ms4003_2023T3_Q1_NA.pdf
Financial Forensics · Quiz 1 · Sep 2023
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Questions and published explanations below are available without starting a test. Some questions may not have a published solution yet.
Question 56 MCQ · 1.0 marks
Based on the following case study, answer the given subquestions.
SMOKY VALLEY CAFÉ2
On 12 August 1946, three people, who had previously been employed to wait on tables in one of
the cafes in Baxter, Oregon, formed a partnership. The eldest of the three was Mrs. Bevan, a
middle-aged widow. The other two were Mr. and Mrs. Elmer Maywood. The partnership lasted for
slightly more than four months, and in connection with its dissolution the preparation of a balance
sheet became necessary.
Each of the partners contributed $2,000 cash, a total of $6,000. On 12 August, the partnership
purchased the Smoky Valley Café for $16,000. The purchase price included land valued at $2,500,
improvements to land at $2,000, building $10,500, and café equipment at $1,000. The partnership
made a down payment of $4,500 (from its $6,000 cash) and signed a mortgage for the balance of
the $16,000. The doors of the café were opened for business shortly after 12 August.
One of the things that made this particular piece of property attractive to them was the fact that
the building contained suitable living accommodations. One of the rooms was occupied by Mrs.
Bevan and another by the Maywoods.
The Maywoods and Mrs. Bevan agreed on a division of duties and responsibilities which would
allow them to keep the café open twenty four hours a day. They agreed that Mrs. Bevan would
operate the kitchen, Mrs. Maywood would have charge of the dining room, and that Mr. Maywood
would attend the bar. Mrs. Bevan agreed to keep the accounting records. She was willing to
perform this task because she was vitally interested in making the business a success. She had
invested the proceeds from the sale of her modest home and from her husband’s insurance policy
in the venture. If it failed, the major part of her financial resources would be lost.
A beer license was granted by the state authorities. On August 15, the partnership sent a check for
$35 to the distributor who supplied beer. This $35 constituted a deposit on bottles and kegs
necessary for the operation of the bar and would be returned to the Smoky Valley Café after all
bottles and kegs had been returned to the beer distributor. The Smoky Valley Café was located on
a major highway, and a great deal of business was obtained from truck drivers. In October, the
partners decided that to continue to offer their patrons quality food, they would have to add to
their equipment. This new equipment cost $415.95, and because the supplier of the equipment
was unimpressed with the firm's credit rating ,the equipment was paid for in cash.
The month of November did not improve the cash position of the business. In fact a cash balance
became so low that Mrs. Bevan contributed additional cash to the amount of $400.00 to the
business. She had hopes , however ,that the future would prove to be more profitable.
As on Aug 12\(^{th}\), 1946 if a balance sheet is created, what are the total assets and liabilities as on
Aug 12\(^{th}\) respectively:
Assets 17500$ and Liabilities 17500$
Assets 21000$ and Liabilities 21000$
Assets 17500$ and Liabilities 6000$
Assets 17500$ and Liabilities 11500$
A published solution is not available for this question yet.
Question 57 MCQ · 1.0 marks
Based on the following case study, answer the given subquestions.
SMOKY VALLEY CAFÉ2
On 12 August 1946, three people, who had previously been employed to wait on tables in one of
the cafes in Baxter, Oregon, formed a partnership. The eldest of the three was Mrs. Bevan, a
middle-aged widow. The other two were Mr. and Mrs. Elmer Maywood. The partnership lasted for
slightly more than four months, and in connection with its dissolution the preparation of a balance
sheet became necessary.
Each of the partners contributed $2,000 cash, a total of $6,000. On 12 August, the partnership
purchased the Smoky Valley Café for $16,000. The purchase price included land valued at $2,500,
improvements to land at $2,000, building $10,500, and café equipment at $1,000. The partnership
made a down payment of $4,500 (from its $6,000 cash) and signed a mortgage for the balance of
the $16,000. The doors of the café were opened for business shortly after 12 August.
One of the things that made this particular piece of property attractive to them was the fact that
the building contained suitable living accommodations. One of the rooms was occupied by Mrs.
Bevan and another by the Maywoods.
The Maywoods and Mrs. Bevan agreed on a division of duties and responsibilities which would
allow them to keep the café open twenty four hours a day. They agreed that Mrs. Bevan would
operate the kitchen, Mrs. Maywood would have charge of the dining room, and that Mr. Maywood
would attend the bar. Mrs. Bevan agreed to keep the accounting records. She was willing to
perform this task because she was vitally interested in making the business a success. She had
invested the proceeds from the sale of her modest home and from her husband’s insurance policy
in the venture. If it failed, the major part of her financial resources would be lost.
A beer license was granted by the state authorities. On August 15, the partnership sent a check for
$35 to the distributor who supplied beer. This $35 constituted a deposit on bottles and kegs
necessary for the operation of the bar and would be returned to the Smoky Valley Café after all
bottles and kegs had been returned to the beer distributor. The Smoky Valley Café was located on
a major highway, and a great deal of business was obtained from truck drivers. In October, the
partners decided that to continue to offer their patrons quality food, they would have to add to
their equipment. This new equipment cost $415.95, and because the supplier of the equipment
was unimpressed with the firm's credit rating ,the equipment was paid for in cash.
The month of November did not improve the cash position of the business. In fact a cash balance
became so low that Mrs. Bevan contributed additional cash to the amount of $400.00 to the
business. She had hopes , however ,that the future would prove to be more profitable.
The cash balance as on Aug 12\(^{th}\) 1946
1500$
[[IMAGE:67af32485e19bae7_5_0]] 2500$
4500$
6000$
A published solution is not available for this question yet.
Question 58 MCQ · 1.0 marks
Based on the following case study, answer the given subquestions.
SMOKY VALLEY CAFÉ2
On 12 August 1946, three people, who had previously been employed to wait on tables in one of
the cafes in Baxter, Oregon, formed a partnership. The eldest of the three was Mrs. Bevan, a
middle-aged widow. The other two were Mr. and Mrs. Elmer Maywood. The partnership lasted for
slightly more than four months, and in connection with its dissolution the preparation of a balance
sheet became necessary.
Each of the partners contributed $2,000 cash, a total of $6,000. On 12 August, the partnership
purchased the Smoky Valley Café for $16,000. The purchase price included land valued at $2,500,
improvements to land at $2,000, building $10,500, and café equipment at $1,000. The partnership
made a down payment of $4,500 (from its $6,000 cash) and signed a mortgage for the balance of
the $16,000. The doors of the café were opened for business shortly after 12 August.
One of the things that made this particular piece of property attractive to them was the fact that
the building contained suitable living accommodations. One of the rooms was occupied by Mrs.
Bevan and another by the Maywoods.
The Maywoods and Mrs. Bevan agreed on a division of duties and responsibilities which would
allow them to keep the café open twenty four hours a day. They agreed that Mrs. Bevan would
operate the kitchen, Mrs. Maywood would have charge of the dining room, and that Mr. Maywood
would attend the bar. Mrs. Bevan agreed to keep the accounting records. She was willing to
perform this task because she was vitally interested in making the business a success. She had
invested the proceeds from the sale of her modest home and from her husband’s insurance policy
in the venture. If it failed, the major part of her financial resources would be lost.
A beer license was granted by the state authorities. On August 15, the partnership sent a check for
$35 to the distributor who supplied beer. This $35 constituted a deposit on bottles and kegs
necessary for the operation of the bar and would be returned to the Smoky Valley Café after all
bottles and kegs had been returned to the beer distributor. The Smoky Valley Café was located on
a major highway, and a great deal of business was obtained from truck drivers. In October, the
partners decided that to continue to offer their patrons quality food, they would have to add to
their equipment. This new equipment cost $415.95, and because the supplier of the equipment
was unimpressed with the firm's credit rating ,the equipment was paid for in cash.
The month of November did not improve the cash position of the business. In fact a cash balance
became so low that Mrs. Bevan contributed additional cash to the amount of $400.00 to the
business. She had hopes , however ,that the future would prove to be more profitable.
On Aug 15\(^{th}\) 1946, there was security deposit of 35$ for beer license. How will it impact the
balance sheet:
Cash balance reduces by 35$ on Assets side
Liabilities increase by 35$ on Liabilities side
No change in cash balances on assets side
Balance sheet remains unchanged
A published solution is not available for this question yet.
Question 59 MCQ · 1.0 marks
Based on the following case study, answer the given subquestions.
SMOKY VALLEY CAFÉ2
On 12 August 1946, three people, who had previously been employed to wait on tables in one of
the cafes in Baxter, Oregon, formed a partnership. The eldest of the three was Mrs. Bevan, a
middle-aged widow. The other two were Mr. and Mrs. Elmer Maywood. The partnership lasted for
slightly more than four months, and in connection with its dissolution the preparation of a balance
sheet became necessary.
