Practice Quiz

CPA Accountant Review Questions - Question List

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31. A deferred credit will appear on the balance sheet as a/an:
  1. Asset
  2. Liability
  3. Owner’s equity
  4. Neither. It is not shown on the balance sheet.
  5. It depends on the situation.
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32. The following widgets were available in inventory for sale during the year. As you can see, the cost was rising throughout the year:

Beginning Inventory: 5 units at $51
Purchase 1: 12 units at $53
Purchase 2: 15 units at $54
Purchase 3: 10 units at $63

The ending inventory was 10 units. Assuming the company uses the periodic system for inventory, what is the value of the inventory at year end using the average cost method?
  1. $500
  2. $510
  3. $630
  4. $540
  5. $555
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33. Big Bertha’s Birds decided to purchase Ken’s Canaries. Ken’s Canaries has a book value of $550,000. Big Bertha paid $655,000 in stock and cash under the purchase method. How much goodwill would Big Bertha be required to put on its balance sheet?
  1. $550,000
  2. $655,000
  3. $155,000
  4. $105,000
  5. $100,000
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34. With all her recent acquisitions, Big Bertha needs to take a good look at her debt to equity ratio. If she owes $100,000 in long term debt, $50,000 in short term loans, and has $1,000,000 in shareholder equity, what is her debt to equity ratio?
  1. 0.15
  2. 0.10
  3. 0.05
  4. 0.50
  5. 0.20
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35. If $5,000,000 in 7% bonds are issued at 104 ½, how much cash is generated from the sale?
  1. $1,040,000
  2. $1,000,000
  3. $5,000,000
  4. $5,225,000
  5. $3,500,000
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