Question

Which of GAAPs relates to the following policy?

The company owner’s personal receivables will not appear on the company's balance sheet.

a. Going concern

b. Conservatism

c. Economic Entity

d. Objective evidence

A company has $120,000 assets and $60,000 liabilities. In this case, how much of these assets are met with net assets?

a. 30%

b. 50%

c. 70%

d. 60%

Which following statements is correct about debit and credit concepts?

a. Debit decreases in assets

b. Credit increases in liabilities

c. Credit decreases in assets

d. Debit increases in revenues

4. ABC pharmacy ordered medicines at $100,000

a. Record on inventory as a debit

b. Record on accounts receivable as a credit

c. Record on cash as a debit

d. Not a financial event

5. A hospital purchases some computers $30,000. Computer’s useful life is defined 5 years. Salvage value’s $1,000. According to Double Declining Balance, what amount is used depreciation 2nd year?

$ 7,200

$ 12,000

$ 1,555

$ 2,592

A medical device company;

On January 1, purchases 1,500 units from $20 each

On December 15, purchases 2,000 units from $21 each

On December 31, sells 3,000 units from $23 each

What does reported profit in income statements show under LIFO?

a. $ 5,000

b. $ 7,000

c. $ 7,500

d. $ 8,000

Patient discharged who used $15,000 of inventory and whose insurance company was billed $25,000. Create a journal entry and a T-Account entry. Account receivable, Inventory Expense, Inventory and Patient Service Revenue accounts can be used.:

                                                                                                                                                                                                                               

8.  What is the formula of Net working capital, or working capital?

a. Total Assets- Total Liabilities

b. Fixed Assets- Long Term Liabilities

c. Current Assets - Current Liabilities

d. Total Assets/Net Assets

The most essential element of working capital is ___________________.

a. Marketable Securities

b. Cash

c. Net Assets

d. Inventories

Which of the following is not one of Short-Term Investment Options?

a. Treasury bonds

b. Negotiable CD

c. Repurchase agreements

d. Treasury Bill

11. Which of the following statements about Money Market Funds is not true?

a. Money Market Funds’ interest rates higher than traditional savings

b. Money Market Funds’ interest rates lower than Certificates of Deposit

c. Money can’t be deposited or withdrawn until mature date

d. Money market funds are generally considered to be reasonably safe investments

  12. ______________________shows how long it has been between the current date and the date when uncollected bills were issued?

a. Bad Debt schedule

b. Aging schedule

c. Unpaid Bills schedule

d. Wait list schedule

13. Vulcan Hospital buy 20.000 disposal surgical staplers per year. The hospital pays $40 per staplers. Each time they place an order, it takes a paid clerk $5 worth of time to process the order. The delivery cost is $20 per order. The hospital earns an average of 6% interest on invested money. The hospital pays $ 1.5 per devices for storage and has an insurance policy worth of $2 per devices per year. Please calculate Economic Order Quantity for disposal surgical staplers.

                EOQ Formula

N = Total number of units of inventory ordered per year

C = Annual cost to carry one unit of inventory

O = The cost related to placing one order

Answer 1

Question 1: Which of gaaps relates to the following policy? The company owner’s personal receivables will not appear on the company's balance sheet.

Answer: C) economic entity

In accounting, an economic entity is one of the assumptions made in generally accepted accounting principles. Almost any type of organization or unit in society can be an economic entity. Examples ofeconomic entities are hospitals, companies, municipalities, and federal agencies.

Question 2: A company has $120,000 assets and $60,000 liabilities. In this case, how much of these assets are met with net assets?

Answer: B) 50%

Net assets= total assets-total liabilities

     =120000-60000

     =60000

These assets are met with net assets=60000*100/120000=50%

Question 3: Which following statement is correct about debit and credit concepts?

Answer: (B). Credit increases in liabilities

                (C) . Credit decreases in assets

• Asset accounts. A debit increases the balance and a credit decreases the balance.
• Liability accounts. A debit decreases the balance and a credit increases the balance.
• Equity accounts. A debit decreases the balance and a credit increases the balance.

Question 4: ABC pharmacy ordered medicines at $100,000

Answer: (D). Not a financial event

Because ABC pharmacy only give order. This is not financial transaction

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