BUS5601 - Essentials of Business Development 1 Term: Fall 1 2011 Student Access: 8.29.2011 12:00 AM EDT - 10.23.

2011 11:59 P M EDT Section: 6 Test Review - CHRISTOPHER CHRISTMON Your test grade is 85% The professor has configured this test to allow students to review: Questions answered incorrectly. Questions answered correctly. Students answers. Correct answers. Question 1 [Question Bank ID: 2363] Type: Multiple Choice Correct Correct The balance sheet might also be called << HIDE ANSWERS Correct A Statement of Financial Position B Statement of Assets C Statement of Change in Financial Position D None of these Question 2 [Question Bank ID: 9599] Type: Multiple Choice Incorrect Incorrect For the fiscal year ended March 31, 2009, a company reported earnings per share of $3.25 and cash dividends per share of $0.50. During fiscal 2010, the company had a 3 for 2 stock split. In the annual report for the fiscal year ended March 31, 2010, earnings per share and cash dividends for fiscal 2009 would be reporte d, respectively, as << HIDE ANSWERS Incorrect A $3.25 and $0.50 B $4.85 and $0.75 Correct C $2.17 and $0.33 D $1.09 and $0.17 Question 3 [Question Bank ID: 61883] Type: Multiple Choice

Correct Correct An individual interested in making a judgment about the profitability of a compa ny should << HIDE ANSWERS A Review the trend of working capital for several years B Calculate the company's ROI for the most recent year Correct C Review the trend of the company's ROI for several years D Compare the company's ROI for the most recent year with the industry average ROI for the most recent year Question 4 [Question Bank ID: 55560] Type: Multiple Choice Correct Correct Owners' equity refers to which to the following? << HIDE ANSWERS A A listing of the organization's assets and liabilities Correct B The ownership right of the owner(s) of the entity C Probable future sacrifices of economic benefits D All of these E None of these Question 5 [Question Bank ID: 7108] Type: Multiple Choice Correct Correct Management's use of resources can best be evaluated by focusing on measures of << HIDE ANSWERS A Liquidity Correct B Activity C Leverage D Book value Question 6 [Question Bank ID: 51332]

Type: Multiple Choice Correct Correct An item that cost $240 is to be sold for a price that will yield a gross profit ratio of 20%. The selling price should be << HIDE ANSWERS A $192 B $288 Correct C $300 D $1200 Question 7 [Question Bank ID: 42355] Type: Multiple Choice Correct Correct Wisdom Co. has a note payable to its bank. An adjustment is likely to be require d on Wisdom's books at the end of every month that the loan is outstanding to re cord the << HIDE ANSWERS A Amount of interest paid during the month B Amount of total interest to be paid when the note is paid off C Amount of principal payable at the maturity date of the note Correct D Accrued interest expense for the month Question 8 [Question Bank ID: 41128] Type: Multiple Choice Incorrect Incorrect Revenues are << HIDE ANSWERS Incorrect A Cash receipts Correct B Increases in net assets from selling a product C Increases in net assets from occasional sales of equipment D Increases in net assets from selling common stock Question 9 [Question Bank ID: 76115]

Type: Multiple Choice Correct Correct Gains differ from revenues, because gains << HIDE ANSWERS Correct A Are not a result of the entity's ongoing, central operations B Do not have to be realized C Are reported as income from operating activities D Do not involve any offsetting costs or expenses Question 10 [Question Bank ID: 100688] Type: Multiple Choice Correct Correct Which of the following is not usually considered a measure of an entity's liquid ity? << HIDE ANSWERS A Current ratio B Acid-test ratio Correct C Cash ratio D Working capital Question 11 [Question Bank ID: 25243] Type: Multiple Choice Correct Correct Which of the following is an accurate statement regarding a statement of cash fl ows? << HIDE ANSWERS A Only cash items that affect the income statement are included B Only material cash items that affect the income statement are included Correct C The primary purpose of the statement of cash flows is to provide relevant inform ation about the cash receipts and cash payment of a company D Immaterial financing activities that affect cash do not need to be included E None of these

Question 12 [Question Bank ID: 19494] Type: Multiple Choice Correct Correct In the statement of cash flows, the amount of depreciation and amortization expe nse is added back to net income because << HIDE ANSWERS Correct A These expenses do not affect cash, but were subtracted in the determination of n et income B These expenses affect investing activities, not operating activities C The cash disbursements for these accrued expenses will be made in a future perio d D These expenses are recognized for accounting purposes, but they do not represent economic costs Question 13 [Question Bank ID: 79303] Type: Multiple Choice Correct Correct The major difference between the indirect and the direct method of a statement o f cash flows appears in which the following activities section(s)? << HIDE ANSWERS A The investing activities and financing activities sections B The investing activities section only C The operating activities and financing activities sections Correct D The operating activities section only Question 14 [Question Bank ID: 54409] Type: Multiple Choice Correct Correct Current Generally Accepted Accounting Principles and auditing standards require the financial statements of an entity for the reporting period to include << HIDE ANSWERS A Earnings and gross receipts of cash for the period B Projected earnings for the subsequent period Correct C Financial position at the end of the period

D Current market values of all assets at the end of the period Question 15 [Question Bank ID: 57055] Type: Multiple Choice Correct Correct An expanded version of the accounting equation could be << HIDE ANSWERS A A + Rev = L + OE - Exp B A - L = Paid-in Capital - Rev - Exp Correct C A = L + Paid-in Capital + Beginning Retained Earnings + Rev - Exp D A = L + Paid-in Capital - Rev + Exp Question 16 [Question Bank ID: 107306] Type: Multiple Choice Correct Correct The principle of consistency means that << HIDE ANSWERS A The accounting methods used by an entity never change B The same accounting methods are used by all firms in an industry Correct C The effect of any change in an accounting method will be disclosed in the financ ial statements or notes thereto D There are no alternative methods of accounting for the same transaction Question 17 [Question Bank ID: 43502] Type: Multiple Choice Incorrect Incorrect Sage, Inc. has 20 employees who each earn $100 per day and are paid every Friday . The end of the accounting period is on a Wednesday. How much wages should the firm accrue at the end of the period? << HIDE ANSWERS Incorrect A $2,000 B $1,000 C $0

Correct D $6,000 Question 18 [Question Bank ID: 16058] Type: Multiple Choice Correct Correct Which of the following accounts is part of working capital? << HIDE ANSWERS A Retained Earnings B Sales Correct C Merchandise Inventory D Common Stock Question 19 [Question Bank ID: 81726] Type: Multiple Choice Correct Correct A firm has an ROI of 15%, turnover of 3, and sales of $6 million. The firm's mar gin is << HIDE ANSWERS A $900,000 Correct B 5% C 30% D $300,000 Question 20 [Question Bank ID: 25354] Type: Multiple Choice Correct Correct For a firm that presently has a current ratio of 2.0, the effect on this ratio o f paying a current liability is << HIDE ANSWERS Correct A Raises the current ratio B Lowers the current ratio C Doesn't affect the current ratio

D Depends on the amount paid