Jenny's Bakery recently delivered a bad batch of cakes to a local restaurant. Jenny quickly refunded the cost of the cakes to the restaurant. Her accountant made a _____ to her Refunds of Sales account for this transaction:
(A)note
(B)debit
(C)credit
(D)cost adjustment
(E)deposit
If a share of cumulative preferred stock has a call price of $95 and has had four years of dividends of $5 each, what is the book value of that share of stock? Mark one answer:
(A)$95 (B)$100 (C)$115 (D)$105 (E)$110
Correct Answer: C
GAAP refers to: Mark one answer:
(A)General accounting assistance program (B)Generally accepted accounting principles (C)Generally acceptable account procedures (D)The theory that accounting and the general public look at financial statements differently
Correct Answer: B
Cartman's Cats has $1,000,000 in assets after purchasing Big Bertha's Birds, along with $500,000 in liabilities. It has 500 shares capital stock outstanding. What is the book value of each share of stock? Mark one answer:
(A)$1,000 (B)$50 (C)$500 (D)$2,000 (E)$500,000
Correct Answer: A
More CPA Exam Questions
- 1In the current year, Fitz, a single taxpayer, sustained a $48,000 loss on Code Sec. 1244 stock in JJJ Corp., a qualifying small business corporation, and a $20,000 loss on Code Sec. 1244 stock in MMM Corp., another qualifying small business corporation. What is the maximum amount of loss that Fitz can deduct for the current year?
- 2What is the difference between a balance sheet and a trial balance? Mark one answer:
- 3Retained earnings are revenue of a corporation that is:
- 4Larry, 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:
- 5King, CPA, was engaged to audit the financial statements of Newton Company after its fiscal year had ended. King neither observed the inventory count nor confirmed the receivables by direct communication with debtors, but was satisfied concerning both after applying alternative procedures.King’s auditor’s report most likely contained a(n)