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1. Strayer-University ACC 556 Midterm
Exam Part 1
Get helpforStrayer-University ACC556 MidtermExamPart 1.We provide assignment, homework,
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ACC 556 MIDTERM EXAM PARTI
Question1
Managementmaychoose any inventorycostingmethoditdesiresaslongasthe cost flow
assumptionchosenisconsistentwiththe physical movementof goodsinthe company.
• Question2
2 outof 2 points
An agingof accounts receivableschedule isbasedonthe premise thatthe longerthe periodan
account remainsunpaid,the greaterthe probabilitythatitwill eventuallybe collected.
• Question3
2 outof 2 points
To obtainmaximumbenefitfromabankreconciliation,the reconciliationshouldbe preparedby
the employee authorizedtosignchecks.

2. • Question4
2 outof 2 points
Expense recognitionistiedtorevenuerecognition.
• Question5
0 outof 2 points
Whichof the followingisnota common way that managersuse the balance sheet?
• Question6
2 outof 2 points
Whichof the followingwouldnotbe classifiedasalong-termliability?
• Question7
2 outof 2 points
Solvencyratiosmeasure the short-termabilityof the companytopay itsmaturingobligations.

3. • Question8
2 outof 2 points
Requiringemployeestotake vacationsisaweaknessinthe systemof internal controlsbecause
it doesnotpromote operational efficiency.
• Question9
The revenue recognitionprincipledictatesthatrevenuebe recognizedinthe accountingperiod
inwhichthe performance obligationissatisfied.
• Question10
Use the followingdatatocalculate the current ratio.
Carne AutoSupplies
Balance Sheet
December31, 2014
Cash $ 35,000 Accountspayable $ 65,000
Accountsreceivable 50,000 Salariesandwagespayable 10,000
Inventory 70,000 Mortgage payable 90,000
Prepaidinsurance 40,000 Total liabilities $165,000
Stock investments 80,000
Land 95,000

4. Buildings $100,000 Commonstock $120,000
Less:Accumulated Retainedearnings 250,000
depreciation (30,000) 85,000 Total stockholders’equity $370,000
Trademarks 70,000 Total liabilitiesand
Total assets $535,000 stockholders’equity $535
• Question11
2 outof 2 points
LankstonCompanybeganthe yearby issuing$90,000 of commonstock forcash. The company
recordedrevenuesof $825,000, expensesof $720,000, andpaiddividendsof $45,000. What was
Lankston’snetincome forthe year?
• Question12
The partnershipformof business organization
• Question13
2 outof 2 points
A concentrationof creditriskisa threat of nonpaymentfromasingle customerorclassof
customersthatcouldadverselyaffectthe financial healthof the company.

5. • Question14
2 outof 2 points
BathlinksCorporationhasadebtto assetsratioof 73%. This tellsthe userof Bathlinks’sfinancial
statementsthat
• Question15
2 outof 2 points
Ownersof businessfirmsare the onlypeoplewhoneedaccountinginformation.
• Question16
Financingactivitiesinclude the purchase orsale of long-livedassetsorthe purchase or sale of
investmentsecurities.
• Question17
2 outof 2 points
Whichof the followingisthe leastlikelyconsiderationthatmanagementuseswhendeciding
whethertopay a dividend?
• Question18
2 outof 2 points
The bestdefinitionof assetsisthe

6. • Question19
2 outof 2 points
Marvin ServicesCorporationhadthe followingaccountsandbalances:
Accountspayable $18,000 Equipment $21,000
Accountsreceivable 3,000 Land 21,000
Buildings ? Unearnedservice revenue 6,000
Cash 9,000 Total stockholders'equity ?
If the balance of the Buildingsaccountwas$45,000 and the equipmentwassoldfor$21,000, what
wouldbe the total of stockholders'equity?
• Question20
2 outof 2 points
An advantage of usingthe periodicinventorysystemisthatitrequireslessrecordkeepingthan
the perpetual inventorysystem.
• Question21
2 outof 2 points
Consistentuse of the same accountingprinciplesandmethodsisnecessaryformeaningful
analysisof trendswithinacompany.
• Question22
2 outof 2 points

7. The economicresourcesthatare ownedbya businessare calledstockholders’equity.
• Question23
2 outof 2 points
The multiple-stepincome statementisconsideredmore useful thanthe single-stepincome
statementbecause ithighlightsthe componentsof netincome.
• Question24
2 outof 2 points
Source documentscanprovide evidence thatatransactionhas occurred.
• Question25
2 outof 2 points
Goodsthat have beenpurchasedFOBdestinationbutare intransit,shouldbe excludedfroma
physical countof goodsby the buyer.
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