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Study Resources (Accounting)

11) The date of record is the date that: A) the board of directors announces a dividend will be paid. B) the dividends will be transferred to the shareholders. C) the shareholders purchased the stock. D) will determine which shareholders receive the dividends. 12) On the date of declaration,: A) debit Dividends and credit Retained Earnings. B).
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12.2   Questions 1) The management discussion and analysis is typically located after the financial statements in a company's annual report. 2) A business model describes what a business does, what it sells, and who it sells to. 3) A business model deals with how a business makes customers want to buy their product. 4).
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10.3   Questions 1) Many companies raise capital by issuing stock directly to stockholders or by using an underwriter. 2) The issue price of the stock usually is equal to the par value of the stock. 3) A company can have a profit or loss when buying or selling its own stock. 4) When stock.
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1) A corporation is a separate legal entity from its owners. 2) A corporation must incorporate through the local government of any state it chooses. 3) A corporate charter describes the purpose, place of business, and other details of the business being incorporated. 4) A corporation must incorporate in every state in which.
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7) The Design Works, Inc. Stockholders' Equity section includes the following information: Preferred Stock $22,000 Paid-in Capital in Excess of Par—Preferred 2,980 Common Stock 48,000 Paid-in Capital in Excess of Par—Common 3,400 Retained Earnings 7,350 Total paid-in capital is: A) $70,000. B) $83,730. C) $76,380. D) $77,350. 8) The Coulter Corporation Stockholders' Equity section includes the following information: Preferred Stock $12,000 Paid-in Capital in Excess of Par—Preferred 2,700 Common Stock 15,000 Paid-in Capital.
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31) The journal entry to record $200,000 of bonds that were issued at 97 would be to: A) debit Cash, $194,000; debit Discount on bonds payable, $6,000; credit Bonds payable, $200,000. B) debit Cash, $194,000; credit Bonds payable, $194,000. C) debit Cash, $200,000; credit Bonds payable, $194,000; credit Premium on bonds payable, $6,000. D).
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11) A W-4 filled out by the employee does not designate their: A) marital status. B) withholding allowances. C) address. D) age. 12) Most single individuals will claim: A) 0 allowances. B) 0 or 1 allowances. C) 2 allowances. D) more than 2 allowances. 13) The lower the number of withholdings claimed on a W-4, the: A) higher the gross pay. B).
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9.5   Questions 1) Bonds payable are supported by a promissory note. 2) A mortgage is a special type of long-term note payable. 3) A mortgage is a secured note because the building will serve as collateral. 4) Bonds are interest-bearing notes that are issued to a single lender. 5) A person or business who pays.
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8.7   Questions 1) The process of allocating the cost of natural resources is called depletion. 2) Computing depletion expense is much like computing depreciation under the straight-line method. 3) In computing depletion expense, salvage value is not part of the computation. 4) Items such as minerals are considered natural resources. 5) Pegasus Corporation purchased a.
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21) Antiques.com Corporation's outstanding stock is 75 shares of $60-par, 8% non-cumulative preferred stock and 2,000 shares of $10-par common stock. Antiques paid $2,400 in dividends during the year. Common stockholders received: A) $2,400. B) $2,040. C) $ 360. D) $ 0. 22) Brandon Company's outstanding stock is 100 shares of $100, 6% cumulative preferred.
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41) Morgan Company's Accounts Receivable decreased by $25,000 and its Accounts Payable increased by $12,000. What is the net effect on cash from operations under the indirect method? A) +$37,000 B) -$13,000 C) -$37,000 D) +$13,000 42) Haskins, Inc.'s Accounts Receivable decreased by $30,000 and its Accounts Payable decreased by $16,000. What is the net.
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10.2   Questions 1) Stockholders' equity consists of contributed capital and paid-in capital. 2) Retained earnings represent internally generated capital. 3) A stockholder may have three basic rights. 4) For most companies, preemptive rights are the exception, rather than the rule. 5) Preferred stock is considered a voting "class" of stock. 6) Preferred stockholders generally have the.
