Penn Foster Exam 061695 (NOT ENOUGH SPACE TO POST ALL) !! - 25934

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1.   A company receives a note payable for $3,500 at 9% for 45 days. How much interest (to the nearest cent) will the customer owe using a 360-day year?


A. $315.00

B. $354.38

C. $38.84

D. $39.38

2.   Using a 360-day year, the maturity value of a 69-day note for $1,500 at 7% annual interest is (rounded to the nearest cent)


A. $1,584,88.

B. $1,605.00.

C. $20.13.

D. $1,520.13.

3.   Tammy Industries inadvertently debited a $5,000 betterment as an ordinary expense. Which of the following will occur as a result of this mistake?


A. Retained earnings will be overstated by $5,000.

B. The asset will be overstated by $5,000.

C. The asset will be understated by $5,000.

D. Net income will be overstated by $5,000.


4.   Which of the following would not be considered a contingent liability?


A. Pending legal action

B. Potential fines from the EPA

C. Cosigning a loan

D. Mortgage payable





5.   Which of the following would indicate poor internal control over accounts receivable?


A. The same person handling cash receipts also records the accounts receivable transactions.

B. The person who handles accounts receivable wouldn't write off accounts as uncollectable.

C. The person handling cash receipts passes the receipts to someone who enters them into accounts receivable.

D. The mailroom employees open the mail and give the cash receipts to another employee.

6.   If the amount extracted from a coal mine was different every year for four years, you would


A. debit depletion expense for the same amount each year.

B. credit accumulated depletion—coal mine for the same amount each year.

C. recompute the depletion expense rate per unit each year.

D. use the same depletion expense rate per unit each year.

7.   Margaret is a customer of Tammy Company. The company wrote off her account of $1,200 on August 15. On October 12, she sent in a payment of $560. What will Tammy Company record first to reinstate her account?


A. Debit Uncollectible Accounts Expense; credit Accounts Receivable/Margaret.

B. Debit Cash; credit Accounts Receivable/Margaret.

C. Debit Accounts Receivable/Margaret; credit Allowance for Doubtful Accounts.

D. Debit Allowance for Doubtful Accounts; credit Accounts Receivable/Margaret.

8.   Which of the following would be considered a cash equivalent?


A. Checks

B. Currency

C. Time deposits

D. Money orders






9.   A company purchased furniture on January 1, 2012. Its cost was $15,600, and it had a residual value of $1,600. Its useful life is determined to be three years. Using double-declining balance depreciation, the depreciation for 2012 to the nearest dollar will be


A. $4,667.

B. $10,400.

C. $9,333.

D. $5,200.


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