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ACC 556 FINAL EXAM PART 1 Final Part 1 • Question 1 2 out of 2 points 1.Under the corporate form of business organization • Question 2 Accountants do not attempt to measure the change in a plant asset’s market value during ownership because • Question 3 Budget reports provide the feedback needed by management to see whether actual operations are on course. • Question 4 Intangible assets are rights, privileges, and competitive advantages that result from ownership of long-lived assets without physical substance. • Question 5 A corporation is not an entity that is separate and distinct from its owners. • Question 6 The market rate of interest is often called the • Question 7 A current liability is a debt that can reasonably be expected to be paid within one year, or the operating cycle, whichever is longer. • Question 8 A budget can be used as a basis for evaluating performance. • Question 9 Vertical analysis is a technique for evaluating a series of financial statement data over a period of time to determine the increase (decrease) that has taken place. • Question 10 Bonds with a face value of $400,000 and a quoted price of 104¼ have a selling price of • Question 11 The current cash debt coverage ratio is considered a better representative of liquidity than the current ratio because it involves the entire year rather than a balance at one point in time. • Question 12 On January 1, 2014, Ermler Company, a calendar-year company, issued $1,000,000 of notes payable, of which $250,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2014, is • Question 13 One objective of the income statement is to separate the results of continuing operations from those of discontinued operations. • Question 14 All of the following are true regarding financial statement analysis ratios associated with liabilities except • Question 15 A primary objective of the statement of cash flows is to show the income or loss on investing and financing transactions. Answer • Question 16 A master budget is most useful in evaluating a manager’s performance in controlling costs. • Question 17 The master budget reflects management’s long-term plans encompassing five years or more. • Question 18 The debt to assets ratio measures the percentage of the total assets provided by creditors. • Question 19 A company whose current liabilities exceed its current assets may have a liquidity problem. • Question 20 During 2014, Phelps Corporation reported net sales of $3,000,000, net income of $1,320,000, and depreciation expense of $80,000. Phelps also reported beginning total assets of $1,000,000, ending total assets of $1,500,000, plant assets of $800,000, and accumulated depreciation of $500,000. Phelps’s asset turnover ratio is • Question 21 Cash dividends are not a liability of the corporation until they are declared by the board of directors. • Question 22 Once cost is established for a plant asset, it becomes the basis of accounting for the asset unless the asset appreciates in value, in which case, market value becomes the basis for accountability. • Question 23 The book value of a plant asset is the difference between the • Question 24 On January 1, a machine with a useful life of five years and a residual value of $15,000 was purchased for $75,000. What is the depreciation expense for year 2 under straight-line depreciation? • Question 25 Which of the following is not properly classified as property, plant, and equipment? Accounts Assignment Help, Accounts Homework help, Accounts Study Help, Accounts Course Help


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