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Study Resources (Accounting)

54) On June 30, 2015, Roger Company showed the following data on the equity section of their balance sheet: Stockholders' equity Common stock, $1 par 190,000 shares authorized, 140,000 shares issued and outstanding $140,000 Paid-in capital in excess of par—Common 260,000 Retained earnings 940,000 Total stockholder's equity $1,340,000 On July 1, 2015, Roger declared and distributed a 5% stock dividend. The market.
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  Learning Objective 12-1 1) A partnership is a business with two or more owners that is organized as a corporation. 2) The articles of partnership is a contract between partners that specifies such items as the name, location, and nature of the business; the name, capital contribution, and duties of each partner;.
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5) Treasury stock causes the number of: A) issued shares to go down. B) issued shares to exceed authorized shares. C) outstanding shares to go up. D) outstanding shares to go down. 6) Treasury stock is a: A) contra equity account. B) contra asset account. C) liability account. D) contra liability account. 7) A corporation originally issued $5 par value.
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7) A certain contingent liability was evaluated at year-end; the company felt it was probable that it would become an actual liability, and the amount could be reasonably estimated. If the accountant decided to report it on the balance sheet, this could be considered a violation of generally accepted accounting.
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2) The times-interest-earned ratio is also called the short interest ratio. 3) A high interest-coverage ratio indicates a business's difficulty in paying interest expense. 4) The times-interest-earned ratio is calculated as: A) earnings before interest and tax divided by interest expense. B) profit before tax divided by interest expense. C) net income divided by interest.
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15) Rick Co. purchases 8,500 shares of the company's $6 par common stock for $8 per share. Journalize the transaction. Learning Objective 13-5 1) Companies can report a negative amount in retained earnings. 2) Companies usually report their retained earnings restrictions on the balance sheet. 3) The statement of retained earnings reports how the.
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25) Which of the following concepts represents time value of money? A) the concept that money becomes obsolete over time B) the concept that money earns income over time C) the concept that money loses its purchasing power over time D) the concept that money can be converted into other currencies over time 26) If.
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  Learning Objective 14-1 1) The current portion of notes payable is the principal amount that will be paid within two years of the balance sheet date and the remaining portion is long term. 2) The current portion of notes payable must be reported on the balance sheet under current liabilities and the.
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2) If the partnership agreement specifies a method for sharing profits but not losses, then losses are shared the same way as profits. 3) The net income (loss) allocated to each partner should always equal the total net income (loss) of the partnership. 4) The withdrawal accounts of a partnership are closed.
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14) Which of the following is included in the entry to record estimated warranty payable? A) a credit to Estimated Warranty Payable B) a credit to Merchandise Inventory C) a credit to Warranty Expense D) a debit to Estimated Warranty Payable 15) Jumbo Sales offers warranties on all their electronic goods. Warranty expense is estimated.
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74) On July 31, 2015, the Archer Company reported the following information in the equity section of their balance sheet: Stockholders' equity Common stock, $1.00 par, 500,000 shares authorized, 20,000 shares issued $20,000 Paid-in capital in excess of Par—Common 1,180,000 Retained earnings 3,200,000 Total stockholder's equity $4,400,000 Assume that Archer carries out a 3-for-1 stock split. Please prepare a similar.
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44) Stock dividends are declared by the: A) chief financial officer of the company. B) board of directors of the company. C) chief executive officer of the company. D) stockholders of the company. 45) A company originally issued 10,000 shares of $5 par value common stock at $7 per share. The board of directors declares.
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22) Farrell and Jimmy enter into a partnership agreement on May 1, 2015. Farrell contributes $50,000 and Jimmy contributes $150,000 as their capital contributions. They decide to share profits and losses in the ratio of their respective capital account balances. The net loss for the year ended December 31, 2015.
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11) Which of the following corporate characteristics is a disadvantage of a corporation? A) Stockholders of a corporation have limited liability. B) A corporation has a continuous life. C) There is no mutual agency among the stockholders and the corporation. D) Earnings of a corporation are taxed twice. 12) Outstanding stock refers to the: A) shares.
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10) Which of the following statements is true? A) Appropriations of retained earnings require journal entries, but restrictions on retained earnings do not. B) No journal entries are needed to either appropriate or restrict retained earnings. C) Both appropriations and restrictions of retained earnings require journal entries. D) Restrictions on retained earnings must be.
