In the statement of owner’s equity, owner’s equity or capital is calculated using: Mark one answer:
(A)Gross income
(B)The positive or negative cash flow figure from the statement of cash flows
(C)Assets
(D)Total income from operating activities
(E)Net income
A static budget contains which of the following amounts?
(A)Actual costs for actual output. (B)Actual costs for budgeted output. (C)Budgeted costs for actual output. (D)Budgeted costs for budgeted output.
Correct Answer: D
If an exempt organization is a corporation, the tax on unrelated business taxable income is
(A)Computed at corporate income tax rates. (B)Computed at rates applicable to trusts. (C)Credited against the tax on recognized capital gains. (D)Abated.
Correct Answer: A
Larry, who uses the accrual basis of accounting, hired an extra driver to help him make deliveries in December. The extra driver only works from December 1st through the 31st . Larry pays the driver on January 5th, but the expense is shown on the December income statement. Why? Mark one answer:
(A)Cost benefit analysis (B)Matching principle (C)Cost principle (D)Going concern principle (E)Gross profit margin analysis
Correct Answer: B
More CPA Exam Questions
- 1Bart's Brewskies saw sales of $50,000 in December-primarily due to New Year's Eve celebrations. Bart determined that 30% of his sales are paid in cash, while the rest are billed for their brewskies. Of the money owed, 40% is paid December, while the remaining is paid the following month. What is the increase of Accounts Receivable on New Year's Eve?
- 2During 2009, Bart's Brewskies saw a jump in accounts receivables. It went from $10,000 at year end in 2008 to $20,000 at year end in 2009. With the introduction of his newest brewskie, chocolate beer, Bart saw his sales skyrocket. In 2009, his sales were $120,000. How much cash did Bart's Brewskies take in for 2009? Mark one answer:
- 3In AICPA professional standards, the word should indicates an (a)
- 4Doug’s Doohickeys sells hardware. His sales have finally reached $1,000,000 annually after years of hard work. Now his accountant has discovered a mistake-Doug misclassified a $2 expense several months ago. His accountant decides to ignore it. What accounting concept does he use to justify this? Mark one answer:
- 5Cartman's Cats shows the following balances:(C)sh: $20,000(A)counts Receivable: $60,000(I)ventory: $80,000(A)counts Payable: $60,000 Wages Payable : $60,000 What is the quick ratio for the business? Mark one answer: