Info
Warning
Danger

Study Resources (Accounting)

64) All Sports Company publishes a monthly magazine. Subscriptions to the magazine cost $20 per year. During November 2012, All Sports sells 15,000 subscriptions beginning with the December issue. Required: a.Prepare the entry in November to record the receipt of the subscriptions. b.Prepare the adjusting entry at December 31, 2012. 65) Wildcat Computers sells.
3 Views
View Answer
9.3   Learning Objective 9-3 1) Earnings per share is the amount of a company's net income divided by the par value of its stock. 2) Earnings per share is a standard measure of operating performance that applies to companies of different sizes and from different industries. 3) The times-interest-earned ratio is calculated by.
8 Views
View Answer
16) East-West Airlines is planning on leasing an aircraft. East-West does not receive title to the aircraft during or at the end of the lease period. Also, the lease does not contain a bargain purchase option. Using the lease information shown below indicate whether the lease is a capital lease.
3 Views
View Answer
31) The stated interest rate is always declared as a(n): A) monthly rate. B) daily rate. C) semiannual rate. D) annual rate. 32) The organization that purchases the bonds from an issuing corporation and resells them to its clients or sells the bonds for a commission is the: A) underwriter. B) bank. C) stockholders. D) bondholders. 33) Bonds in a.
3 Views
View Answer
9.5   Learning Objective 9-5 1) Current maturities of long-term debt are reported separately from long-term liabilities. 2) Long-term liabilities are reported in the same section as current liabilities on the balance sheet. 3) Details about a company's liabilities should be included in the notes to the financial statements. 4) A company must include all.
4 Views
View Answer
11.1   Learning Objective 11-1 1) The revenue recognition principle requires that sales revenues be recognized when they are earned. 2) U.S. GAAP and IFRS do not have the same revenue recognition criteria. 3) Recognizing revenue before it is earned is a major source of financial statement fraud. 4) Financial statement fraud does not include.
8 Views
View Answer
61) Sage Company issued $600,000, 8%, 5-year bonds for 106, with interest paid annually. Assuming straight-line amortization, what is the carrying value of the bonds after one year? A) $636,000 B) $600,000 C) $628,800 D) $648,000 62) The journal entry to record payment of bond payable at maturity will include a: A) debit to bonds payable,.
3 Views
View Answer
11.2   Learning Objective 11-2 1) In a foreign-currency transaction, all funds must be converted to U.S. dollars for reporting purposes. 2) All foreign transactions will result in a foreign-currency exchange rate gain or loss. 3) The foreign-currency transaction gain account holds gains and losses on transactions settled in a foreign currency. 4) The net.
2 Views
View Answer
11) The chairperson of the board of directors has the title of: A) Chief Financial Officer (CFO). B) President. C) Chief Executive Officer (CEO). D) Chief Operating Officer (COO). 12) The authority structure of a corporation would show the: A) board of directors delegating to the stockholders. B) president delegating to the board of directors. C) chief financial.
4 Views
View Answer
41) Current liabilities fall into two categories which are referred to as: A) contingent liabilities and contra-liabilities. B) contingent liabilities and noncontingent liabilities. C) unearned liabilities and contra-liabilities. D) liabilities of a known amount and estimated liabilities. 42) The current portion of long-term debt should: A) be reclassified as a current liability. B) be paid immediately. C) be.
2 Views
View Answer
11) A 2-for-1 stock split will increase total stockholders' equity. 12) If a company has a deficit in retained earnings: A) then retained earnings has a credit balance. B) the deficit is subtracted to determine total stockholders' equity. C) the deficit is added to determine total stockholders' equity. D) then the corporation's lifetime earnings exceed.
2 Views
View Answer
11) Revenue fraud includes all of the following EXCEPT: A) reporting revenue when goods have not yet been delivered. B) channel stuffing. C) sales to nonexistent customers. D) recognizing revenue when earned. 12) Steadily decreasing cost of goods sold as a percentage of net sales is a sign of: A) increasing earnings quality. B) decreasing earnings quality. C).
3 Views
View Answer
20) Indicate whether the following characteristics of the corporate form of business are considered to be an advantage or disadvantage. 1.Separate legal entity 2.Ability to raise capital 3.Continuous life 4.Double taxation of corporate earnings 5.Separation of ownership and management 6.Ease of ownership transfer 7.Government regulation 8.Limited liability of stockholders .
3 Views
View Answer
11.3   Learning Objective 11-3 1) Income tax expense helps measure income from operations. 2) Income tax payable is the amount of tax to be paid to the government in the next period. 3) Income tax payable is computed by multiplying income before income taxes per the income statement by the income tax rate. 4).
3 Views
View Answer
107) On January 1, 2012, Peterson Corporation issued $100,000, 9%, 5-year bonds with semiannual interest payments on June 30 and December 31. The bonds were issued at $93,529 yielding an effective-interest rate of 10%. Peterson uses the effective-interest method of amortization. Prepare the journal entries that Peterson would make on.
21 Views
View Answer
11) Employee compensation is a major expense for most service companies. 12) Unearned revenue will be zero when a company has earned all of the revenue it had collected in advance. 13) The exact amount of warranty expense cannot be determined, so businesses must rely on estimates. 14) The current portion of a.
4 Views
View Answer
10.4   Learning Objective 10-4 1) A debit balance in Retained Earnings indicates that a company's lifetime earnings exceeded its lifetime losses and dividends issued. 2) The retained earnings account is not a reservoir of cash for paying dividends to the stockholders. 3) A debit balance in the Retained Earnings account indicates a deficit. 4).
