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10) If the month-end bank statement shows a balance of $36,000, outstanding checks are $12,000, a deposit of $4,000 was in transit at month end, and a check for $500 was erroneously charged by the bank against the account, what is the correct balance in the bank account at month end?
A. $20,500
B. $28,500
C. $43,500
D. $27,500

11) In preparing its bank reconciliation for the month of April 2007, Gregg, Inc. has available the following information:

Balance per bank statement, 4/30/07 $39,140
NSF check returned with 4/30/07 bank statement 450
Deposits in transit, 4/30/07 5,000
Outstanding checks, 4/30/07 5,200
Bank service charges in April 20

What should be the correct balance of cash at April 30, 2007?
A. $38,470
B. $38,490
C. $38,940
D. $39,370

12) Nottingham Corporation had accounts receivable of $100,000 on January 1st The only transactions affecting accounts receivable were sales of $900,000 and cash collections of $850,000. What is the accounts receivable turnover?
A. 9.0
B. 7.2
C. 6.6
D. 6.0

13) Liabilities are
A. obligations arising from past transactions and payable in assets or services in the future.
B. obligations to transfer ownership shares to other entities in the future.
C. deferred credits that are recognized and measured in conformity with generally accepted accounting principles.
D. any accounts having credit balances after closing entries are made.

14) Which of the following items is a current liability?
A. Bonds to be refunded when due in 8 months, there being no doubt about the marketability of the refunding issue
B. Bonds, for which there is an adequate appropriation of retained earnings, due in 11 months
C. Bonds due in 3 years
D. Bonds for which there is an adequate sinking fund properly classified as a long-term investment, due in 3 months

15) Stock dividends distributable should be classified on the
A. balance sheet as an item of stockholders' equity.
B. balance sheet as a liability.
C. balance sheet as an asset.
D. income statement as an expense.

16) A statement of cash flows typically would not disclose the effects of
A. a purchase and immediate retirement of treasury stock.
B. cash dividends paid.
C. stock dividends declared.
D. capital stock issued at an amount greater than par value.

17) To arrive at net cash provided by operating activities, it is necessary to report revenues and expenses on a cash basis. This is done by
A. eliminating all transactions that have no current or future effect on cash, such as depreciation, from the net income computation.
B. eliminating the effects of income statement transactions that did not result in a corresponding increase or decrease in cash.
C. estimating the percentage of income statement transactions that were originally reported on a cash basis and projecting this amount to the entire array of income statement transactions.
D. rerecording all income statement transactions that directly affect cash in a separate cash flow journal.

18) A company borrows $10,000 and signs a 90-day nontrade note payable. In preparing a statement of cash flows (indirect method), this event would be reflected as

A. a cash inflow from financing activities.
B. a cash inflow from investing activities.
C. a cash outflow from investing activities.
D. an addition adjustment to net income in the cash flows from operating activities section.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M926183

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