1. Casey Company reported net income
of $35,000; depreciation expenses of $20,000; an increase in accounts payable
of $2,000; and an increase in current notes receivable of $3,000. Net cash
flows from operating activities under the indirect method is
A. $56,000.
B. $50,000.
C. $55,000.
D. $54,000
2. What is the rate of return on
equity if net income is $22,700; preferred dividends are $3,000; sales are $100,000;
and average common stockholders’ equity is $86,000?
A. 26.4%
B. 22.7%
C. 86.0%
D. 22.9%
3. Earnings that a stockholder
receives from a corporation are an example of which stockholder right?
A. Vote
B. Liquidation
C. Dividends
D. Preemption

4. What is Jane’s rate of return on
total assets if average total assets are $100,000; net income is $2,000; interest
expense if $1,600; and income tax is $2,000?
A. 5.6%
B. 3.6%
C. 4.6%
D. 5.2%

5. Rick Company has declared a
$40,000 cash dividend to shareholders. The company has 5,000 shares of $20 par,
6% preferred stock, and 10,000 shares of $15 par common stock. The preferred
stock is
cumulative. How much will be distributed
to the preferred and common stockholders on the date of
payment if the preferred stock is
$12,000 in arrears?
A. $18,000 preferred; $22,000
common
B. $6,000 preferred; $34,000 common
C. $20,000 preferred; $20,000 common
D. $40,000 preferred; $0 common

6. The Isaiah Corporation
Stockholders’ Equity section includes the following information:
Total par value of the preferred and
common stock is
Preferred Stock $22,000
Paid-in Capital in Excess of
ParPreferred 2,980
Common Stock 48,000
Paid-in Capital in Excess of
ParCommon 3,400
Retained Earnings 7,350

A. $76,380.
B. $77,350.
C. $70,000.
D. $83,730.

7. What is the rate of return on
common stockholders’ equity if sales are $100,000, net income is $22,700, and
average common stockholders’ equity is $86,000?
A. 86.0%
B. 26.4%
C. The rate of return can’t be
determined from the information given.
D. 22.7%

8. Birch issued 200 shares of $12
par common stock in exchange for a piece of equipment with a current market
value of $3,000. Which of the following is not part of the journal entry for
this transaction?
A. Crediting common stock for $2,400
B. Debiting equipment for $3,000
C. Crediting common stock for
$3,000
D. Crediting paid-in capital in
excess of par common for $600

9. A company has $56,000 in cash;
$12,000 in accounts receivable; $25,000 in short-term investments; and $100,000
in merchandise inventory. The company also has $60,000 in current liabilities.
The company’s quick ratio is
A. 1.550.
B. 3.217.
C. 0.933.
D. 1.133.

10. The accuracy of the statement of
cash flows can be verified by computing the change in the balance of the:
A. cash and cash equivalent
accounts.
B. revenue accounts.
C. equity account.
D. asset and liability accounts.

11. Which section of the income
statement does not report net of income taxes or net of income tax
savings?
A. Continuing operations section
B. Discontinued operations section
C. Extraordinary items section
D. Cumulative effect of changes in
accounting principles section

12. The Amanda Corporation Stockholders’
Equity section includes the following information:
What was the total selling price of
the preferred stock?
Preferred Stock $12,000
Paid-in Capital in Excess of
ParPreferred 2,700
Common Stock 15,000
Paid-in Capital in Excess of
ParCommon 4,100
Retained Earnings 8,200
A. $16,100
B. $12,000
C. $20,200
D. $14,700

13. Patty’s Baker has cost of goods
sold for the years 2011, 2010, and 2009, respectively, of $28,600,
$26,900, and $25,600. If 2009 is the
base year, the trend percentage for 2011 is
A. 105.08%.
B. 11.72%.
C. 5.08%.
D. 111.72%

14. Tammy Corporation has 350,000
shares of $3 par common stock outstanding. It has declared a 5% stock dividend.
The current market price of the common stock is $7.50/share. The amount that
will be credited to common stock on the date of declaration is
A. $52,500.
B. $78,750.
C. $131,250.
D. $183,750.

15. Which activities are computed
differently using the two methods of formatting a statement of cash flows?
A. Investing activities
B. Financing activities
C Both operating activities and
investing activities
D. Operating activities

16. If Rick’s net sales increased
from $40,000 to $80,000 and its operating expenses increased from
$30,000 to $50,000, then vertical
analysis based on net sales would show which of the following for
operating expenses for the two
periods (to the nearest tenth of a percent)?
A. 75.0% and 62.5%
B. 133.3% and 160.0%
C. 160.0% and 133.3%
D. 62.5% and 75.0%

17. Rick Company has declared a
$40,000 cash dividend to shareholders. The company has 5,000 shares of $20 par,
6% preferred stock, and 10,000 shares of $15 par common stock. The preferred
stock is noncumulative. How much will be distributed to the preferred and
common stockholders on the date of payment?
A. $40,000 preferred; $0 common
B. $0 preferred; $40,000 common
C. $6,000 preferred; $34,000
common
D. $34,000 preferred; $6,000 common

18. Operating cash flows affect
A. equity accounts.
B. long-term liability accounts.
C. current assets and current
liabilities.
D. long-term asset accounts.

19. If total assets are $6,000, what
is the common-size figure of cash, assuming that cash has a balance of
$2,400?
A. 40.0%
B. 120.0%
C. 100.0%
D. 60.0%

20. To determine why net income and
cash on the balance sheet don’t equal, an accountant can prepare a/an A. income
statement.
B. balance sheet.
C. statement of cash flows.
D. statement of retained earnings.

