Question MBA 503 Final Examination-40 Questions Contained

MBA 503 Final Examination-40 Questions Contained
(1.) The inventory system that uses computer software to keep a running record of inventory
on hand is the:
A- Hybrid inventory system
B- Periodic inventory system
C- Costs of goods inventory system
D- Perpetual inventory system
(2.) When a LIFO liquidation occurs:
A- The company must dip into the older layers of inventory cost to compute the cost of
goods sold
B- And prices are rising, newer, higher, costs are shifted into cost of goods sold
C- Net income decreases
D- Income taxes decrease
(3.) Given the following data, calculate the dollar amount of ending inventory using the
average cost method. Round ending inventory to the nearest dollar.
Date
1/1
3/5
5/30
12/31
ABCD-

Item
Beginning Inventory
Purchase of Property
Purchase of Inventory
Ending Inventory

Unit
40 units @ $12 per unit
18 units @ $14 per unit
24 units @ $18 per unit
20 units

$1,419
$852
$1,164
$284

(4.) The inventory turnover ratio:
A- Will be lower for companies that have many low-priced items in the inventory.
B- Shows how many times the company sold its average level of inventory.
C- Should be high for a company that sells high-priced inventory items.
D- Is determined by dividing costs of goods sold by net sales.
(5.) Company B purchased some land and is preparing the land for a new building. Company
B should include which of the following in the cost of the land?
A- Cost of sprinkler system for the shrubbery.
B- Grading and cleaning the land.
C- Costs of driveways.
D- Cost of fencing.
(6.) Which of the following should be included in the costs of equipment?
A- Freights costs to deliver the equipment.
B- Installation costs for the equipment.
C- Testing costs to get the equipment ready for use.
D- All of the above.

(7.) Costs that do not extend the assets capacity or it’s useful life, but merely maintain the
asset or restore it to working order are recorded as:
A- Additions
B- Improvements
C- Expenses
D- Capital Expenditures
(8.) The process of allocating the cost of a plant asset to expense over the period in which the
asset is used is called:
A- Allocation
B- Disclosure
C- Depreciation
D- Amortization
(9.) At the end of an asset’s useful life, the balance in accumulated depreciation will be the
same as the:
A- Salvage value
B- Cumulative depreciation expense
C- Book value
D- Tax liability
(10.)
Thomas company trades in a printing press for a newer model. The cost of the old
printing press was $61,500, and accumulated depreciation up to the date of the trade-in
amounts to $38,000. The company also pays $41,200 cash for the newer printing press.
The journal entry to acquire the new printer, press will require a debit to Equipment for:
A- $41,200
B- $64,700
C- $102,700
D- $61,500
(11.)
The future value of 1 will always be:
A- Less than 1
B- Equal to 1
C- Equal to the interest rate
D- Greater than 1
(12.)
Which of the following discount rates will produce the smallest present value?
A- 8%
B- 10%
C- 6%
D- 4%
(13.)
Failure to record an accrued liability causes a company to:
A- Overstate assets
B- Understate liabilities
C- Understate income
D- Understate owner’s equity
(14.)
Sales taxes collected by a retailer as reported are:
A- Current liabilities
B- Current assets
C- Revenues
D- Contingent liabilities

(15.)
The market interest rate is also referred to as the:
A- Start rate
B- Contractural rate
C- Coupon rate
D- Effective rate
(16.)
On January 1, Multichip Corporation issued $2,000,000, 10-year, 8% bonds at
102. The journal entry to record this transaction would include a :
A- Debit to cash $2,000,000.
B- Credit to bond payable $2,040,000.
C- Debt to discount on bonds payable $40,000.
D- Credit to premium on bonds payable $40,000.
(17.)
A disadvantage of using bonds as a method of long-term financing is that:
A- Issuing bonds results in higher earnings per share.
B- Interest’s expense is tax deductible.
C- Bond holders do not have voting rights.
D- Interest must be paid regardless of earnings.
(18.)
If a corporation issues 5,000 shares of $5 par value common stock for $95,000,
the entry would include a credit to:
A- Common stock for $70,000.
B- Paid-in capital in Excess of Par for $95,000.
C- Paid-in Capital in Excess of Par for $70,000.
D- Common stock for $95,000.
(19.)
ABC Corporation purchases 40,000 shares of its own $10 par value, common
stock for $25 per share. What will be the effect of stockholders equity?
A- Decrease $1,000,000.
B- Decrease $400,000.
C- Increase $400,000.

Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.