finance quiz

Gagner
Clinic purchases land for $130,000 cash. The clinic assumes $1,500 in property
taxes due on the land. The title and attorney fees totaled $1,000. The clinic
has the land graded for $2,200. What amount does Gagner Clinic record as the
cost for the land?

$130,000

$134,700

$132,200

$132,500

Multiple Choice, Question 65

Hull
Company acquires land for $86,000 cash. Additional costs are as follows:

Removal of shed	$300
Filling and grading	1,500
Salvage value of lumber of shed	120
Broker commission	1,130
Paving of parking lot	10,000
Closing costs	560

Hull
will record the acquisition cost of the land as

$89,610.

$86,000.

$89,370.

$87,690.

Engler
Company purchases a new delivery truck for $45,000. The sales taxes are $3,000.
The logo of the company is painted on the side of the truck for $1,200. The
truck license is $120. The truck undergoes safety testing for $220. What does
Engler record as the cost of the new truck?

$48,000

$49,540

$47,420

	$49,420
Multiple Choice, Question 76

The
balance in the Accumulated Depreciation account represents the

amount
to be deducted from the cost of the plant asset to arrive at its fair market
value.

amount
charged to expense in the current period.

amount
charged to expense since the acquisition of the plant asset.

	cash fund to be used to replace plant assets.
Multiple Choice, Question 217

All
of the following are intangible assetsexcept

goodwill.

research
and development costs.

patents.

	copyrights.
Multiple Choice, Question 218

A
purchased patent has a legal life of 20 years. It should be

amortized
over 20 years regardless of its useful life.

not
amortized.

expensed
in the year of acquisition.

amortized
over its useful life if less than 20 years.

The
asset turnover ratio is computed by dividing

net
sales by ending total assets.

net
income by average total assets.

net
sales by average total assets.

	net income by ending total assets.
Multiple Choice, Question 42

A
current liability is a debt that can reasonably be expected to be paid

within
one year.

out
of currently recognized revenues.

out
of cash currently on hand.

between
6 months and 18 months.

From
a liquidity standpoint, it is more desirable for a company to have current

liabilities
exceed current assets.

assets
exceed current liabilities.

liabilities
exceed long-term liabilities.

assets
equal current liabilities.

Admire
County Bank agrees to lend Givens Brick Company $200,000 on January 1. Givens
Brick Company signs a $200,000, 8%, 9-month note. The entry made by Givens
Brick Company on January 1 to record the proceeds and issuance of the note is

Interest Expense	12,000
Cash	188,000
Notes Payable		200,000

Cash	200,000
Interest Expense	12,000
Notes Payable		200,000
Interest Payable		12,000

Cash	200,000
Notes Payable		200,000

Cash	200,000
Interest Expense	12,000
Notes Payable		212,000

Multiple Choice, Question 54

Admire
County Bank agrees to lend Givens Brick Company $200,000 on January 1. Givens
Brick Company signs a $200,000, 8%, 9-month note. What entry will Givens Brick
Company make to pay off the note and interest at maturity assuming that
interest has been accrued to September 30?

Interest Expense	12,000
Notes Payable	200,000
Cash		212,000

Notes Payable	200,000
Interest Payable	12,000
Cash		212,000

Notes Payable	212,000
Cash		212,000

Interest Payable	8,000
Notes Payable	200,000
Interest Expense	4,000
Cash		212,000

Multiple Choice, Question 67

The
interest charged on a $100,000 note payable, at the rate of 6%, on a 60-day
note would be

$1,500.

$3,333.

$6,000.

	$1,000.
Multiple Choice, Question 86

The
current portion of long-term debt should

not
be separated from the long-term portion of debt.

be
paid immediately.

be
classified as a long-term liability.

be
reclassified as a current liability.

Which
one of the following payroll taxes doesnot result in a payroll tax
expense for the employer?

FICA
tax

Federal
income tax

State
unemployment tax

	Federal unemployment tax
Multiple Choice, Question 38

(n)

limited
liability company.

“S”
corporation.

limited
liability partnership.

	sub-chapter “S” corporation.
Multiple Choice, Question 40

A
general partner in a partnership

is
the partner who lacks a specialization.

has
unlimited liability for all partnership debts.

is
always the general manager of the firm.

	is liable for partnership liabilities only to the extent of that partner’s capital equity.
Multiple Choice, Question 41

The
individual assets invested by a partner in a partnership

revert
back to that partner if the partnership liquidates.

determine
the scope of authority of that partner.

are
jointly owned by all partners.

	determine that partner’s share of net income or loss for the year.
Multiple Choice, Question 48

In
a partnership, mutual agency means

an
act by a partner is judged as binding on other partners depending on whether
the act appears to be appropriate for the partnership.

that
partners must pay taxes on a mutual or combined basis.

each
partner acts on his own behalf when engaging in partnership business.

	the act of any partner is binding on all other partners, only if partners act within their scope of authority.
Multiple Choice, Question 50

The
partner in a limited partnership that has unlimited liability is referred to as
the

unlimited
partner.

lead
partner.

head
partner.

	general partner.
Multiple Choice, Question 51

Limited
partnerships

must
have at least one general partner.

guarantee
that a partner will get back his original investment.

are
limited to only three partners.

	guarantee that a partner will receive a return.
Multiple Choice, Question 52

The
Polen-James partnership is terminated when creditor claims exceed partnership
assets by $40,000. James is a millionaire and Polen has no personal assets.
Polen’s partnership interest is 75% and James’s is 25%. Creditors

may
not require James to use his personal assets to satisfy the $40,000 in
claims.

must
collect their claims equally from Polen and James.

may
collect the entire $40,000 from James.

	must collect their claims 75% from Polen and 25% from James.
Multiple Choice, Question 123

Eberle
and Lankton are partners who share income and losses in the ratio of 3:2,
respectively. On August 31, their capital balances were: Eberle, $175,000 and
Lankton, $150,000. On that date, they agree to admit Newman as a partner with a
one-third capital interest. If Newman invests $125,000 in the partnership, what
is Eberle’s capital balance after Newman’s admittance?

$175,000.

$160,000.

$150,000.

$158,333.

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