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Study Resources (Accounting)

11) A sale of fixed assets for cash is a(n): A) managing activity. B) investing activity. C) financing activity. D) operating activity. 12) Cash flows from financing activities would include: A) issuance of long-term notes. B) cash purchase of stocks and bonds. C) cash from sale of stock investments. D) All of these answers are correct. 13) Payments of cash.
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39) Indicate the effect that each of the following transactions has on the cash balance. Use (I) for increase, (D) for decrease, and (N) for no change. a) ________ Issued common stock for cash b) ________ Acquired land for cash c) ________ Purchase equipment on account d) ________ Paid a cash dividend e) ________ Purchased.
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21) Prior period adjustments are included in the statement of retained earnings. 22) In the closing process for corporations, Retained Earnings is used rather than Capital. 23) The statement of retained earnings includes the account Preferred Stock. Using the following accounts: [1]Cash [2]Dividends payable [3]Preferred stock [4]Common stock [5]Dividend distributable [6]Paid-in capital in excess of par common stock [7]Paid-in capital.
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21) The primary difference between secured bonds and debenture bonds is: A) debenture bonds are paid on the same maturity date while secured bonds are paid on multiple dates. B) secured bonds are backed with specific assets while debenture bonds are not. C) secured bonds are registered with the issuing company while debenture.
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31) Declaration of a cash dividend was recorded by debiting Operations Expense and crediting Cash. This error would cause: A) the period end assets to be overstated. B) the period end liabilities to be overstated. C) the period end stockholders' equity to be understated. D) None of the above are correct. 32) The declaration of.
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18.4   Learning Objective 18-4 1) The journal entry for the receipt of a cash payment on common stock subscriptions would include: A) debiting Subscriptions Receivable-Common Stock ; crediting Common Stock. B) debiting Common Stock; crediting Subscriptions Receivable-Common Stock. C) debiting Cash; crediting Subscriptions Receivable-Common Stock. D) debiting Cash; crediting Common Stock Subscribed. and apply basic.
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19.1   Learning Objective 19-1 1) The price a corporation pays when it reserves the right to retire or redeem stock at a specific price is the: A) redemption value. B) book value per share. C) dividend per share. D) market value. 2) The price at which shares are bought and sold on the open market is.
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21) Hefley Corporation issued a 10%, $500,000, 8-year bond at 105. The entry to record the issuance transaction is to: A) debit Cash $500,000; credit Bonds Payable $500,000. B) debit Cash $525,000; credit Bonds Payable $525,000. C) debit Cash $525,000; credit Bonds Payable $500,000; credit Premium on Bonds Payable $25,000. D) debit Cash $500,000;.
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17) Col 1 Operating Direct Col 2 Operating Indirect Col 3 Investing Col 4 Financing Increase in accounts payable 18) Col 1 Operating Direct Col 2 Operating Indirect Col 3 Investing Col 4 Financing Cash received from customers 19) Col 1 Operating Direct Col 2 Operating Indirect Col 3 Investing Col 4 Financing Increase in inventory 20) Col 1 Operating Direct Col 2 Operating Indirect Col 3 Investing Col 4 Financing Cash paid for salaries or wages 21) Col 1 Operating Direct Col 2 Operating Indirect Col 3 Investing Col 4 Financing Net income .
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21) The records of Ashley Boutique showed Net Loss, $25,000; Depreciation Expense, $35,000; and increase in Supplies on Hand, $8,000. The amount of Net Cash Flow from Operating Activities using the indirect method is: A) $18,000. B) $ 2,000. C) ($18,000). D) ($2,000). 22) Accounts Receivable amounted to $215,000 at the beginning of the year.
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21.2   Learning Objective 21-2 1) When preparing the statement of cash flows by the indirect method, if current assets have increased the difference is: A) added to net income. B) added to investments. C) deducted from net income. D) subtracted from investments. 2) Using the indirect method for cash flows, depreciation expense is added to net.
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43) The following information is given for Nevada Times: Net income$20,000 Depreciation expense4,000 Decrease in accounts receivable2,000 Increase in supplies on hand3,000 Sale of common stock10,000 Purchase of equipment5,000 Loan money to a customer4,000 Decrease in accounts payable1,000 The indirect method is used. Required: 44) The following information is given for Sunny Corporation: Net income$45,000 Depreciation expense8,000 Decrease in accounts receivable3,000 Increase in supplies on.