2 Views
View Answer
43) On February 4, Clark Corporation's stockholders' equity section appears as follows: Common Stock, $1 par value$ 50,000 Paid-in Capital in Excess of Par$ 15,000 Retained Earnings$100,000      Total Stockholders' Equity$165,000 On February 4, Clark Corporation declares and distributes a 10% stock dividend when the market value of the stock is $5. Show the balances.
2 Views
View Answer
10.1    Objective 10-1 1) A corporation is not an entity that is separate from its owners. 2) A corporation acts under its own name and not the name of its stockholders. 3) If a corporation pays taxes on its income, then the stockholders will not have to pay taxes on the dividends received.
10 Views
View Answer
31) When a stock dividend is received, the stockholder would: A) own more shares of stock. B) anticipate the par value of the stock to increase. C) expect the market price per share to increase. D) expect retained earnings to decrease. 32) A stock dividend is considered small when it is a dividend of: A) less.
3 Views
View Answer
9.2   Learning Objective 9-2 1) Corporations borrow large amounts of money by issuing (selling) bonds to the public. 2) If bonds are issued at a premium, the carrying value of the bonds will be greater than the face value of the bonds for all periods prior to the bond maturity date. 3) If.
2 Views
View Answer
21) Before a company can pay dividends to the common stockholders, the owners of cumulative preferred stock must receive: A) the current year's dividends, but not dividends in arrears. B) neither the current year's dividends nor dividends in arrears. C) all dividends in arrears plus the current year's dividends. D) all dividends in arrears,.
2 Views
View Answer
31) Estimated warranty payable are reported on the balance sheet as: A) administrative expenses. B) a long-term liability. C) a current liability. D) part of cost of goods sold. 32) The accounting principle requiring that a company record the warranty expense in the same period that it records sales revenue is the: A) going concern principle. B).
2 Views
View Answer
10.3   Learning Objective 10-3 1) The purchase of treasury stock by a corporation increases total assets and stockholders' equity. 2) The purchase of treasury stock has the same effect of issuing stock. 3) Treasury stock is a contra-stockholders' equity account. 4) Treasury stock increases the number of shares outstanding. 5) Treasury stock belongs in the.
2 Views
View Answer
21) Current earnings per share information is as follows: Continuing operations $3.75 Discontinued operations 1.05 Extraordinary items 0.45 $5.25 The interest capitalization rate is 7.5%. How much should an investor pay for a share of stock? A) $50.00 B) $58.00 C) $64.00 D) $70.00 22) The gain or loss on the disposal of a business segment is shown on the income statement as: A).
2 Views
View Answer
10.2   Learning Objective 10-2 1) Corporations may sell stock directly to the stockholders. 2) A Loss on Issue of Common Stock indicates that the stock was sold for less than its par value. 3) A company can sell stock only for cash. 4) Assets, other than cash, should be recorded at the stockholders' cost.
3 Views
View Answer
15) Diagnostic Corporation is considering two plans for raising $2,000,000. The first plan involves the sale of 7%, 10-year bonds at the face value of $2,000,000. The second plan involves selling 100,000 shares of $20 par value common stock. Diagnostic Corporation currently has 150,000 shares of stock outstanding and net.
3 Views
View Answer
21) Wilson Corporation had the following transactions: 1.Issued 7,000 shares of common stock with a stated value of $15 for $155,000. 2.Issued 3,000 shares of $100 par value preferred stock at $117 for cash. Required:  Prepare the journal entries for the above transactions. 22) During the month of February, B & B Builders, Inc..
2 Views
View Answer
10.6   Learning Objective 10-6 1) The purchase of treasury stock appears on the statement of cash flows as a financing activity. 2) A stock split appears on the statement of cash flows as a financing activity. 3) On the Stockholders' Equity section of the Balance Sheet, Common Stock is listed before Preferred Stock. 4).
3 Views
View Answer
71) ABC Corporation issued $600,000, 10%, 5-year bonds on January 1, 2012 for $612,000 when the market interest rate was 8%. Interest is paid semiannually on January 1 and July 1. The corporation uses the effective-interest method to amortize bond premium. The amount of bond interest expense recognized on July.
7 Views
View Answer
51) The normal balance of the discount on the bonds payable account and the premium on the bonds payable account are respectively: A) debit, credit. B) credit, credit. C) debit, debit. D) credit, debit. 52) In the balance sheet, the account, Discount on Bonds Payable, is: A) added to bonds payable. B) deducted from bonds payable. C) classified.
3 Views
View Answer
11) Income tax expense appears on the: A) tax return. B) statement of stockholders' equity. C) income statement. D) balance sheet. 12) Income tax payable appears on the: A) tax return. B) statement of stockholders' equity. C) income statement. D) balance sheet. 13) The amount of tax to pay the government in the next period is known as: A) deferred tax.
8 Views
View Answer
51) Hoover Company has a long-term note payable for $300,000 on January 1, 2012. Each month the company is required to pay $75,000 on the note. How will this note be reported on January 31, 2012? A) Long-term liability, $300,000 B) Long-term liability, $225,000 C) Current liability, $75,000; long-term liability, $225,000 D) Current liability,.
3 Views
View Answer
57) On December 1, Goliath Corporation borrowed $10,000 on a 90-day, 6% note. Goliath Corporation's year end is December 31. Prepare the journal entries to record the issuance of the note, the accrual of interest at year end, and the payment of the note. 58) On December 1, Goliath Corporation borrowed.
2 Views
View Answer
11) Green Corporation purchases 40,000 shares of its own $10 par value common stock for $25 per share. What will be the effect on stockholders' equity? A) Increase $400,000 B) Increase $1,000,000 C) Decrease $400,000 D) Decrease $1,000,000 12) If treasury stock is sold at a price greater than its reacquisition costs, the difference is: A).
3 Views
View Answer