Final Exam Part I_ Multiple Choice

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School

Yorkville University *

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Course

3423

Subject

Accounting

Date

Apr 3, 2024

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pdf

Pages

16

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3/24/24, 4:18 PM Final Exam Part I: Multiple Choice https://courses.yorkvilleu.ca/mod/quiz/review.php?attempt=312350 1/16 AskYU MyYU 623 Home / My courses / BUSI3423-24W-O-A / Unit 11: Final Exam: Summative Case Analysis 18 March - 24 March / Final Exam Part I: Multiple Choice S tarted on Saturday, 23 March 2024, 12:06 PM S tate Finished C ompleted on Saturday, 23 March 2024, 12:46 PM T ime taken 40 mins 5 secs Question 1 Complete Marked out of 1.00 Callable preferred shares Select one: a. Have rights to participate in any new share issuance. b. Usually have voting rights. c. May be called or redeemed at the option of the issuing corporation. d. May be redeemed at any time at the shareholder’s option.
3/24/24, 4:18 PM Final Exam Part I: Multiple Choice https://courses.yorkvilleu.ca/mod/quiz/review.php?attempt=312350 2/16 Question 2 Complete Marked out of 1.00 On January 1, 2020, Raptors Corp. changed its inventory valuation method from weighted-average cost to FIFO for ±nancial statement and income tax purposes, to make their reporting as reliable and more relevant. The change resulted in a $ 900,000 increase in the beginning inventory at January 1, 2020. Assume a 25% income tax rate. The cumulative effect of this accounting change reported for the year ended December 31, 2020 is Select one: a. $225,000 b. $0 c. $675,000 d. $900,000 Question 3 Complete Marked out of 1.00 The times interest earned ratio measures Select one: a. An enterprise’s ability to meet interest payments as they come due. b. The percentage of total assets ±nanced by creditors. c. The amount of interest expense related to long-term debt. d. The pro±tability of an enterprise.
3/24/24, 4:18 PM Final Exam Part I: Multiple Choice https://courses.yorkvilleu.ca/mod/quiz/review.php?attempt=312350 3/16 Question 4 Complete Marked out of 1.00 On September 1, 2021, Espresso Corp. issued a $1,800,000, 12% note to Big 5 Bank, payable in three equal annual principal payments of $600,000. On this date, the bank's prime rate was 11%. The ±rst payment for interest and principal was made on September 1, 2022. At December 31, 2022, Espresso should record accrued interest payable of Select one: a. $ 48,000 b. $ 44,000 c. $ 66,000 d. $ 72,000 Question 5 Complete Marked out of 1.00 Which of the following is NOT considered to be an accounting error? Select one: a. Changing depreciation methods from declining balance to straight line b. Changing from the cash basis to the accrual basis c. Failing to accrue wages payable at year end d. Expensing the cost of a new machine
3/24/24, 4:18 PM Final Exam Part I: Multiple Choice https://courses.yorkvilleu.ca/mod/quiz/review.php?attempt=312350 4/16 Question 6 Complete Marked out of 1.00 If bonds are initially sold at a discount and the straight-line method of amortization is used, interest expense in the earlier years will be Select one: a. The same as it would have been had the effective-interest method of amortization been used. b. Less than it would have been had the effective-interest method of amortization been used. c. Higher than it would have been had the effective-interest method of amortization been used. d. Less than the stated rate of interest. Question 7 Complete Marked out of 1.00 On January 1, 2020, Jeep Corp. issued $ 2,000,000, 5% bonds, which mature on January 1, 2027. The bonds were issued for $2,120,045 to yield 4%. Jeep uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. At December 31, 2020, the adjusted balance in the Bonds Payable account should be Select one: a. $ 2,104,847 b. $ 2,120,045 c. $ 2,000,000 d. $ 2,135,243
3/24/24, 4:18 PM Final Exam Part I: Multiple Choice https://courses.yorkvilleu.ca/mod/quiz/review.php?attempt=312350 5/16 Question 8 Complete Marked out of 1.00 Which of the following is NOT a potential advantage of leasing? Select one: a. 100% ±nancing at ±xed rates b. Cheaper ±nancing c. No tax advantages for the lessor d. Protection against obsolescence
3/24/24, 4:18 PM Final Exam Part I: Multiple Choice https://courses.yorkvilleu.ca/mod/quiz/review.php?attempt=312350 6/16 Question 9 Complete Marked out of 1.00 Information concerning the capital structure of Catan Corporation follows D ec. 31, 2020 D ec. 31, 2019 Common shares outstanding 100,000 shares 100,000 shares Convertible preferred shares outstanding 10,000 shares 10,000 shares 9% convertible bonds $ 2,000,000 $ 2,000,000 During 2020, Catan paid dividends of $ 1.00 per common share and $ 2.50 per preferred share. The preferred shares are non-cumulative, and convertible into 20,000 common shares. The 9% convertible bonds are convertible into 50,000 common shares. Net income for calendar 2020 was $500,000. Assume the income tax rate is 30%. Basic earnings per share for 2020 is Select one: a. $ 3.65 b. $ 4.75 c. $ 3.33 d. $ 5.00
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