business?
To view all questions and flashcards with answers, click on the resource link above. Page 27
Chapter 26: Quality Management and Measurement
Available Study Resources on Quizplus for this Chatper
101 Verified Questions
101 Flashcards
Source URL: https://quizplus.com/quiz/75564
Sample Questions
Q1) What are the three steps managers take to create a TQM environment?
Q2) Name and describe one respected technique made popular by Six Sigma that allows managers to understand and measure quality improvements.
Q3) Which of the following is a good indicator of management's strong commitment to product quality?
A)Product recalls increased as a percentage of sales
B)Nonconformance costs increased as a percentage of total quality costs
C)Customer service costs reduced by 70 percent over the previous year
D)High costs of conformance to quality
Q4) Nonfinancial measures of quality might include
A)percentage of defect-free materials.
B)product defects per thousand units produced.
C)number of customer complaints.
D)all of these options.
Q5) Describe how MIS aids in the evaluating stage of the management process.
Q6) Warranty claims are an example of internal failure costs of nonconformance to customer standards.
A)True
B)False
Page 28
To view all questions and flashcards with answers, click on the resource link above.
Chapter 27: Accounting for Unincorporated Businesses
Available Study Resources on Quizplus for this Chatper
106 Verified Questions
106 Flashcards
Source URL: https://quizplus.com/quiz/75537
Sample Questions
Q1) Chelsea,Jack,and Connor have a partnership.Chelsea wishes to withdraw from the partnership by removing assets that are greater than her current capital balance.Discuss who,if anyone,receives a bonus.
Q2) Leah,Cameron,and Ryan each receive a $20,000 salary,as well as 10 percent interest on their respective average investments of $120,000,$200,000,and $40,000.If they share remaining income in a 2:1:3 ratio,respectively,by how much would Cameron's account increase assuming net income of $144,000.
Q3) Discuss how each of the following would be recorded in the partner's capital account and why:
a.Trevor invests into the partnership land that he paid $40,000 for 3 years ago.Today,the fair market value of the land is $65,000.
b.Marcela invests into the partnership a building that she paid $24,000 for 2 years ago.The building has a $10,000 mortgage and its fair market value is $18,000.The partnership assumes the mortgage.
c.Courtney invests into the partnership equipment she paid $12,000 for earlier in the year by signing a note payable that the partnership is not assuming.The equipment has a fair market value of $15,000.
Q4) List four advantages and four disadvantages of the partnership form of business.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 28: Accounting for Investments
Available Study Resources on Quizplus for this Chatper
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/75538
Sample Questions
Q1) All of the following are conditions that could affect the valuation of investments on the balance sheet except
A)changes in the general purchasing power of the dollar.
B)changes in the operations of investee companies.
C)changes in the market value or fair value of the investments.
D)changes caused by the passage of time.
Q2) When the cost-adjusted-to-market method is used to account for a long-term investment in the stock of another company,the carrying value of the investment is directly affected by
A)the dividend distributions of the investee.
B)the earnings and dividend distributions of the investee.
C)the earnings of the investee.
D)neither the earnings nor the dividends of the investee.
Q3) Trading securities are valued on the balance sheet at
A)lower of cost or market.
B)cost.
C)market value.
D)cost,adjusted for the effects of interest.
To view all questions and flashcards with answers, click on the resource link above.