very simple basic accounting questions!

 

1.Picture It Co. is a retailer of high-end cameras. Typically, the company purchases a camera for $500 and sells it for $900. What is the gross profit on this camera?

Select one:

a. $900

b. $400

c. $450

d. $500

2.On January 1st, 2013, Terry's Co. took out a four-year, $400,000 loan from the bank. The loan is payable in equal annual installments. How should this loan be reported on a classified balance sheet as at January 1, 2013?

Select one:

a. $400,000 long-term liability

b. $100,000 current liability; $300,000 long-term liability

c. $400,000 current liability

d. $300,000 current liability; $100,000 long-term liability

3.Ownership in a corporation is in the form of:

Select one:

a. Stock

b. Assets

c. Bonds

d. Money

4,On January 1, 2013, Sam invested capital of $500,000 into his newly formed corporation. That year, the corporation generated $70,000 of net income. In 2014, the corporation generated $90,000 of net income and paid out $30,000 in dividends. Determine the ending stockholders' equity balance at the end of 2014.

Select one:

a. $630,000

b. $600,000

c. $650,000

d. $660,000

5.True or False: The perpetual inventory system only updates inventory records at the end of each physical inventory count. The periodic inventory system updates inventory levels after every physical inventory count.

Select one:

True

False

6.When a corporation pays out portions of its earnings to its owners, it is known as :

Select one:

a. Stock

b. Distributed earnings

c. Dividends

d. Owner earnings

7.Heels R Us Inc. is a women's shoe retailer. On February 1st, 2013; the company purchased 500 units of a popular new model A shoe for $20 each. On March 3rd, the company purchased 700 units of the newly released B model shoe for $30 each causing the selling price of the A model to drop from $70 to $60. On March 15th, Heels R Us sells 300 units of the A model. What is gross profit earned on the sale?

Select one:

a. $15,000

b. $6,000

c. $12,000

d. $18,000

8.TUV Inc. had 700 microwaves in stock on October 1st, 2013. On October 8th, TUV sold 75 microwaves and on October 17th, another 75 units were sold. How many units will be showing as in stock on October 10th, assuming that TUV Inc. uses a perpetual inventory system?

Select one:

a. 550

b. 700

c. 625

d. 650

9.On January 1, 2013, Michael invested capital of $50,000 into his newly formed corporation. That year, the corporation generated $15,000 of net income and paid half out in dividends. In 2014, the corporation generated $17,000 of net income and paid out half of it in dividends. Determine the ending stockholder's equity balance at the end of 2014.

Select one:

a. $62,500

b. $60,100

c. $66,000

d. $60,000

10.True or False: The periodic inventory system only updates inventory records at the end of each physical inventory count.

Select one:

True

False

11.True or False: Under a classified balance sheet, assets are split into two groups.

Select one:

True

False

12.Sally is considering opening up a lemonade stand to earn some spending money over the summer. She estimates each glass of lemonade will cost her $1 to prepare for sale. What does she need to sell it for in order to make $1.50 of gross profit on each glass?

Select one:

a. $2.50

b. $2.00

c. $3.00

d. $1.50

13.Alex decides to start his own corporation and invests $20,000. Which of the following is the correct journal entry?

Select one:

a. Dr Capital Account; Cr Common Stock

b. Dr Cash; Cr Retained Earnings

c. Dr Cash; Cr Common Stock

d. Dr Inventory; Cr Revenue

14.True or False: A merchandising business is the only business that only sells products for profit.

Select one:

True

False

15.Cost of goods sold is defined as: 

Select one:

a. The cost of equipment

b. The cost of running operations

c. The cost of advertising products

d. The cost of inventory

16.QWERTY Inc. purchases and resells cellular phones. On November 1st, 2013, the company purchased 5,000 phones for $100. On November 22nd, the company sells 1,250 units for $150 each. What is the cost of goods sold on the sale?

Select one:

a. $187,500

b. $125,000

c. $500,000

d. $375,000

17.Which of the following is an example of a long-term liability?

Select one:

a. Interest Payable

b. Accounts Payable

c. Unearned Revenue

d. None of the available choices

18.Carl's Cycle Co. had 10,000 bicycles in stock on April 1st, 2013. Between April 1st, and April 15th, 1,900 units were sold. How many units will be showing as in stock on April 20th, assuming that Carl's Cycle Co. uses a periodic inventory system? Assume that Carl's Cycle Co. performs an inventory count at month-end.

Select one:

a. 8,100

b. 10,000

c. 11,900

d. 9,000

19.True or False: Under a classified balance sheet all liabilities are listed in one group.

Select one:

True

False

20.Belinca Inc. is a shoe retailer. On February 1st, 2013; the company purchased 500 units of a popular new model X shoe for $20 each. On March 3rd, the company purchased 700 units of the newly released Y model shoe for $30 each causing the selling price of the X model to drop from $70 to $60. On March 15th, Heels R Us sells 300 units of the X model. What is the cost of goods sold on the sale?

Select one:

a. $6,000

b. $18,000

c. $9,000

d. $10,000

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