ACCT 504 Week 8 Final Exam Set 1

ACCT 504 Week 8 Final Exam Set 1

Author: Christine Farr


1. (TCO A) An advantage of the corporate form of business is _____. (Points : 5)
2. (TCO A) Dividends flow through which one of the following statements? (Points : 5)
3. (TCOs A and B) Below is a partial list of account balances for LBJ Company
4. (TCOs B and E) Which of the following statements is correct with regard to accrual accounting? (Points : 5)
5. (TCO D) Which inventory method will result in the lowest income taxes when prices are decreasing? (Points : 5)
6. (TCO A and E) Equipment was purchased for $27,000. Freight charges amounted to $1,000 and there was a cost of $5,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $5,000 salvage value at the end of its 7-year useful life. Depreciation expense each year using the straight-line method will be _____. (Points : 5)
7. (TCOs D and G) When the market rate of interest exceeds the stated rate of interest on the bond, the bond will require _____. (Points : 5)
8. (TCO C) Accounts receivable arising from sales to customers amounted to $75,000 and $90,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $100,000. Based on these transactions, the cash flows from operating activities to be reported on the statement of cash flows would be _____. (Points : 5)
9. (TCO F) A company has Preferred stock, 8%, $10 par, 30,000 shares authorized and issued. The balance in the Preferred Stock account is $300,000. This means that: (Points : 5)
10. (TCO F) When performing a common-size income statement, the 100% figure is _____. (Points : 5)

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