University of Utah ACCTG 2600 Chapter 1 Quiz Multiple Choice 1)Which of the following best describes the term "current assets"? a

University of Utah

ACCTG 2600

Chapter 1 Quiz

Multiple Choice

1)Which of the following best describes the term "current assets"?

a.            Assets expected to be converted into cash within one year or one operating cycle, whichever is longer.

b.            The amount of claim that the owners have in the business in the current year.

c.             The amount of total profits earned by a business since it began operations plus all other resources.

d.            The cumulative profits earned by a business less any dividends distributed in the current period.

                                2. Which financial statement would you analyze to assess a firm’s operating performance for the past year?

a.            Balance Sheet

b.            Statement of Retained Earnings c.           Income Statement

d. Statement of Public Accounting

                                3. In which form of organization are the owners' legal responsibility for the debt of the business limited to the amount they invested in the business?

a.            cooperative b. corporation

c.             partnership

d.            proprietorship

Bargain Spot Fabrics

The following balances were taken from the company’s records:

             4. Refer to Bargain Spot Fabrics. What amount should the company report on its Balance Sheet for Total Assets? a. $550,000

b. $775,000 c. $850,000 d.   $950,000

                                5. Refer to Bargain Spot Fabrics. What is the retained earnings balance at the end of the current year?

 a.           $50,000

b.   $550,000

c.             $800,000

d.   $850,000

Bay Camera

The company reported the following items on its financial statements for the year ended December 31, 2013:

Sales      $780,000              Cost of Sales      $700,000

Selling, general & administrative expense            20,000   Other Expense  15,000

Dividends            5,000     Income Tax Expense      12,500

                                6. Refer to Bay Camera. What is the company’s Net Income for the current year? a.        $22,500

b. $32,500 c.       $42,500

d.   $80,000

                                7. If a company has $10,500,000 of revenues, declares and pays $550,000 in dividends, and has net income of

$1,600,000, how much were expenses for the year? a.   $9,950,000

b.   $1,050,000

c.             $2,150,000 d.   $8,900,000

                                8. Which of the following accounts are normally reported as current liabilities on a classified balance sheet?

a.            Accounts Payable and Prepaid Insurance

b.            Interest Payable and Interest Receivable

c.             Income Taxes Payable and Salaries Payable

d.            Capital Stock and Accounts Payable

                                9. Barrett Oil Company reported the following balances as of December 31, 2013:

Accounts Receivable      $125,000              Unearned Revenue        $ 5,000

Cash      150,000 Notes Payable (due in 6 months)              115,000

Land      200,000 Accounts Payable            70,000

Building                400,000 Equipment          165,000

Inventories         105,000 Notes Payable (due 07/01/2020)               600,000

What is the company’s current ratio? a. 0.48 to 1

b. 2.00 to 1 c.      2.55 to 1

d.   2.86 to 1

                  10. On January 1, 2013, a company reported assets of $1,000,000 and liabilities of $600,000. During 2013, assets decreased by $100,000 and Stockholders' Equity decreased $200,000. What is the amount of liabilities at December 31, 2013?

a.            $200,000

b.   $500,000

c.             $600,000 d.   $700,000