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11) Which of the following is NOT a part of financing activities? A) Paying dividends B) Issuing stock C) Paying off loans D) Buying land 12) Operating cash flows affect: A) current assets and current liabilities. B) long-term asset accounts. C) equity accounts. D) long-term liability accounts. 13) Investing cash flows affect: A) current assets and current liabilities. B) long-term asset accounts. C).
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10.4   Questions 1) Paying dividends causes a decrease in total assets, but an increase in total stockholders' equity. 2) Corporations declare cash dividends from retained earnings. 3) The portion of stockholders' equity that can be used for dividends is referred to as legal capital. 4) Preferred stock may have its dividend rate listed as.
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41) Discount on bonds payable and Premium on bonds payable are examples of: A) contra-accounts. B) companion accounts. C) estimated accounts. D) equity accounts. 42) If a $6,000, 10 percent, 10-year bond was issued at 104 on October 1, how much will accrued interest payable be on December 31 if interest payments are made annually? A).
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21) Comparing your company with a competing company in the same category of business is called benchmarking. 22) Common-size statements are useful when comparing a company's performance against that of a company of a different size. 23) Common-size statements use the same percentages that are computed during a vertical analysis, but no.
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11.3   Questions 1) Most businesses prefer to use the indirect method of formatting a statement of cash flows. 2) In order to prepare a statement of cash flows using the indirect method, you need the income statement only. 3) The operating section of a statement of cash flows using the indirect method is.
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11) Knowing the dollar amount of change from year-to-year in an account is less relevant than knowing the percentage change. 12) The most recent period in a horizontal analysis is called the base period. 13) Horizontal analysis is only done on the income statement. 14) The formula for determining the percentage change in.
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11.4   Questions 1) The FASB recommends use of the direct method, rather than the indirect method, of preparing a cash flow statement. 2) Under the direct method, the only section that differs from the indirect method is the financing activities section. 3) In the direct method, each line of the income statement is.
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9.4   Questions 1) Contingent liabilities represent actual–NOT potential–obligations. 2) The accounting treatment of a contingent liability depends upon the likelihood of an actual obligation occurring. 3) A company that cosigns a loan with another company could incur a contingent liability. 4) There are times when contingent liabilities are never recorded. 5) The disclosure of a.
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10.6   Questions 1) A company's stock that it reacquires is termed treasury stock. 2) Treasury stock transactions are uncommon among larger corporations. 3) Treasury stock is a contra-equity account and carries a debit balance. 4) Treasury stock decreases the number of outstanding shares of stock. 5) Treasury stock is recorded at par value. 6) Treasury stock.
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21) Operating expenses–other than depreciation–for the year were $335,000. Prepaid expenses decreased by $7,000. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be: A) $335,000. B) $342,000. C) $328,000. D) $ 7,000. 22) Operating expenses–other than depreciation–for the year were $280,000. Prepaid expenses increased by.
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11) Knutson Company has a $2,400 credit balance in Paid-In Capital–Treasury Stock. It sells 500 shares of treasury stock, which the company reacquired at $21/share, for $18/share. After the transaction, what will the balance be in the Paid-In Capital in Excess of Par–Treasury account? A) $3,900 credit B) $1,500 debit C) $ 900.
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11.2   Questions 1) The three types of business activities on a statement of cash flows are operating, investing, and management activities. 2) Operating activities reflect such things as purchasing fixed assets. 3) Cash received from issuing stock would be included in financing activities. 4) Current assets on the balance sheet would be affected by.
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31) A company has $56,000 in cash; $12,000 in accounts receivable; $25,000 in short-term investments and $100,000 in merchandise inventory. The company also has $60,000 in current liabilities. The company's current ratio is: A) 0.933. B) 1.550. C) 1.133. D) 3.217. 32) The 2011 and 2012 balance sheets for Newport Industrial showed Cash of $8,000.
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11.1   Questions 1) The balance sheet reports the ending cash, but does not include cash equivalents. 2) A comparative balance sheet reports at least two consecutive years of information that can be used to compile a statement of cash flows. 3) A comparative balance sheet details why the ending cash balance increased or.