Each of the partners contributed $2,000 cash, a total of $6,000. On 12 August, the partnership
purchased the Smoky Valley Café for $16,000. The purchase price included land valued at $2,500,
improvements to land at $2,000, building $10,500, and café equipment at $1,000. The partnership
made a down payment of $4,500 (from its $6,000 cash) and signed a mortgage for the balance of
the $16,000. The doors of the café were opened for business shortly after 12 August.
One of the things that made this particular piece of property attractive to them was the fact that
the building contained suitable living accommodations. One of the rooms was occupied by Mrs.
Bevan and another by the Maywoods.
The Maywoods and Mrs. Bevan agreed on a division of duties and responsibilities which would
allow them to keep the café open twenty four hours a day. They agreed that Mrs. Bevan would
operate the kitchen, Mrs. Maywood would have charge of the dining room, and that Mr. Maywood
would attend the bar. Mrs. Bevan agreed to keep the accounting records. She was willing to
perform this task because she was vitally interested in making the business a success. She had
invested the proceeds from the sale of her modest home and from her husband’s insurance policy
in the venture. If it failed, the major part of her financial resources would be lost.
A beer license was granted by the state authorities. On August 15, the partnership sent a check for
$35 to the distributor who supplied beer. This $35 constituted a deposit on bottles and kegs
necessary for the operation of the bar and would be returned to the Smoky Valley Café after all
bottles and kegs had been returned to the beer distributor. The Smoky Valley Café was located on
a major highway, and a great deal of business was obtained from truck drivers. In October, the
partners decided that to continue to offer their patrons quality food, they would have to add to
their equipment. This new equipment cost $415.95, and because the supplier of the equipment
was unimpressed with the firm's credit rating ,the equipment was paid for in cash.
The month of November did not improve the cash position of the business. In fact a cash balance
became so low that Mrs. Bevan contributed additional cash to the amount of $400.00 to the
business. She had hopes , however ,that the future would prove to be more profitable.
In Oct there is new equipment added which costed 415.95$. The total assets on Assets side now
will be:
17915.95$
17084.95$
[[IMAGE:67af32485e19bae7_6_1]] 17500$
6000$
A published solution is not available for this question yet.
Question 60 MCQ · 1.0 marks
Based on the following case study, answer the given subquestions.
SMOKY VALLEY CAFÉ2
On 12 August 1946, three people, who had previously been employed to wait on tables in one of
the cafes in Baxter, Oregon, formed a partnership. The eldest of the three was Mrs. Bevan, a
middle-aged widow. The other two were Mr. and Mrs. Elmer Maywood. The partnership lasted for
slightly more than four months, and in connection with its dissolution the preparation of a balance
sheet became necessary.
Each of the partners contributed $2,000 cash, a total of $6,000. On 12 August, the partnership
purchased the Smoky Valley Café for $16,000. The purchase price included land valued at $2,500,
improvements to land at $2,000, building $10,500, and café equipment at $1,000. The partnership
made a down payment of $4,500 (from its $6,000 cash) and signed a mortgage for the balance of
the $16,000. The doors of the café were opened for business shortly after 12 August.
One of the things that made this particular piece of property attractive to them was the fact that
the building contained suitable living accommodations. One of the rooms was occupied by Mrs.
Bevan and another by the Maywoods.
The Maywoods and Mrs. Bevan agreed on a division of duties and responsibilities which would
allow them to keep the café open twenty four hours a day. They agreed that Mrs. Bevan would
operate the kitchen, Mrs. Maywood would have charge of the dining room, and that Mr. Maywood
would attend the bar. Mrs. Bevan agreed to keep the accounting records. She was willing to
perform this task because she was vitally interested in making the business a success. She had
invested the proceeds from the sale of her modest home and from her husband’s insurance policy
in the venture. If it failed, the major part of her financial resources would be lost.
A beer license was granted by the state authorities. On August 15, the partnership sent a check for
$35 to the distributor who supplied beer. This $35 constituted a deposit on bottles and kegs
necessary for the operation of the bar and would be returned to the Smoky Valley Café after all
bottles and kegs had been returned to the beer distributor. The Smoky Valley Café was located on
a major highway, and a great deal of business was obtained from truck drivers. In October, the
partners decided that to continue to offer their patrons quality food, they would have to add to
their equipment. This new equipment cost $415.95, and because the supplier of the equipment
was unimpressed with the firm's credit rating ,the equipment was paid for in cash.
The month of November did not improve the cash position of the business. In fact a cash balance
became so low that Mrs. Bevan contributed additional cash to the amount of $400.00 to the
business. She had hopes , however ,that the future would prove to be more profitable.
