Question

1. A company's fiscal year may:

Select one:

A. Be any portion of a year including a month or quarter

B. Be for a period either greater or less than 12 months

C. Be the same as the calendar year

D. All of the above are true of a company's fiscal year

2. David Bash's Landscaping Company has compiled the following list of account balances of various assets, liabilities, revenues and expenses on December 31, 2016, the end of its first year of operations.

Common stock	$50,400
Accounts payable	10,000
Salary expense	18,000
Repairs expense	3,200
Dividends	20,000
Truck	34,000
Equipment	25,200
Notes payable	32,800
Cash	70,400
Supplies expense	6,400
Service revenue	87,200
Gasoline expense	3,200

The retained earnings for David Bash’s Landscaping on December 31, 2016 are:

Select one:

A. $12,600

B. $56,400

C. $36,400

D. $ 2,800

3.

In computing the price-earnings ratio, the current per share market price of the firm's common stock is divided by the:

Select one:

A. Earnings per common share

B. Net income for the year

C. Dividends per common share

D. Par value per common share

4.

The 2016 financial statements for Bloomington Company show the following:

Cost of goods sold	$242,000
Inventory, Beginning Balance	$50,000
Inventory, Ending Balance	$52,000
Accounts Payable, Beginning Balance	$70,000
Accounts Payable, Ending Balance	$66,000

Cash paid for merchandise is:

Select one:

A. $248,000

B. $244,000

C. $240,000

D. $236,000

5.

The full disclosure principle:

Select one:

A. States that personal contact and financial information for each member of senior management for the company be disclosed.

B. Requires that company maintain a record of activities separate from the economic and personal activities of its owners.

C. Requires that a business disclose all significant financial facts and circumstances in a company’s annual report.

D. States that sales revenue should be recorded when services are performed or goods are sold.

E. None of the above

6.

The revenue recognition principle:

Select one:

A. States that the recording of revenue should be based on reliable and verifiable evidence.

B. Only requires that sales revenue must be earned before it is recorded on the income statement.

C. Only requires that sales revenue must be realized or realizable before it is recorded on the income statement.

D. States that sales revenue should be recorded when services are performed or goods are sold.

E. None of the above

Answer 1

Q1.
Answr is C. Be the same as Calender year
Q2.
Answer is C. $ 36400
Explanation:
Assets:
Truck		34000
Equipment		25200
Cash		70400
Total assets		129600
Less: liabilities
Accounts payable		10000
Notes payable		32800
Common Stock		50400
Retained earning		36400
Q3.
A. Earnings per common Share
Q4.
Answer is A. $ 248000
Explanation:
Cost of Goods sold				242000
Add: Ending inventory				52000
Less: Beginning Inv entory				$50,000
Add: Accounts payable in beginning				70000
Less: Accounts payable at end				$66,000
Cash paid for invevntory				248,000
Q5.
Answer is C. Requires that a business disclose all significant financial facts and circumstances in a company annual report.
Q6.
Answer is D. states that sales revenue should be recorded when service are performed or goods are sold.