At December 31, 2010, McToil, Inc. owes its employees 20,000 for work performed in 2010. Payday is not until the first week in January 2011. What is the effect of the December 31, 2010 adjusting entry on total shareholders' equity?
A) increase
B) decrease
C) no effect
D) changed in a way that cannot be predicted
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Q. 2) If the person who is named as payee on a check transfers the right to receive the money by signing his/her name on the back of the check, the signature is called a
a. restrictive endorsement.
b. dishonored endorsement.
c. regular endorsement.
d. blank endorsement.
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Q. 3) Comparative balance sheets ________.
A) include balances of two consecutive years
B) include gross profit and operating income
C) report financial ratios for the current year which are compared to the prior year's
D) report revenues for both the current and previous years
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Q. 4) Which of the following items should not be included in the cost of ending merchandise inventory?
a. purchased units in transit, shipped FOB shipping point
b. purchased units in transit, shipped FOB destination
c. units on hand in the warehouse
d. sold units in transit, not invoiced, and shipped FOB destination
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Q. 5) River Runners, Inc. reported the following information in its financials for the year ended December 31, 2012:
Dividends 3,000
Net Income 45,000
Total expenses 50,000
Retained earnings - beginning balance Jan. 1, 2012 30,000
Accounts receivable 20,000
1. What were the company's revenues?
2. How much of the past profits have been kept by the company as of December 31?
3. How much do customers owe River Runners as of December 31, 2012?
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Q. 6) According to the COSO Fraudulent Financial Reporting 1998- 2007 update:
a. The most common fraud scheme used was improper revenue recognition.
b. Most companies engaged in fraudulent activities were able to recover and resume operations.
c. CEO's and CFO's were named by the SEC for involvement in approximately 50 of fraud cases.
d. All of the above.
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