The cash balance in the balance sheet post the purchase of given equipment will be:
1049.05$
1435.05$
1435$
1880.95$
A published solution is not available for this question yet.
Question 61 MCQ · 1.0 marks
Based on the following case study, answer the given subquestions.
SMOKY VALLEY CAFÉ2
On 12 August 1946, three people, who had previously been employed to wait on tables in one of
the cafes in Baxter, Oregon, formed a partnership. The eldest of the three was Mrs. Bevan, a
middle-aged widow. The other two were Mr. and Mrs. Elmer Maywood. The partnership lasted for
slightly more than four months, and in connection with its dissolution the preparation of a balance
sheet became necessary.
Each of the partners contributed $2,000 cash, a total of $6,000. On 12 August, the partnership
purchased the Smoky Valley Café for $16,000. The purchase price included land valued at $2,500,
improvements to land at $2,000, building $10,500, and café equipment at $1,000. The partnership
made a down payment of $4,500 (from its $6,000 cash) and signed a mortgage for the balance of
the $16,000. The doors of the café were opened for business shortly after 12 August.
One of the things that made this particular piece of property attractive to them was the fact that
the building contained suitable living accommodations. One of the rooms was occupied by Mrs.
Bevan and another by the Maywoods.
The Maywoods and Mrs. Bevan agreed on a division of duties and responsibilities which would
allow them to keep the café open twenty four hours a day. They agreed that Mrs. Bevan would
operate the kitchen, Mrs. Maywood would have charge of the dining room, and that Mr. Maywood
would attend the bar. Mrs. Bevan agreed to keep the accounting records. She was willing to
perform this task because she was vitally interested in making the business a success. She had
invested the proceeds from the sale of her modest home and from her husband’s insurance policy
in the venture. If it failed, the major part of her financial resources would be lost.
A beer license was granted by the state authorities. On August 15, the partnership sent a check for
$35 to the distributor who supplied beer. This $35 constituted a deposit on bottles and kegs
necessary for the operation of the bar and would be returned to the Smoky Valley Café after all
bottles and kegs had been returned to the beer distributor. The Smoky Valley Café was located on
a major highway, and a great deal of business was obtained from truck drivers. In October, the
partners decided that to continue to offer their patrons quality food, they would have to add to
their equipment. This new equipment cost $415.95, and because the supplier of the equipment
was unimpressed with the firm's credit rating ,the equipment was paid for in cash.
The month of November did not improve the cash position of the business. In fact a cash balance
became so low that Mrs. Bevan contributed additional cash to the amount of $400.00 to the
business. She had hopes , however ,that the future would prove to be more profitable.
In November as seen, Mrs Bevan added another 400$, how will it impact the Balance sheet?
Both Assets and Liabilities read 17900$
Both Assets and Liabilities read 17100$
Assets increase by 400$ and Liabilities remain unchanged
Assets remain unchanged and Liabilities increase by 400$
A published solution is not available for this question yet.
Question 62 MCQ · 1.0 marks
What is the primary purpose of a balance sheet in financial accounting?
To calculate income
To show the company's financial position at a specific point in time
To track daily expenses
To project future revenues
A published solution is not available for this question yet.
Question 63 MCQ · 1.0 marks
What financial statement is often used to analyze a company's profitability over a specific period?
Balance Sheet
Income Statement
Statement of Cash Flows
Statement of Changes in Equity
A published solution is not available for this question yet.
Question 64 MCQ · 1.0 marks
Which of the following is an example of an intangible asset that may be reported on a balance
sheet?
Buildings
Patents
Inventory
Land
A published solution is not available for this question yet.
Question 65 MCQ · 1.0 marks
Which financial statement provides information about a company's cash flows from operating,
investing, and financing activities?
Income Statement
Statement of Cash Flows
Statement of Changes in Equity
Statement of Financial Position
A published solution is not available for this question yet.
Question 66 MCQ · 1.0 marks
At the beginning of the month the company hired workers and employees for a total monthly
remuneration of ₹ 75,000 payable at the end of each month. How would this transaction reflect in
the income statement and balance sheet at the beginning of the month?
Expense will increase by ₹ 75,000 and liabilities will also increase by equal
amount
Expense will increase by ₹ 75000 and cash will decrease by the equal amount
There will be no effect on both the statements
Only expenses will increase by ₹ 75000
A published solution is not available for this question yet.
Question 67 MCQ · 1.0 marks
Mr. Steven started a furniture business with ₹ 55,00,000 as capital. 40% of the amount was
brought in cash and the remaining was kept in a bank account in the name of the business. What
would be the total of assets in the Balance sheet?
