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Multiple Choice Quiz
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1
Which one of the following is a current liability?
A)account receivable
B)mortgage payable over thirty years
C)account payable
D)inventory
E)retained earnings
2
Which of the following are components of stockholders' equity?
I. common stock
II. capital surplus
III. long-term debt
IV. retained earnings
A)I and IV only
B)I and II only
C)II and III only
D)II and IV only
E)I, II, and IV only
3
An asset which _____ is defined as a liquid asset.
A)cost less than its current value
B)declines in value each year
C)is used to manufacture a product
D)has a physical presence
E)is readily and easily converted to cash
4
DJ Companies sold $20,000 in stock and issued $15,000 in debt this past year. The firm also repaid $18,000 on its loans and paid $3,200 in interest. During the year, DJ Companies paid quarterly dividends which totaled to $8,000 for the year and earned a net income of $22,300. The beginning balances at the start of the year were:

Preferred stock - $10,000
Treasury stock - $5,000
Long-term debt - $41,000
Accumulated retained earnings - $78,600
Capital surplus - $22,300
Common stock - $50,000

What is the book value of stockholders' equity at the end of the year?
A)$177,900
B)$187,900
C)$185,200
D)$190,200
E)$200,200
5
The financial records of Taylor and Daughter, show current assets of $850 and net fixed assets of $2,450. The firm has $700 in liabilities, which is the amount the firm would need to pay today to extinguish its debt. The firm estimates that it could sell its current assets for $800 and its fixed assets for $1,990. What is the market value of the stockholders' equity?
A)$250
B)$800
C)$1,200
D)$2,090
E)$2,600
6
A firm's balance sheet shows current assets of $410, net fixed assets of $685, long-term debt of $320, and owners' equity of $590. What is the value of the firm's current liabilities?
A)$35
B)$165
C)$185
D)$225
E)$825
7
The balance sheet of the Wilson's Market shows current assets of $38,700. These assets could probably be sold today for $35,000 cash. The firm owes $32,600 to its short-term creditors and $52,000 to its long-term creditors. The equipment of the firm has a book value of $74,800 and a market value of $78,900. What is the book value of the stockholders' equity?
A)$400
B)$600
C)$1,300
D)$28,900
E)$29,300
8
Which one of the following is a long-term liability?
A)deferred taxes
B)accounts payable
C)capital surplus
D)notes payable
E)treasury stock
9
A firm has cash of $15, accounts payable of $18, inventory of $102, net fixed assets of $147, accounts receivable of $31, and stockholder's equity of $87. The current assets equal _____ and the long-term debt is:
A)$148; $187.
B)$148; $190.
C)$148; $208.
D)$295; $190.
E)$295; $208.
10
An accrued expense is classified as:
A)a current asset.
B)a fixed asset.
C)a current liability.
D)a long-term liability.
E)stockholders' equity.





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