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9.3   Questions 1) Even liabilities of unknown amounts are required to be placed on the balance sheet. 2) Warranty expense must be estimated and matched to revenues. 3) Estimated liabilities are generally classified as long-term liabilities. 4) Warranty expense is always recorded in the period that the warranty claims are paid. 5) Warranty expense is.
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9.8   Questions 1) Payroll is also called employee compensation and can consist of many parts. 2) Benefits are extra compensation that is paid directly to the employee. 3) Which are generally paid for exceptional performance? A) Salaries B) Wages C) Bonuses D) Commissions 4) Which are generally paid at an hourly rate? A) Salaries B) Wages C) Bonuses D) Commissions 5) Pay stated.
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6) Both the formulas for current ratio and debt ratio use current liabilities in the computation. 7) The interest coverage ratio equals interest expense divided by EBIT. 8) EBIT is also called operating profit. 9) Franklin Industries had total assets of $560,000; total liabilities of $250,000; and total stockholders' equity of $310,000. Franklin.
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11) Some investing and financing activities involve no cash flows, so they: A) represent no significant financial change. B) should be included in the three main sections of the statement of cash flows. C) should be reported in a separate section of the cash flow statement. D) must be converted to cash at the.
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11) Bonds that may be retired at a prearranged price are called: A) convertible bonds. B) term bonds. C) secured bonds. D) callable bonds. 12) Bonds that mature all at the same time are: A) serial bonds. B) term bonds. C) secured bonds. D) callable bonds. 13) Bonds that are backed by collateral are: A) unsecured bonds. B) convertible bonds. C) callable bonds. D).
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8.8   Questions 1) Equity securities which management intends to hold for less than one year would be considered other long-term assets. 2) Investments in debt securities, such as bonds, may be classified as either current or long-term assets. 3) Increases in the value of a security while the company still owns it are.
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11) Stock that is held by stockholders is called: A) issued stock. B) authorized stock. C) outstanding stock. D) open stock. 12) Which of the following business types is largest by number? A) Not-for-profits B) Proprietorships and partnerships C) Corporations D) Government entities 13) Which of the following business types dominates by the amount of business transacted? A) Partnerships B) Proprietorships C) Corporations D).
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10.5   Questions 1) A stock dividend affects total stockholders' equity. 2) A stock dividend increases the stockholder's percent of stock held. 3) A stock dividend may be given to reduce the market price of the stock. 4) A corporation may declare stock dividends when there is not enough cash to pay a cash dividend. 5).
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11.5   Questions 1) Free cash flow is the anticipated amount of cash available from operations after paying for planned financing of stock and paying dividends. 2) The formula for free cash flow is anticipated cash from operations minuscash payments for investments in long-term assets. 3) The cash conversion cycle depends upon the time.
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9.2   Questions 1) The largest portion of accounts payable for most merchandising companies is related to the purchase of inventory on account. 2) A transaction such as a utility bill to be paid in 30 days would be journalized with a debit to Utilities expense and a credit to Notes payable. 3) Making.
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8.9   Questions 1) Long-term assets usually begin with the listing of natural resources first. 2) GAAP does not allow property, plant, and equipment to be shown at net book value on the balance sheet. 3) Intangibles, such as patents and copyrights, are generally listed after property, plant, and equipment and after natural resources.
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12.3   Questions 1) The three ways to analyze financial statements are by using horizontal, vertical and ratio analysis. 2) The interest coverage ratio is an indicator of a company's ability to repay interest on its debt. 3) The formula for the debt ratio is total liabilities divided by Long-term assets. 4) Operating profit (EBIT).
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9.6   Questions 1) Having liabilities classified incorrectly will have a big impact on the company's current ratio. 2) By NOT accruing warranty expense: A) reported liabilities will be overstated and net income will be understated. B) reported expenses will be overstated and reported liabilities will be understated. C) reported liabilities will be understated and net.
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1) The majority of a company's liabilities are estimated liabilities. 2) Notes payable would be an example of a known liability. 3) A contingent liability arises because of a past event, but is dependent upon a future event. 4) A known liability is always classified as a current liability. 5) When a liability exists,.
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