₹ 27,50,000
₹ 33,00,000
₹ 22,00,000
₹ 55,00,000
A published solution is not available for this question yet.
Question 68 MCQ · 1.0 marks
All of the following are long-term liabilities except:
Bonds payable
Current maturities of bank loan
Mortgage payable
Lease liabilities
A published solution is not available for this question yet.
Question 69 MCQ · 1.0 marks
Based on the following information, answer the given subquestions.
[[IMAGE:67af32485e19bae7_11_2]]
What is the cash flow from operating activities?
₹ 37,164
₹ 42,299
₹ (42,299)
₹ (37,164)
A published solution is not available for this question yet.
Question 70 MCQ · 1.0 marks
Based on the following information, answer the given subquestions.
[[IMAGE:67af32485e19bae7_11_2]]
What is the cash flow from financing activities
₹ 1,128
₹ 1082
₹ (805)
₹ 715
A published solution is not available for this question yet.
Question 71 MCQ · 1.0 marks
Based on the following information, answer the given subquestions.
[[IMAGE:67af32485e19bae7_11_2]]
What is the cash flow from investing activities
₹ 7,113
₹ 6,042
₹ 6,261
₹ 852
A published solution is not available for this question yet.
Question 72 MCQ · 1.0 marks
Based on the following information, answer the given subquestions.
[[IMAGE:67af32485e19bae7_11_2]]
What is the total cash flow of the company for the year?
₹ 43,866
₹ 51,194
₹ (34,910)
₹ 43,921
A published solution is not available for this question yet.
Question 73 NAT · 0.5 marks
[[IMAGE:67af32485e19bae7_13_3]]
Based on the above data, answer the given subquestions.
Enter the correct answer for **Blank A**
A published solution is not available for this question yet.
Question 74 NAT · 0.5 marks
[[IMAGE:67af32485e19bae7_13_3]]
Based on the above data, answer the given subquestions.
Enter the correct answer for **Blank B**
A published solution is not available for this question yet.
Question 75 NAT · 0.5 marks
[[IMAGE:67af32485e19bae7_13_3]]
Based on the above data, answer the given subquestions.
Enter the correct answer for **Blank C**
A published solution is not available for this question yet.
Question 76 NAT · 0.5 marks
[[IMAGE:67af32485e19bae7_13_3]]
Based on the above data, answer the given subquestions.
Enter the correct answer for **Blank D**
A published solution is not available for this question yet.
Question 77 NAT · 0.5 marks
[[IMAGE:67af32485e19bae7_13_3]]
Based on the above data, answer the given subquestions.
Enter the correct answer for **Blank E**
A published solution is not available for this question yet.
Question 78 NAT · 0.5 marks
[[IMAGE:67af32485e19bae7_13_3]]
Based on the above data, answer the given subquestions.
Enter the correct answer for **Blank F**
A published solution is not available for this question yet.
Question 79 NAT · 0.5 marks
[[IMAGE:67af32485e19bae7_13_3]]
Based on the above data, answer the given subquestions.
Enter the correct answer for **Blank G**
A published solution is not available for this question yet.
Question 80 NAT · 0.5 marks
[[IMAGE:67af32485e19bae7_13_3]]
Based on the above data, answer the given subquestions.
Enter the correct answer for **Blank H**
A published solution is not available for this question yet.
Question 81 NAT · 0.5 marks
[[IMAGE:67af32485e19bae7_13_3]]
Based on the above data, answer the given subquestions.
Enter the correct answer for **Blank I**
A published solution is not available for this question yet.
Question 82 NAT · 0.5 marks
[[IMAGE:67af32485e19bae7_13_3]]
Based on the above data, answer the given subquestions.
Enter the correct answer for **Blank J**
A published solution is not available for this question yet.
Question 83 MCQ · 1.0 marks
Based on the following information, answer the given subquestions.
[[IMAGE:67af32485e19bae7_19_4]]
Total expenses for the month of April are
$27480
$28180
$28280
$28345
A published solution is not available for this question yet.
Question 84 MCQ · 1.0 marks
Based on the following information, answer the given subquestions.
[[IMAGE:67af32485e19bae7_19_4]]
Total Revenue for the month of April is
$33400
$12900
$53900
$28700
A published solution is not available for this question yet.
Question 85 MCQ · 1.0 marks
Based on the following information, answer the given subquestions.
[[IMAGE:67af32485e19bae7_19_4]]
Net profit for the month of April is:
$5920
$5275
$5322
$5800
**RL**
**Section Id :** 64065345317
**Section Number :** 5
A published solution is not available for this question yet.