ACC400 Part 1 Which of the following are principles of internal control? Part 2 8. What is the first forecast typically produced in a manufacturing environment? Part 3 12. Journalize issuance of common stock.

Part 1

1.  Which of the following are principles of internal control?  (Select all that apply)

a.  Having a yearly audit by an independent auditing firm

b.  Segregation of duties

c.  Documentation procedures

d.  Establishment of responsibility

e.  Physical, mechanical and electronic controls

2.  Which of the following belong in the current assets section of the balance sheet? (Select all that apply)

a.  Cash

b.  Short term investments

c.  Inventories

d.  Construction in process

e.  Prepaid expenses

3.  Characteristics of a bond include: (Select all that apply)

a.  Face value

b.  Maturity date

c.  Contractual interest rate

d.  A bond certificates

4.  Which statement(s) is(are) true regarding the Price-Earnings (PE) ratio? (Select all that apply)

a.  The ratio of price to earnings will earnings will be higher if investors think earnings will increase substantially in the future and are willing to pay more for stock

b.  The ratio of price to earnings will be lower if investors think earnings will not be strong

c.  The price-to-earnings ratio is of no importance to investors

d.  The price to earnings ratio takes earnings per share divided by cost of sales

5.  Which of the following are all examples of depreciation methods?  (Select all that apply)

a.  Straight-line

b.  Declining balance

c.  Remaining book value

d.  Sum-of-the-years digits

e.  Units of production

6.  For a lease to be classified as a capital lease, it must meet the following criteria.  (Select all that apply)

a.  Transfer ownership to lessee at the end of the lease term.

b.  Contains a bargain purchase option

c.  Lease term equals 90 percent or more of the estimated remaining economic life of the leased property

d.  The present value of the minimum lease payment equals or exceeds 90 percent of the fair value

e.  the asset is specific to the firm

7.  Which of the following are benefits of forecasting and budgeting?  (Select all that apply)

a.  Enhanced management responsibility

b.  Assignment of decision making responsibilities

c.  Coordination of activities

d.  Utilizes finance staff

e.  Used to evaluate performance of management

Part 2

8.  What is the first forecast typically produced in a manufacturing environment?

9.  Accumulated depreciation will be shown on the balance sheet in what section?

10.  What are the three main components of the balance sheet?

11.  Cash received as unearned revenue has what effect on the balance sheet?

Part 3

12.Journalize issuance of common stock.

During its first year of operations, Kayandare Industries had these transactions pertaining

to its common stock.

January 7   Issued 10,000 shares for cash at $18 per share

March 15   Issued 15,000 shares for cash at $25 per share

September 30   Issued 25,000 shares for cash at $30 per share

Required:

Journalize these transactions assuming that there is a stated value of $20 per share

Journalize these transactions assuming that there is no par value.