1. Two employees working together in order to circumvent a system is known as...
2. Internal control is defined as...
A) any system a company puts in place to protect its resources
B) a company's authority over its personnel
3. The balance sheet measures...
A) a specific period of time
B) a specific point in time
4. The balance sheet measures a company's assets, liabilities, and owners' equity accounts, and can also be referred to as the...
A) statement of financial opinion
B) statement of financial position
5. Generally, the most valued asset for a company to have is...
6. Inventory is a list of...
A) the company's equipment
B) products ready to sell to the customer
7. PP&E is short for...
A) property, plant, and equipment
B) property, personnel, and equipment
8. Liquidity is defined as...
A) a company's ability to meet unexpected problems and take advantage of unexpected opportunities
B) a company's ability to generate sales
9. The best method for an auditor to evaluate an equipment purchase is to...
A) inspect the accounting records
B) match the accounting records to a document from a third party, such as an invoice or bank statement
10. At the top of the balance sheet, one would expect to see...
A) one date
B) two dates
1A, 2A, 3B, 4B, 5A, 6B, 7A, 8A, 9B, 10A
1. A company makes a sale on December 1 worth $100,000. It receives $20,000 immediately with a promise for the remaining $80,000 on March 31. What is its accounts receivable balance on December 31?
2. A company sells 120,000 units at a sales price of $3.50 each and receives $135,000 immediately from the customer with a promise for the rest. What is the accounts receivable balance after the sale?
3. A company makes on a sale on June 1 worth $85,000 and receives 50% of the balance immediately. On July 1, it receives an additional $10,000 from the customer, and then receives the remainder on August 15. What was the company's accounts receivable balance at the end of June, July, and August?
4. A company has $50,000 in cash, $100,000 in inventory, $90,000 in property, plant and equipment (PP&E) and $35,000 in accounts payable. What is the company's total asset balance?
5. If a company's Property, Plant & Equipment (PPE) balance begins the year at $1,200,000 and increases to $1,500,000 at the end of the year, by what percentage did it increase?
2. 120,000 x $3.50 = $420,000
$420,000 - $135,000 = $285,000
3. June 30 = $85,000 x .5 = $42,500
July 31 = $42,500 - $10,000 = $32,500
August 30 = $0
4. $50,000 + $100,000 + $90,000 = $240,000
5. Percentage Change = (New - Old) / Old
($1,500,000 - $1,200,000) / $1,200,000
$300,000 / $1,200,000 = 25%