1. Casey Company reported net income
of $35,000; depreciation expenses of $20,000; an increase in accounts payable
of $2,000; and an increase in current notes receivable of $3,000. Net cash
flows from operating activities under the indirect method isA. $56,000.B. $50,000.C. $55,000.D. $54,0002. What is the rate of return on
equity if net income is $22,700; preferred dividends are $3,000; sales are $100,000;
and average common stockholders’ equity is $86,000?A. 26.4%B. 22.7%C. 86.0%D. 22.9%3. Earnings that a stockholder
receives from a corporation are an example of which stockholder right?A. VoteB. LiquidationC. DividendsD. Preemption4. What is Jane’s rate of return on
total assets if average total assets are $100,000; net income is $2,000; interest
expense if $1,600; and income tax is $2,000?A. 5.6%B. 3.6%C. 4.6%D. 5.2%5. Rick Company has declared a
$40,000 cash dividend to shareholders. The company has 5,000 shares of $20 par,
6% preferred stock, and 10,000 shares of $15 par common stock. The preferred
stock iscumulative. How much will be distributed
to the preferred and common stockholders on the date ofpayment if the preferred stock is
$12,000 in arrears?A. $18,000 preferred; $22,000
commonB. $6,000 preferred; $34,000 commonC. $20,000 preferred; $20,000 commonD. $40,000 preferred; $0 common6. The Isaiah Corporation
Stockholders’ Equity section includes the following information:Total par value of the preferred and
common stock isPreferred Stock $22,000Paid-in Capital in Excess of
ParPreferred 2,980Common Stock 48,000Paid-in Capital in Excess of
ParCommon 3,400Retained Earnings 7,350A. $76,380.B. $77,350.C. $70,000.D. $83,730.7. What is the rate of return on
common stockholders’ equity if sales are $100,000, net income is $22,700, and
average common stockholders’ equity is $86,000?A. 86.0%B. 26.4%C. The rate of return can’t be
determined from the information given.D. 22.7%8. Birch issued 200 shares of $12
par common stock in exchange for a piece of equipment with a current market
value of $3,000. Which of the following is not part of the journal entry for
this transaction?A. Crediting common stock for $2,400B. Debiting equipment for $3,000C. Crediting common stock for
$3,000D. Crediting paid-in capital in
excess of par common for $6009. A company has $56,000 in cash;
$12,000 in accounts receivable; $25,000 in short-term investments; and $100,000
in merchandise inventory. The company also has $60,000 in current liabilities.
The company’s quick ratio isA. 1.550.B. 3.217.C. 0.933.D. 1.133.10. The accuracy of the statement of
cash flows can be verified by computing the change in the balance of the:A. cash and cash equivalent
accounts.B. revenue accounts.C. equity account.D. asset and liability accounts.11. Which section of the income
statement does not report net of income taxes or net of income taxsavings?A. Continuing operations sectionB. Discontinued operations sectionC. Extraordinary items sectionD. Cumulative effect of changes in
accounting principles section12. The Amanda Corporation Stockholders’
Equity section includes the following information:What was the total selling price of
the preferred stock?Preferred Stock $12,000Paid-in Capital in Excess of
ParPreferred 2,700Common Stock 15,000Paid-in Capital in Excess of
ParCommon 4,100Retained Earnings 8,200A. $16,100B. $12,000C. $20,200D. $14,70013. Patty’s Baker has cost of goods
sold for the years 2011, 2010, and 2009, respectively, of $28,600,$26,900, and $25,600. If 2009 is the
base year, the trend percentage for 2011 isA. 105.08%.B. 11.72%.C. 5.08%.D. 111.72%14. Tammy Corporation has 350,000
shares of $3 par common stock outstanding. It has declared a 5% stock dividend.
The current market price of the common stock is $7.50/share. The amount that
will be credited to common stock on the date of declaration isA. $52,500.B. $78,750.C. $131,250.D. $183,750.15. Which activities are computed
differently using the two methods of formatting a statement of cash flows?A. Investing activitiesB. Financing activitiesC Both operating activities and
investing activitiesD. Operating activities16. If Rick’s net sales increased
from $40,000 to $80,000 and its operating expenses increased from$30,000 to $50,000, then vertical
analysis based on net sales would show which of the following foroperating expenses for the two
periods (to the nearest tenth of a percent)?A. 75.0% and 62.5%B. 133.3% and 160.0%C. 160.0% and 133.3%D. 62.5% and 75.0%17. Rick Company has declared a
$40,000 cash dividend to shareholders. The company has 5,000 shares of $20 par,
6% preferred stock, and 10,000 shares of $15 par common stock. The preferred
stock is noncumulative. How much will be distributed to the preferred and
common stockholders on the date of payment?A. $40,000 preferred; $0 commonB. $0 preferred; $40,000 commonC. $6,000 preferred; $34,000
commonD. $34,000 preferred; $6,000 common18. Operating cash flows affectA. equity accounts.B. long-term liability accounts.C. current assets and current
liabilities.D. long-term asset accounts.19. If total assets are $6,000, what
is the common-size figure of cash, assuming that cash has a balance of$2,400?A. 40.0%B. 120.0%C. 100.0%D. 60.0%20. To determine why net income and
cash on the balance sheet don’t equal, an accountant can prepare a/an A. income
statement.B. balance sheet.C. statement of cash flows.D. statement of retained earnings.