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65) Which of the following is an important internal control over payroll? A) separating the duties of the disbursement of paychecks from the recording of payroll transactions in the ledger B) separating the duties of safeguarding property from record-keeping of property C) separating the duties of approving invoices from signing disbursement checks D) separating.
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21) In a partnership, mutual agency means that: A) the addition of a new partner does not dissolve the old partnership and mutually exchange the ownership with the exiting partner. B) every partner must bring the same amount of capital. C) the agency problem between the principal and agents are mutual and gets.
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64) Gordon Corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $11.50 per share. Common stock, $5 par, 190,000 shares authorized, 140,000 shares issued $700,000 Paid-in capital in excess of par—Common 120,000 Retained earnings 290,000 Total stockholders' equity $1,110,000 What will the total number of shares issued be after the.
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4) The operating expense section of the income statement includes the estimated warranty payable. 5) The liability section of the balance sheet does not include Warranty Expense. 6) Warranty Expense would be included in the operating expense section of the income statement. 7) The matching principle requires businesses to record Warranty Expense: A) in.
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31) Lauren and Elizabeth are partners. Lauren has a capital balance of $125,000 and Elizabeth has a capital balance of $110,000. Harry invested $100,000 to acquire an ownership interest of 30%. The journal entry to record the receipt of Harry's contribution will: A) decrease Lauren, Capital. B) increase Elizabeth, Capital. C) decrease Cash. D).
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24) Paramount Inc. decided to reward its employees with a bonus of 7% on annual net income, after deducting the bonus. The company reported net income of $513,600 before the calculation of the bonus. Provide the journal entry to accrue employee bonus expense. 25) Northwest Company's records indicate that January sales.
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17) Lerner Company had the following transactions in 2015, its first year of operations. •  Issued 20,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $14.00 per share. •  Issued 1,000 shares of $100 par value preferred stock. Shares were issued at par. •  Earned.
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15) The interest rate on which cash payments to bondholders are based is the: A) market rate. B) discount rate. C) stated rate. D) amortization rate. 16) An instrument that matures at one specified time is known as a: A) preferred share. B) common share. C) bond. D) letter of credit. 17) Which of the following describes a serial bond? A).
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11) Which of the following is true of a partnership balance sheet? A) Unlike a corporation's balance sheet, it includes all information from its income statement. B) It excludes the depreciation expense. C) It reports a separate capital account for each partner. D) It details the interest expenses of the business. 12) Given below is.
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35) Earning more income on borrowed money than the related interest expense is called: A) premium. B) leverage. C) annuity. D) amortization. 36) Campbell Inc. has net income of $500,000 and 200,000 shares of common stock. The company is considering a project which requires $800,000 and is considering two options: •Option 1 is to borrow $800,000.
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11) In a limited liability partnership, each partner is not personally liable for the malpractice committed by another partner. 12) The income of a limited liability company cannot be taxed to the members as though they were partners. 13) An S corporation is a corporation with 100 or fewer stockholders that can.
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21) Which of the following types of stock is considered least risky for investors? A) common stock B) par value stock C) no-par stock D) preferred stock 22) Preferred shareholders: A) are guaranteed that they will not take a loss on their investment. B) have higher voting rights than common shareholders. C) are sold for a price lower.
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4) Legal capital refers to the portion of stockholders' equity that cannot be used for dividends. 5) If preferred stock is noncumulative, then the company needs to pay dividends that were passed in previous years. 6) A dividend's declaration date is the date the corporation records which stockholders get dividend checks. 7) No.
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Learning Objective 12-2 1) The statement of partners' equity shows the changes in each partner's capital account for a specific period of time. 2) In a partnership balance sheet, the each partner's assets, liabilities, and equity will be shown separately. 3) The financial statements of a partnership are similar to the statements of.
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  Learning Objective 13-1 1) A corporation is a separate legal entity and is organized independently of its owners. 2) Stockholders of a corporation are not personally liable for the corporation's debt. 3) All classes and types of a corporation's stock carry the same degrees of risk for the shareholder. 4) Preferred stockholders receive a.
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Learning Objective 12-4 1) In partnership, a person can become a partner by purchasing an existing partner's interest. 2) The purchase of an existing partner's interest is not a personal transaction between the two individuals and is between the partnership and the new partner. 3) When a new partner enters into a partnership.
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