# accounting questions

Questions 1 to 25: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer. 1. Mia Kaminsky wants to attend Riverside Community College. She’ll need to have $25,000 six years from today. Mia is wondering what she’ll have to put in the bank today so that she’ll have $25,000 six years from now. Her bank pays 5% compounded semiannually. Using the tables in the Business Math Handbook that accompanies the course textbook, determine the amount Mia needs to deposit today. A. $33,622 B. $33,226 C. $18,590 D. $18,950 2. Burton Bush wants to retire in Arizona when he is 80 years of age. Burton, who is now 55, believes he will need $400,000 to retire comfortably. To date, he has set aside no retirement money. If he gets an interest rate of 6% compounded annually, he will have to invest today. Using the tables in the Business Math Handbook that accompanies the course textbook, determine how much he must invest. A. $93,200 B. $96,500 C. $69,900 D. $92,300 3. FUTA tax is paid A. by an employee. B. by the employer. C. by both the employee and the employer. D. only weekly. 4. An invoice dated March 6 with terms of 1/10, EOM results in the end of the discount period on A. April 10. B. May 30. C. May 31. D. April 30. 5. Fathers’ Day suits were advertised for 35% off the regular price. A suit regularly sells for $210. What is the amount of markdown? A. $163.50 B. $136.50 C. $73.50 D. $37.50 6. 200 days from March 3 is A. September 20. B. September 18. C. September 19. D. September 17. 7. What is the net price equivalent rate of 9/15/18? A. .63573 B. .36573 C. .36427 D. .63427 8. If the net price of a stove is $900 and the trade discount rate is 40%, then the list price is A. $1,500. B. $3,600. C. $1,260. D. $2,250. 9. The taxable earnings column of a payroll register records A. what wages will be taxed. B. the actual tax. C. the estimated tax. D. wages, actual tax, and estimated tax. 10. Jane is having difficulty deciding whether to put her savings in the Mystic Bank or in the Four Rivers Bank. Mystic offers a 12% rate compounded quarterly, and Four Rivers offers 14% compounded semiannually. Jane has $40,000 to invest and expects to withdraw the money at the end of five years. Using the tables in the Business Math Handbook that accompanies the course textbook, determine which one of the following is the best deal. A. Four Rivers for first two years B. Mystic C. Four Rivers D. Mystic for last two years 11. Lee Wong is a sales clerk at Sears. She is paid $8.00 per hour plus a commission of 4% on all sales. Assuming Lee works 39 hours and has sales of $4,000, her gross pay is A. $472. B. $312. C. $427. D. $321. 12. The percentage method aids in calculating A. FIT. B. SUTA. C. FICA. D. FUTA. 13. (1 + markup percent on cost) × cost equals the A. cost at retail. B. markup. C. cost at wholesale. D. selling price. 14. Anne Katz, the owner of Katz Sport Shop, lends $8,000 to Shelley Slater to help her open an art shop. Shelley plans to repay Anne at the end of eight years with interest compounded semiannually at 8%. Using the tables in the Business Math Handbook that accompanies the course textbook, you can determine that at the end of eight years Anne will receive A. $14,484. B. $16,857. C. $16,587. D. $14,984. 15. At the end of the summer, Walgreens advertised blow-up pools for 66% off the regular price. Jeff Jones saw a pool with a regular price of $49.99. What is the dollar markdown? A. $32.99 B. $33.39 C. $33.99 D. $39.29 16. Bill’s Furrier marks up mink coats $3,000. This represents a 50% markup on cost. What is the cost of the coats? A. $1,500. B. $6,000. C. $9,000. D. $4,500. 17. What is the effective rate of a $30,000 non-interest-bearing simple discount 5%, 60-day note? A. 5.04% B. 5% C. 6.0% D. 5.14% 18. Tiffany purchased a $10,000, 13-week Treasury bill that’s paying 2.25%. What is the effective rate on this T-bill? A. 2.0% B. 2.2% C. 2.7% D. 2.26% 19. Setting a price on perishable items does not include calculating A. a selling price per dozen. B. a selling price per day. C. the total selling price. D. the total cost. 20. A simple discount note results in A. interest that’s deducted when note is paid back. B. the same interest costs as a simple interest note. C. lower interest costs than a simple interest note. D. interest that’s deducted in advance. 21. How do Federal Reserve banks, as well as the federal government, typically calculate simple interest? A. Using 30 days in each month B. Based on ordinary interest C. Based on exact interest D. Using 31 days in each month 22. What is the single equivalent discount rate of the trade discount 5/4/1? A. .09712 B. .90288 C. .99998 D. .00002 23. Which one of the following statements is true about the U.S. Rule? End of exam A. It allows borrowers to receive interest credit. B. It’s never used by banks. C. It’s used by only banks. D. It’s hardly used today. 24. With interest of $1,832.00 and a principal of $16,000 for 206 days, use the ordinary interest method to determine the rate. A. 20% B. 10% C. 2% D. 12% 25. A video game sells at Arnolds for $14.99. Arnold’s marks the game up at 40% of the selling price. What is the cost of the game to Arnold? A. $9.10 B. $8.99 C. $6.00 D. $6.50