accounting questions

1. Use the following information and the tables in the Business Math Handbook that accompanies the course textbook to answer the question. $140.10 per month Cash price: $5,600 Down payment: $0 Cash or trade months with bank-approved credit; amount financed: $5,600 Finance charge: $2,806 Total payments: $8,406 What is the APR by table lookup? A. 17.25%–17.50% B. 16.50%–16.75% C. 16.75%–17.00% D. 17.00%–17.25% 2. In calculating the daily balance, cash advances are A. always added in. B. sometimes added in. C. always subtracted out. D. sometimes subtracted out. 3. Which one of the following methods is not based on the passage of time? A. Units-of-production method B. Straight-line method C. None of these D. Declining-balance method 4. Dan Miller bought a new Toyota truck for $28,000. Dan made a down payment of $6,000 and paid $390 monthly for 70 months. What is the total finance charge? A. $13,300 B. $11,300 C. $5,300 D. $27,300 5. Given a mortgage of $48,000 for 15 years with a rate of 11%, what are the total finance charges? A. $545.76 B. $5,023.68 C. $50,236.80 D. $54,576 6. Graduated payments result in the borrower paying A. less at the end of the mortgage. B. more at the beginning of the mortgage. C. the mortgage at 1 ∕2 the standard rate. D. less at the beginning of the mortgage. 7. John Sullivan bought a new Brunswick boat for $17,000. He made a $2,500 down payment on it. The bank's loan was for 60 months, and the finance charges totaled $4,900. What is his monthly payment? A. $332.33 B. $313.33 C. $232.33 D. $323.33 8. Connie made deposits of $2000 at the beginning of each year for four years. The rate she earned is 5% annually. What is the value of Connie's account in four years? A. $11,051.00 B. $9,051.20 C. $8,260.00 D. $8,260.20 9. Jen purchased a condo in Naples, Florida, for $699,000. She put 20% down and financed the rest at 5% for 35 years. What are Jen's total finance charges? A. $606,823.20 B. $600,000.00 C. $457,425.60 D. $626,863.20 10. What is a sinking fund? A. It doesn't compound its money. B. It aids in meeting a future obligation. C. It's not really an annuity. D. It requires one lump sum payment at the beginning. 11. Lee Company has a current ratio of 2.65. The acid test ratio is 2.01. The current liabilities of Lee are $45,000. Assuming there are no prepaid expenses, the dollar amount of merchandise inventory is A. $28,008. B. $90,450. C. $90,540. D. $28,800. 12. The average daily balance is equal to the sum of daily balances A. multiplied by number of days in billing cycle. B. divided by number of days in billing cycle. C. minus number of days in billing cycle. D. plus number of days in billing cycle. 13. When are annuity due payments made? A. At the end of the period B. Yearly C. Monthly D. At the beginning of the period 14. A truck costs $35,000 with a residual value of $2,000. Its service life is five years. Using the decliningbalance method at twice the straight-line rate, the book value at the end of year 2 is A. $33,000. B. $12,600. C. $22,000. D. $35,000. 15. Federal Express bought material handling equipment for its hub operations that cost $180,000. Using the MACRS, what is the depreciation expense in year 3 (using a five-year class)? A. $34,560 B. $15,360 C. $40,000 D. $43,560 16. A $104,000 selling price with $24,000 down at 81 ∕2% for 25 years results in a monthly payment of A. $546.06. B. $654.60. C. $645.60. D. $644.80. 17. Megan Mei is charged 2 points on a $120,000 loan at the time of closing. The original price of the home before the down payment was $140,000. How much do the points in dollars cost Megan? A. $4,200 B. $2,400 C. $2,800 D. $8,200 18. Ted Williams made deposits of $500 at the end of each year for eight years. The rate is 8% compounded annually. Using the tables in the Business Math Handbook that accompanies the course textbook, calculate the value of Ted's annuity at the end of eight years. A. $5,318.30 B. $2,873.30 C. $4,318.30 D. $2,837.03 19. In an ordinary annuity, when does the interest on a yearly investment start building interest? A. During the first period B. At the end of the first period C. At the beginning of the first period D. After the second period ends 20. With a mortgage of $48,000 for 15 years with a rate of 11%, what are the total finance charges? A. $5,023.68 B. 545.76 C. $54,576 D. $50,236.80 21. A new piece of equipment costs $18,000 with a residual value of $600 and an estimated useful life of five years. Assuming twice the straight-line rate, the book value at the end of year 2 using the decliningbalance method is A. $7,200. End of exam B. $18,000. C. $11,520. D. $6,480. 22. The acid test ratio does not include A. supplies. B. cash. C. accounts receivable. D. inventory. 23. Open credit in a revolving charge plan results in A. as many charged purchases till credit limit is reached. B. the U.S. Rule being applied to each purchase. C. as many cash purchases till credit limit is reached. D. one purchase per month. 24. At the beginning of each year for 14 years, Sherry Kardell invested $400 that earns 10% annually. What is the future value of Sherry's account in 14 years? A. $12,709 B. $14,000 C. $12,309 D. $13,100 25. What does an amortization schedule show? A. The portion of payment broken down to interest and principal B. The increase in loan outstanding C. The balance of interest outstanding D. The increase to principal