Question

1. Davis, Inc., a music gorup, entertained at a black-tie dinner dance on April 26, and collected its fee in full at the end of the evening. This transaction:

A. Causes an increase in Cash and Revenue

B. Causes an increase in Accounts Receivable and Revenue

C. Causes an increase in Unearned Revenue and Revenue

D. Causes an increase in Cash and Unearned Revenue

2. Tony's Market, which uses a perpetual inventory system, recorded the following chronological events involving a recent purchase of inventory:

Received goods for $30000, terms 2/10, n/30

Returned $800 of the shipment for credit

Paid the invoice within the discount period

As a result of these events, the company's inventory

A. Increased by $29200

B. Increased by $30000

C.Increased by $28616

D. Increased by $29400

3. The Sarbanes - Oxley Act of 2002 (SOX) had the following impact:

A. Senior executive management must certify financial statements

B. Senior management must certify that a system of internal control is in place and is constantly reviewed

C. Outside auditors needed to decrease their dependency on their clients

D. All of the Above

4. On March 31, Mayweather Corporation issued 120000 shares of $5 par common stock for $50 per share. On August 15, Mayweather's Balance Sheet showed 120000 shares issued and 100000 shares outstanding of the common stock. Mayweather declared a $0.20 per share dividend on Auguest 15. The total dividend declared by Mayweather would be:

A. $24000

B. $20000

C. $4000

D. Not enough information to answer the question

Answer 1

1. The answer is "A. Causes an increase in Cash and Revenue"

This is because the Davis, inc performed the service and collected its fee..so as a result cash and revenue increased.

2. The answer is "C.Increased by $28616" this is because discount earned is adjusted against the merchandise inventory. So the inventory is increased by = (30,000 - 800) x 0.98 = $28,616

3. The answer is "D. All of the Above" this is because the Sarbanes - Oxley Act of 2002 (SOX) had all the impacts mentioned.

4. The answer is "B. $20000" this is because dividend is declared on outstanding shares balance. So, dividend declared = 100,000 x 0.20 = $20,000.