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MGMT 200 EXAM 3 (PURDUE UNIVERSITY) NEWEST
2026 EXAM 3 AND PRACTICE EXAM 320 QUESTIONS
AND CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+||NEWEST
EXAM!!!
Brady's Inflation Needle Co. reports accounts receivable of
$100,000 in 2017 and $250,000 in 2018. Using horizontal
analysis, what would be the percentage increase or
decrease in accounts receivable?
A. 60% decrease
B. 60% increase
C. 150% decrease
D. 150% increase - ANSWER-d. 150% increase
what is the effect of the collection of accounts receivable
on the current ratio and net working capital, respectively?
a. increase current ratio, increase net working capital
b. increase current ratio, no effect on net working capital
c. no effect on current ratio, increase net working capital
d. no effect on current ratio, no effect on net working
capital - ANSWER-d. no effect on current ratio, no effect
on net working capital
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Liquidity is the ability to earn a satisfactory net income. (T
or F) - ANSWER-false
Allegheny Corporation has sales of $50,000 and sales
returns of $5,000. cost of goods sold was $40,000. what is
gross profit?
A. $5,000.
B. $10,000
C. $15,000
D. $95,000 - ANSWER-A. $5,000.
all publicly held corporations in the U.S. are regulated by
what government organization?
a. the financial accounting standards board
b. the commission on accounting procedures
c. the accounting principles board
d. the securities and exchange commission - ANSWER-d.
the securities and exchange commission
Advantages of the corporate form of business include
which of the following?
I. Ability to raise capital
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II. Ability to transfer ownership
III. More paperwork
IV. Limited Liability
V. Dividends are tax deductible
a. II and V
b. I, II, IV
c. II, IV, V
d. I, II, IV, V - ANSWER-b. I, II, IV
Which of the following is a reason that a corporation would
prefer to issue stock instead of bonds?
a. dividend payments can be deducted for income tax
purposes
b. expansion is accomplished without surrendering
ownership control
c. the risk of going bankrupt is less
d. all of these - ANSWER-c. the risk of going bankrupt is
less
the par value of shares issued is normally recorded in the
a. additional paid-in capital account
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b. retained earnings account
c. common stock accounts
d. asset account common stock - ANSWER-c. common
stock accounts
contributed capital is the amount stockholders have
invested in the company (T or F) - ANSWER-true
The number of shares outstanding is equal to the
number of shares issued minus the number of
shares repurchased. (T or F) - ANSWER-true
Meadows Farm, Inc. issues 5,000 shares of $1 par value
common stock for $10 per share, what would be the effect
on
the accounting equation?
a. Increase assets and increase liabilities
b. Increase assets and increase stockholders'
equity
c. Increase assets and increase revenue
d. Increase assets and decrease stockholders'
MGMT 200 EXAM 3 (PURDUE UNIVERSITY) NEWEST
2026 EXAM 3 AND PRACTICE EXAM 320 QUESTIONS
AND CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+||NEWEST
EXAM!!!
Brady's Inflation Needle Co. reports accounts receivable of
$100,000 in 2017 and $250,000 in 2018. Using horizontal
analysis, what would be the percentage increase or
decrease in accounts receivable?
A. 60% decrease
B. 60% increase
C. 150% decrease
D. 150% increase - ANSWER-d. 150% increase
what is the effect of the collection of accounts receivable
on the current ratio and net working capital, respectively?
a. increase current ratio, increase net working capital
b. increase current ratio, no effect on net working capital
c. no effect on current ratio, increase net working capital
d. no effect on current ratio, no effect on net working
capital - ANSWER-d. no effect on current ratio, no effect
on net working capital
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Liquidity is the ability to earn a satisfactory net income. (T
or F) - ANSWER-false
Allegheny Corporation has sales of $50,000 and sales
returns of $5,000. cost of goods sold was $40,000. what is
gross profit?
A. $5,000.
B. $10,000
C. $15,000
D. $95,000 - ANSWER-A. $5,000.
all publicly held corporations in the U.S. are regulated by
what government organization?
a. the financial accounting standards board
b. the commission on accounting procedures
c. the accounting principles board
d. the securities and exchange commission - ANSWER-d.
the securities and exchange commission
Advantages of the corporate form of business include
which of the following?
I. Ability to raise capital
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II. Ability to transfer ownership
III. More paperwork
IV. Limited Liability
V. Dividends are tax deductible
a. II and V
b. I, II, IV
c. II, IV, V
d. I, II, IV, V - ANSWER-b. I, II, IV
Which of the following is a reason that a corporation would
prefer to issue stock instead of bonds?
a. dividend payments can be deducted for income tax
purposes
b. expansion is accomplished without surrendering
ownership control
c. the risk of going bankrupt is less
d. all of these - ANSWER-c. the risk of going bankrupt is
less
the par value of shares issued is normally recorded in the
a. additional paid-in capital account
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b. retained earnings account
c. common stock accounts
d. asset account common stock - ANSWER-c. common
stock accounts
contributed capital is the amount stockholders have
invested in the company (T or F) - ANSWER-true
The number of shares outstanding is equal to the
number of shares issued minus the number of
shares repurchased. (T or F) - ANSWER-true
Meadows Farm, Inc. issues 5,000 shares of $1 par value
common stock for $10 per share, what would be the effect
on
the accounting equation?
a. Increase assets and increase liabilities
b. Increase assets and increase stockholders'
equity
c. Increase assets and increase revenue
d. Increase assets and decrease stockholders'