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20.2   Learning Objective 20-2 1) If a bond is issued at a premium, the effective interest rate is most likely ________ the contract interest rate. A) higher than B) lower than C) the same as D) Cannot be determined based on information given. 2) The entry to record the semiannual payment and amortization of the discount.
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20.4   Learning Objective 20-4 1) Assume the following account balances immediately after an interest payment date: Bonds Payable $100,000 Premium on Bonds Payable 5,000 If the bonds are retired immediately at a total cost of $104,000, the journal entry to record this event is: A) Cash 104,000 Loss on Bond Retirement     1,000 Premium on Bonds Payable 5,000 Bonds Payable 100,000 B) Bonds Payable 100,000 Premium on.
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11) Bond Interest Payable is reported as a: A) current liability on the balance sheet. B) current liability on the income statement. C) contra-liability on the balance sheet. D) contra-liability on the income statement. 12) The carrying value of bonds is calculated by: A) subtracting the Premium on Bonds Payable account balance from the Bonds Payable.
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21.4   Learning Objective 21-4 1) Which of the following is not a cash flow from investing activities? A) Loaning cash to borrowers B) Payment of cash dividends C) Sale or purchase of land D) Cash received from the sales of stock 2) If $12,000 was generated from operations, $6,000 was used for investing activities, and $4,000.
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41) Crafton Corporation is planning to issue 5-year, 8%, semiannual interest bonds with a face value of $400,000. Required: Prepare the necessary journal entry under each of the following assumptions. a. The bonds are sold on issuance date at par. b. The bonds are sold on issuance date at 97. c. The bonds are.
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Using the following accounts: [1]Cash [2]Sinking fund [3]Equipment [4]Building [5]Land [6]Accounts payable [7]Notes payable [8]Bond payable [9]Bond interest expense payable [10]Premium on bonds payable [11]Discount on bonds payable [12]Common stock [13]Retained earnings [14]Sinking fund earned [15]Bond interest expense [16]Gain on retirement [17]Loss on retirement Indicate the account(s) to be debited and credited to record the following transactions. 18) Paid the bond holders the amount due, face value plus accrued.
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21) Baxter Corporation has 1,000 shares of $5 par value common stock issued and outstanding. Journalize the following Baxter transactions for 20XX: Feb.1Purchased 200 shares of treasury stock at $6.00. 20Declared a $2.00 per share cash dividend payable on March 15 to stockholders of record March 1. Mar.15Paid the cash dividend. May10Declared a 10% stock dividend..
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  20.1   Learning Objective 20-1 1) A special type of long-term interest-bearing note payable issued by a corporation to raise capital is called a: A) short-term note payable. B) bond payable. C) stock issue. D) treasury stock issue. 2) The contract rate for a bond is: A) the annual interest rate based on selling price. B) the annual interest.
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22) Col 1 Operating Direct Col 2 Operating Indirect Col 3 Investing Col 4 Financing Decrease in prepaid expenses 23) The cash flows from operating activities are reported by the direct method on the statement of cash flow. Determine the following: a. If sales for the current year were $600,000 and accounts receivable decreased $25,500 during the year, what was the.
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41) The interest paid to bondholders is determined by: A) multiplying the bond's annual rate of interest by the face value. B) multiplying the market rate of interest by the face value. C) dividing the bond's annual rate of interest by the face value. D) dividing the face value by the bond's annual rate.
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31) Dividends received on investments made in the stock of other companies is an example of a financing activity. 32) One section of a statement of cash flows is purchasing activities. 33) Changes in current assets and current liabilities accounts deal with financing activities. 34) An example of operating activities is the payment.
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  22.1   Learning Objective 22-1 1) A statement comparing data from two or more consecutive periods is called a: A) comparative balance sheet. B) comparative income statement. C) common-size statement. D) both A and B. 2) In a comparative balance sheet, the ending Cash for 2012 was $315,000 and is $270,000 for 2013. The net increase or.
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11) When comparing net cash provided by operating activities using the indirect versus direct method: A) net cash is higher using the indirect method B) net cash is lower using indirect method C) there is no difference between the two methods D) depreciation expense is used in the direct method. 12) Rick Corporation's Accounts Receivable.
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19.4   Learning Objective 19-4 1) Providing services to a credit customer was recorded with a debit to Cash and a credit to Retained Earnings. This error would cause: A) the period's net income to be understated. B) the period end liabilities to be understated. C) the total period end stockholders' equity to be understated. D).
