1. A company has $56,000 in cash; $12,000 in accounts receivable; $25,000 in short-term investments; and $100,000 in merchandise inventory. The company also has $60,000 in current liabilities. The company’s quick ratio is
A. 3.217.
B. 1.550.
C. 0.933.
D. 1.133.
2. Patty’s Baker has cost of goods sold for the years 2011, 2010, and 2009, respectively, of $28,600, $26,900, and $25,600. If 2009 is the base year, the trend percentage for 2011 is
A. 11.72%.
B. 111.72%.
C. 5.08%.
D. 105.08%.
3. If total assets are $6,000, what is the common-size figure of cash, assuming that cash has a balance of $2,400?
A. 100.0%
B. 40.0%
C. 120.0%
D. 60.0%
4. Operating cash flows affect
A. current assets and current liabilities.
B. equity accounts.
C. long-term liability accounts.
D. long-term asset accounts.
5. If current assets were $100,000 in 2009 and $88,000 in 2010, what was the amount of increase or decrease in percentage terms from 2009 to 2010? (Round to the nearest percent.)
A. Increase of 14%
B. Increase of 12%
C. Decrease of 12%
D. Decrease of 14%
6. Casey Company has an accounts receivable turnover of 36 days, an inventory turnover of 77 days, and an accounts payable turnover of 40 days. Casey’s cash conversion cycle is _______ day(s).
A. 81
B. 1
C. 73
D. 153
7. Casey Company has 5,000 shares of treasury cost that it purchased for $13 per share. It later resold 2,000 of those shares for $17 per share. The amount to be credited to Paid-in Capital Treasury Stock is
A. $30,000.
B. $8,000.
C. $34,000.
D. $26,000.
8. Isaiah Corporation’s Accounts Receivable increased by $35,000, and its Accounts Payable decreased by $18,000. What is the net effect on cash from operations under the indirect method?
A. $18,000
B. $53,000
C. +$17,000
D. +$35,000
9. Operating expenses other than depreciation for the year were $335,000. Prepaid expenses decreased by $7,000. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be
A. $342,000.
B. $328,000.
C. $7,000.
D. $335,000.
10. For vertical analysis purposes, the base item on the income statement is
A. net income.
B. total expenses.
C. gross profit.
D. net sales.
11. Casey Company has a $2,400 credit balance in Paid-In Capital Treasury Stock. It sells 500 shares of treasury stock that the company reacquired at $21/share, for $18/share. After the transaction, what will the balance be in the Paid-In Capital in Excess of Par Treasury account?
A. $900 credit B. $3,900 credit C. $900 debit D. $1,500 debit
12. Ryan Industries has an inventory turnover of 112 days, an accounts payable turnover of 73 days, and an accounts receivable turnover of 82 days. Ryan’s cash conversion cycle is _______ days.
A. 43
B. 121
C. 9
D. 103
13. The Isaiah Corporation Stockholders’ Equity section includes the following information:
Preferred Stock
Paid-in Capital in Excess of Par Preferred Common Stock
Paid-in Capital in Excess of Par Common Retained Earnings
$22,000 2,980 48,000 3,400 7,350
Total par value of the preferred and common stock is
A. $70,000.
B. $83,730.
C. $77,350.
D. $76,380.
14. Earnings that a stockholder receives from a corporation are an example of which stockholder right? A. Preemption
B. Liquidation
C. Dividends
D. Vote
15. Tammy Corporation has 350,000 shares of $3 par common stock outstanding. It has declared a 5% stock dividend. The current market price of the common stock is $7.50/share. The amount that will be debited to retained earnings on the date of declaration is
A. $78,750.
B. $131,250.
C. $52,500.
D. $183,750.
16. Accounts receivable amounted to $215,000 at the beginning of the year and $245,000 at the end of the year. Income reported on the income statement for the year was $300,000. The cash flow from operating activities on the cash flow statement using the indirect method is
A. $315,000.
B. $300,000.
C. $270,000.
D. $330,000.
17. What are the rate of return on stockholders’ equity and the rate of return on common stockholders’ equity (rounded to the nearest one-tenth of a percent) given the following information:
Net Income
Preferred Dividends
Common Stock
Common Stockholders Equity 1/1/2011 4,400,000 Total Stockholders Equity 1/1/2011 5,300,000 Total Stockholders Equity 12/31/2011 5,500,000
A. Return on Stockholders’ Equity: 6.5 %; Return on Common Stockholders’ Equity: 7.6%
B. Return on Stockholders’ Equity: 7.8 %; Return on Common Stockholders’ Equity: 8.9%
C. Return on Stockholders’ Equity: 5.6 %; Return on Common Stockholders’ Equity: 6.7% D. Return on Stockholders’ Equity: 8.1 %; Return on Common Stockholders’ Equity: 9.2%
18. What is the rate of return on common stockholders’ equity if sales are $100,000, net income is $22,700, and average common stockholders’ equity is $86,000?
A. The rate of return can’t be determined from the information given.
B. 26.4%
C. 22.7%
D. 86.0%
19. If you own 500 shares (2% of a corporation’s stock) and the corporation issues 15,000 new shares, how many of the new shares can you purchase under preemptive right?
A. 0
B. 300
C. 500
D. 800
20. Which activities are computed differently using the two methods of formatting a statement of cash flows?

A. Operating activities
B. Both operating activities and investing activities
C. Investing activities
D. Financing activities