In a perpetual inventory system, which of the following is NOT part of the series of journal entries made when merchandise is sold on credit?
- A) Credit the Cost of Goods Sold account
- B) Credit the Sales account
- C) Credit the Merchandise Inventory account
- D) Debit the Accounts Receivable account
Which of the following is NOT an example of accelerated depreciation method?
- A) Straight-line method
- B) Sum-of-the-years digit method
- C) Double-declining balance method
- D) Modified Accelerated Cost Recovery System
As stated in the audit report, or Report of Independent Accountants, the primary responsibility for a company’s financial statements lies with which of the following?
- A) The owners of the company
- B) Independent financial analysts
- C) The auditors
- D) The company’s management
Capital stock is normally listed on which of the following financial statements of a business enterprise?
- A) Cash flow Statement
- B) Income Statement
- C) Statement of Retained Earnings
- D) Balance Sheet
The money that a company gets from potential investors in addition to the stated value of the stock is referred to which of the following?
- A) Paid in capital
- B) Additional paid in capital
- C) Capital stock
- D) Contributed capital
Generally , investors want to buy shares at which of the following prices?
- A) At face value
- B) Below face value
- C) Above face value
- D) At market value
By computing component percentages for several successive balance sheets, which of the following can NOT be found?
- A) The increasing items
- B) The decreasing items
- C) The unchanged items
- D) The future profitable items
Which of the following are the ratios that are used to determine an entity’s short-term debt paying ability?
- A) Times interest earned, inventory turnover, current ratio, and receivables turnover
- B) Times interest earned, acid-test ratio, current ratio, and inventory turnover
- C) Current ratio, acid-test ratio, receivables turnover, and inventory turnover
- D) Asset turnover, times interest earned, current ratio, and receivables turnover
If a company had a current ratio of 0.5, then which of the following statements regarding that company's working capital would be true?
- A) The company's working capital would be positive
- B) The company's working capital would be zero
- C) The company's working capital would be negative
- D) The company's working capital would be 2:1
A company has an inventory turnover ratio of 1.05 times, and cost of goods sold of Rs. 50,000. Calculate the average inventory of the company
- A) Rs. 47, 500
- B) Rs. 47, 619
- C) Rs. 47, 500
- D) Rs. 47, 650