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11) When treasury stock is reissued for more than cost: A) debit Cash; credit Treasury Stock and Paid-in Capital from Treasury Stock. B) debit Cash; credit Common Stock and Paid-in Capital from Common Stock. C) debit Cash; credit Treasury Stock. D) debit Cash; credit Treasury Stock and Retained Earnings. 12) Farm and Supply reissued 100.
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11) Bonds payable issued with collateral are called: A) debenture bonds. B) serial bonds. C) callable bonds. D) secured bonds. 12) Bonds that may be redeemed at a certain price level are known as: A) callable bonds. B) debenture bonds. C) serial bonds. D) convertible bonds. 13) Dividends paid to stockholders are: A) taxable to the recipient stockholder. B) taxable to the.
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31) The Accounts Payable balance has decreased during the year. How would this event affect the statement of cash flows operations section—indirect method? A) It is already included in the net income. B) It would affect the operations section positively. C) It would affect the operations section negatively. D) Does not affect the cash.
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46) On May 31, Mason Corporation has the following stockholders' equity: Common Stock, $10 par value, 6,000 shares issued and outstanding$60,000 Retained Earnings20,000 Total Stockholders' Equity$80,000 The board of directors declared a 10% stock dividend on June 5 to the stockholders of record on June 15. The stock is to be distributed on June 30..
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19.2   Learning Objective 19-2 1) What are the annual dividends on preferred stock, $20 par, 2,000 shares authorized, 700 shares issued, and a dividend rate of 5%? A) $200 B) $20 C) $700 D) $70 2) What are the annual dividends on preferred stock, $20 par, 500 authorized, 250 shares issued, and a dividend rate of.
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32) Prepare a statement of retained earnings in proper form for White Corporation for the year ended December 31, 20xx, from the following: Retained Earnings, January 1, 20xx$2,000 Dividends paid during the year800 Net income for the year3,000 Correction of prior year error. Purchase of land recorded as rent expense1,000 33) Prepare a statement of retained.
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21.3   Learning Objective 21-3 1) The method of reporting cash flows from operating activities under which revenues and expenses on the income statement are adjusted to reflect the amount of cash received or expended for each item is the: A) direct method. B) indirect method. C) combination method. D) adjustment method. 2) Many accountants prefer which.
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21) A stock-split journal entry would include a: A) debit to Retained Earnings and a credit to Common Stock. B) debit to Common Stock and a credit to Cash. C) debit to Common Stock Dividend Distributable and a credit Common Stock. D) memorandum notation only. 22) The retained earnings section after a two-for-one stock split.
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11) A prior period adjustment would be necessary when: A) a stock dividend is declared. B) a stock dividend is paid. C) amortization expense was understated the prior year. D) a cash dividend is declared. 12) A prior period adjustment for depreciation would affect what account in the stockholders' equity section? A) Capital Stock B) Paid-in Capital.
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19.3   Learning Objective 19-3 1) Treasury stock was purchased and recorded as an asset. This error would cause: A) the period end assets to be understated. B) the period end liabilities to be overstated. C) the period end stockholders' equity to be overstated. D) None of the above is correct. 2) When treasury stock was sold.
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20.3   Learning Objective 20-3 1) Bonds are issued for $10,000 at 8% on October 1. What is the adjusting entry on December 31? A) Bond Interest Expense 800 Bond Interest Payable 800 B) Bond Interest Expense 200 Bond Interest Payable 200 C) Bond Interest Payable 200 Bond Interest Expense 200 D) Bond Interest Payable 800 Bond Interest Expense 800 2) Bonds are issued for $80,000 at 12%.
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19) Discuss and describe the major differences among the following common stock values: a. Par value b. Stated value c. Redemption value d. Market value e. Book value 20) From the following, determine the book value per share for preferred and common stocks, assuming $2,000 of dividends are in arrears on the preferred stock. Stockholders' Equity Preferred Stock,.
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21) Carolina Company sold a machine for $12,000 cash, which had an original cost of $19,000 and accumulated depreciation of $6,000. The amount of cash provided by this sale is: A) $12,000. B) $13,000. C) $18,000. D) $19,000. 22) A transaction of issuance of stock in exchange for equipment would be recorded as a(n): A) operating.
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Chapter 21   Statement of Cash Flows   21.1   Learning Objective 21-1 1) A statement of cash flows: A) has three main sections: net cash flow from operating, investing, and financing activities. B) may be computed directly or indirectly. C) is a statement used to better understand the financing and investing activities. D) All of the above are.
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