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Study Resources (Accounting)

11) If a corporation uses the contra account, Accumulated Amortization, this account will typically be shown on the balance sheet. 12) Which of the following is an intangible asset? A) copyright B) building C) land D) equipment 13) Businesses are allowed to record goodwill ________. A) when they enjoy an outstanding reputation and loyalty with customers B) if.
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21) Which of the following is an example of debt securities? A) preferred stocks B) forex investment C) common stocks D) corporate bonds 22) U.S. government securities are ________. A) real estate investments B) equity securities C) debt securities D) forward contracts 23) Which of the following financial instruments pay dividends? A) futures contracts B) real estate securities C) debt securities D) equity securities 24).
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Learning Objective 9-7 1) An exchange transaction is said to have commercial substance if the future cash flows change as a result of the transaction. 2) Exchanges of plant assets that have commercial substance require any gain or loss on the transaction to be recognized. 3) In exchanges of plant assets with commercial.
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Learning Objective 11-1 1) Amounts owed for products or services, due within one year, are current liabilities. 2) Amounts owed for products or services purchased on account are accounts receivable. 3) Unearned revenues relating to a one-year service contract are current liabilities until they are earned. 4) Notes payable are considered long-term debts, usually.
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31) Long-term investments ________. A) include all debt securities that are trading investments or held-to-maturity investments B) are investments in debt and equity securities that are highly liquid and that the investor intends to sell in one year or less C) include debt and equity securities that the investor expects to hold longer.
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Learning Objective 12-1 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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11) Depending on the maturity date, held-to-maturity investments are categorized as current assets or long-term assets on the balance sheet. 12) Long-term investments are also known as marketable securities. 13) Long-term investments are all investments that are not short-term. 14) Held-to-maturity investments are categorized as long-term assets on the balance sheet, irrespective of.
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Learning Objective 12-4 1) The main reason companies retire bonds prior to their maturity date is to relieve the pressure of paying interest payments. 2) An alternative to calling the bonds is to purchase them in the open market at their current market price. 3) Callable bonds are bonds that the issuer may.
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Learning Objective 10-3 1) When a company makes investments in equity securities with less than 20% ownership using idle cash, its total equity will increase. 2) Equity securities, in which the investor owns less than 20% ownership in the voting stock of the investee, can be either trading investments or available-for-sale investments. 3).
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Learning Objective 11-5 1) Investors use the times-interest-earned ratio to evaluate a company's ability to pay interest expense. 2) The times-interest-earned ratio is also called the short interest ratio. 3) A high interest-coverage ratio indicates a company's difficulty in paying interest expense. 4) The times-interest-earned ratio is calculated as ________. A) earnings before interest and.
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31) On April 1, 2015, Ardos Gardening Products borrowed $100,000 on a 15%, 10-year note with annual installment payments of $10,000 plus interest due on April 1 of each succeeding year. Provide the journal entry for the first installment payment made on April 1, 2016. 32) Hernandez Carpets Company buys a.
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Learning Objective 11-4 1) A contingent liability that has a remote possibility of becoming an actual loss is not included in a note to the financial statements. 2) A contingent liability that will probably become an actual liability, and can be reasonably estimated, must be recorded as an expense and a liability. 3).
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Learning Objective 12-3 1) The amortization of bond premium increases interest expense over the life of the bonds. 2) The face value of a bond payable minus the current balance of the discount account or plus the current balance of the premium account is the bond's carrying amount. 3) The balance in the.
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Learning Objective 11-2 1) Gross pay is the total amount of salary, wages, commissions, and bonuses earned by an employee during a pay period, after taxes or any other deductions. 2) The old age, survivors, and disability insurance portion of FICA taxes is imposed on all of an individual employee's earnings. 3) The.
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Learning Objective 11-3 1) Warranties pose an accounting challenge because a company does not know which or how many products will have to be repaired. 2) The entry to accrue warranty payable includes a credit to Warranty Expense. 3) Estimated Warranty Payable would be included in the liability section of the balance sheet. 4).
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11) Which of the following accounting principles requires that warranty expenses must be estimated and recognized in the same period when the related sales revenue is recognized? A) the matching principle B) the disclosure principle C) the revenue principle D) the consistency principle 12) Bison Inc. reported sales revenue for 2013 of $900,000. The products.
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11) Consolidation accounting is the way to combine the financial statements of two or more companies that have the same owners. 12) Which of the following is true of the comparison between equity securities and debt securities? A) Debt securities represent stock ownership in a company whereas equity securities represent a credit.
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31) Glitter Services Inc. pays $1,350,000 to acquire 35% of voting stock of Grey Investments Inc. on March 5, 2016. When this transaction is reported in the balance sheet, the ________. A) total equity will increase B) total assets will increase C) total assets will decrease D) total cash will decrease 32) Glitter Services Inc..
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Learning Objective 9-6 1) The asset turnover ratio measures the amount of net sales generated for each average dollar of total assets invested. 2) The asset turnover ratio is calculated by dividing cost of goods sold by average total assets. 3) Maple Corp. had net sales of $200,550 for the year ended December.
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Learning Objective 10-2 1) When a company invests in a long-term bond investment by paying cash, the total assets remain unchanged 2) When a firm receives interest revenue on a bond, the equity remains unchanged. 3) When a firm collects the face value of a bond investment at maturity, the total assets increase. 4).
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21) All available-for-sale (AFS) investments are reported on the balance sheet at ________. A) historical cost B) replacement cost C) current market value D) net realizable value 22) If there is an unrealized holding gain on available-for-sale investments, it is reported ________. A) as an adjustment to stockholders' equity on the balance sheet B) as a debit.
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Learning Objective 12-2 1) Bonds are short-term debt issued to multiple lenders called bondholders, usually in increments of $1,000. 2) On the maturity date, the bondholder is paid the face amount of the bond plus the last interest payment. 3) If a bond is issued at a discount, it will sell for more.
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Learning Objective 9-4 1) A natural resource is an asset that comes from the earth and is consumed. 2) The process by which businesses spread the allocation of a natural resource's cost over its usage is known as depreciation. 3) The units-of-production method is used to compute the depletion expense. 4) Businesses should not.
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