Accounting Skills Assessment Test

1 Which statement concerns financial position at a point in time?

Retained Earnings Statement Balance Sheet Income Statement Statement of Cash Flows

2 Outstanding shares if Issued is 50k and Treasury is 4k:

34,000 76,000 46,000 30,000

3 Inventory method matching recent costs with recent revenue:

LIFO FIFO Average Cost Specific Identification

4 Interest on 3-month, 10%, $10k note:

$250 $2,500 $288 $1,000

5 4-for-1 split on 200k shares, $1 par:

$0.25 par; 800k shares $0.25 par; 200k shares $1 par; 50k shares $1 par; 800k shares

6 Paid $35,640 for car incl. 8% tax. Pre-tax price?

$35,640 $32,789 $33,000 $35,355

7 Year 1 up 30%, Year 2 down 25%. Total % change?

(2.5%) decrease 2.5% increase (5.0%) decrease 5.0% increase

8 Assets $84k, Liab $24k, RE $8k. Common Stock?

$76,000 $68,000 $60,000 $52,000

9 Which pair of accounts is increased by recording a credit?

Common Stock / Rent Expense Cash / Accounts Receivable Treasury Stock / Common Stock Notes Payable / Service Revenue

10 A company received cash and issued common stock. Effect on eq?

+ Assets / NE Liab / + Equity NE Assets / NE Liab / NE Equity + Assets / + Liab / NE Equity - Assets / NE Liab / - Equity

11 Purchase of treasury stock effect on equity:

Increase Decrease No effect Cannot determine

12 Classify as current liability:

Bonds Payable Accumulated Depreciation Long-term Notes Payable Wages Payable

13 Primary purpose of Statement of Cash Flows:

Results of operations Financial position Cash receipts and payments Investing/Financing only

14 Ames(80%) Johnson(20%). Smith joins for 25%. Ames share?

80% 70% 55% 60%

15 Invoice $90k, 4% discount. Paid $48k in 10 days. Still owe?

$42,000 $40,000 $43,920 $40,080

16 Declared $0.20 div. Issued 100k, Outstanding 80k. Amount?

$4,000 $16,000 $20,000 $100,000

17 Which error causes trial balance to be out of balance?

Incorrect account debited Forgot to journalize Forgot to post entry Credit posted as a debit

18 Company purchased land by issuing a note payable. Effect?

+ Assets / + Liab / NE Equity + Assets / NE Liab / + Equity NE Assets / + Liab / + Equity + Assets / - Liab / NE Equity

19 Discount on bonds payable reported as:

Deduction from face amount Deduction from RE Asset Addition to face amount

20 Current Assets $2,221,049; Current Liab $718,801. Ratio?

$1,502,248 0.3:1 1.7:1 3.1:1

21 Budget 40% last yr, 30% this yr. % decrease?

25% 10% 12% 33%

22 Magazine company receives advance payment for subscription:

Debit Cash / Credit Sub Revenue Debit Cash / Credit Unearned Sub Revenue Debit Unearned / Credit Cash Debit Prepaid / Credit Cash

23 Cash collected from customer on account. Entry?

Debit AR, Credit Cash Debit Cash, Credit Service Revenue Debit Cash, Credit Accounts Receivable Debit Cash, Credit Accounts Payable

24 Classify as current asset:

Accounts Receivable Accumulated Depreciation Franchises Land Held for Future Use

25 Gross profit equals net sales minus:

Net Income Operating Expenses COGS + Operating Exp Cost of Goods Sold