Question

33. If you put $200 into a savings account that pays annual compound interest of 8% per year and then withdraw the money two years later, you will earn interest of $32.
    1. False                                                                      B) True

34. In the Allowance Method when we we collect on a previously written off receivable
    1. Assets stay the same, Net Income stays the same.
    2. Assets decrease, Net Income decreases
    3. Assets increase, Net Income increases.
    4. It depends
35. If your employer declares bankruptcy, this can have a major effect on your pension if you are in a
    1. Either plan                                                            B) Defined Benefit Plan

36. C) Neither Plan                                                          D) Defined Contribution Plan

37. The market will generally react to dividends on which day?
    1. Declaration Date                       B) Payment Date C) Record Date
38. Which of the following expenses would you find in a factory
    1. Electric expense                                                   B) Both

39. C) Labor expense                                                      D) Neither

63. What is usually a better predictor of future cash flow to the firm?
    1. Past Income                                                          B) Past Cash Flows

71. When a company pays cash for equipment, what is the effect on the accounting equation for that company?
    1. Increase assets and increase stockholders' equity.
    2. Decrease assets and decrease liabilities.
    3. No change.
    4. Increase assets and increase liabilities.

Answer 1

Ans 1
Compounded interest	in $
1st year 200*8%	16
2nd year (200+16)*8%	17.28
Total interest	33.28
A) False
ans 2
Option A Assets stay the same net income stays the same
As entries are
1) Accounts Receivable Dr
Allowance for doubtful accounts cr
and than
Cash DR
Accounts receivable Cr
ans 3
c)Neither plan
ans 4 A) Declaration date
the market will react on declaration date.
ans 5 Both
As electric expense is manufacturing overhead and labor is also direct
cost.
ans 6
a) Past income
ans 7
C) No change
as equipment asset is incraesed and cash (asset) is decreased