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Study Resources (Accounting)

21) When the investment is readily convertible to cash and the investor plans to convert the investment to cash within one year, the investment is shown on the balance sheet as: A) short-term. B) long-term. C) equity. D) either long-term or short-term. 22) The following is the proper order for assets on a balance sheet: A).
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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.
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6) On the statement of cash flows, the cash received from selling available-for-sale investments is shown as a(n): A) increase in financing activities. B) decrease in financing activities. C) increase in investing activities. D) decrease in investing activities. 7) On the statement of cash flows, the cash paid to purchase available-for-sale investments is shown as.
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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.
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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.
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41) Several intangible assets are listed in Column I. For each question, select the definition of the intangible in Column II which describes the intangible asset. Record your choice on the line preceding the question number. An answer may only be used one time. Column IColumn II ____ 1. Copyright A)  Federal government grants that.
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25) The market value of an available-for-sale security has decreased from the last carrying value. The journal entry to record this decrease will include: A) a debit to the Allowance to Adjust Investment to Market. B) a credit to the Allowance to Adjust Investment to Market. C) a credit to the Unrealized Loss.
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43) On June 1, 2011, Conqueror Company purchased Standard Corp for $26 million cash. At the time of purchase, the market value of Standard's assets was $24,000,000 and Mollie had liabilities of $3,000,000. At the end of 2012, Conqueror estimated the goodwill on the Standard purchase to be worth only $3,500,000. Prepare.
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15) The Allowance to Adjust Investment to Market is a companion to Interest Receivable. 16) On purchase date, Available-for-sale investments in stock are recorded at: A) their cost. B) the lower-of-cost-or-market. C) their amortized cost. D) their realizable value. 17) On the balance sheet, Available-for-sale investments in stock are reported at: A) their cost. B) the lower-of-cost-or-market. C) their.
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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.
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7.5   Learning Objective 7-5 1) Accumulated depletion reduces equity, as this account is a contra-revenue account. 2) Natural resources are reported in the Intangible Assets section of the income statement. 3) Natural resources are also called wasting assets. 4) Intangibles can have finite or infinite lives. 5) Intangible assets with finite lives that can be.
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20) Mindy's Boutique has a beginning balance in the equipment account of $137,000. During the year, they purchased $245,000 worth of equipment. At the end of the year, the balance in the equipment account was $315,000. The cost of the equipment that Mindy's Boutique sold was: A) $58,000. B) $67,000. C) $108,000. D) $178,000. 21).
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37) Milton Company owns 30% interest in the stock of Darcy Corporation. During the year, Darcy pays $20,000 in dividends to Milton, and reports $100,000 in net income. Milton Company's investment in Darcy will increase Milton's net income by: A) $15,000. B) $30,000. C) $24,000. D) $6,000. 38) Nantucket Company owns a 30% interest in.
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3) Calculate Company Y's total asset turnover based on the following information for the current year: Net income $100,000 Assets at the beginning of the year $800,000 Assets at the end of the year $830,000 Net sales $300,000 A) 10.3% B) 12.3% C) 32.8% D) 36.8% 4) The following information was taken from the records of the Acme Company for the current year: Net.
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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,.
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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,.
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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).
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28) On a worksheet for a consolidated entity balance sheet, the elimination entry requires: A) a credit to stockholders' equity accounts of the subsidiary. B) a credit to the Cash account of the subsidiary. C) a credit to Investment in Subsidiary. D) a debit to Investment in Subsidiary. 29) Big Time Company owns all of.
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35) Receiving a cash dividend from an available-for-sale investment requires the following journal entry: A) a debit to Cash and a credit to Dividend Revenue. B) a debit to Cash and a credit to Unrealized Gain on Investments. C) a debit to Unrealized Gain on Investment and a credit to Dividend Revenue. D) no.
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21) Amortization expense: A) is the title of the expense associated with natural resources. B) is recorded for intangible assets with a finite life. C) is recorded for assets with an indefinite life. D) cannot be credited directly to the asset account. 22) Which of the following intangible assets has an indefinite life? A) Patents B) Copyrights C).
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62) Lansing Company's general ledger shows the following balances for the selected accounts after posting adjusting entries: Accounts Payable$155,000 Notes Payable, 3-month180,000 Accumulated Depreciation-Equipment114,000 Salaries Payable127,000 Notes Payable, 5-year, 8%130,000 Estimated Warranty Liability134,000 Payroll Tax Expense16,000 Interest Payable13,000 Sales Tax Payable 22,000 Required: Prepare the current liability section of Lansing Company's balance sheet, assuming that the current portion of the 5-year.
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8.1   Learning Objective 8-1 1) Long-term investments are listed on the balance sheet after current assets and property, plant, and equipment. 2) Investments can never be classified as short-term investments. 3) Stocks and bonds projected to be held for longer than one year are long-term investments. 4) On the balance sheet, assets are listed.
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5) The Allowance to Adjust Investments account is a Long-Term Asset account. 6) Unrealized gains and losses result from changes in the investments fair value. 7) The Allowance to Adjust Investment to Market account will always have a debit balance. 8) GAAP requires companies to adjust their available-for-sale-securities to market value as of.
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59) Davies Accessories Company entered into the following transactions relating to notes payable: August 1Purchased inventory costing $42,000 by signing an 8-month, 5% note payable. October 1Purchased inventory costing $15,000 by signing a 1-year, 6% note payable. a.Prepare journal entries to record the above transactions. b.Assuming Davies Accessories Company has a December 31 year-end,.
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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.
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31) Godert Pharmaceutical Company has many scientists working in their labs trying to develop an anti-aging drug. The cost of this research and development must be: A) expensed as incurred. B) set up as an intangible asset and amortized over 20 years. C) set up as an intangible and tested for impairment on.
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45) The Allowance to Adjust Investments to Market account has a current credit balance of $1,150 after adjustment. Available-for-sale investments have a current market value of $20,000. The carrying value of the investments is: A) $20,000. B) $21,150. C) $18,850. D) unknown. The carrying value cannot be computed without knowing the cost of the.
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7.6   Learning Objective 7-6 1) If an asset is impaired, the company is required to adjust the carrying value downward from its book value to its fair value. 2) Which of the following is a correct statement about asset impairment? A) An asset is impaired if the net book value exceeds the estimated.
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18) Consolidated financial statements are prepared when a company owns ________ of the common stock of another company. A) less than 20% B) between 20% and 50% C) less than 50% D) more than 50% 19) A company that owns more than 50% of the common stock of another company is known as the: A) parent.
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11) Some trademarks have a definite life set by a contract and should be amortized. 12) All of the following are classified as natural resources and are depleted EXCEPT for: A) land. B) timber. C) minerals. D) oil. 13) Natural resources: A) are not physically used up over time. B) have a contra account, accumulated amortization. C) are recorded.
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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.
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9.1   Learning Objective 9-1 1) Current liabilities are expected to be paid within one year or the operating cycle, whichever is longer. 2) A current liability must be paid out of current profits. 3) Purchasing merchandise inventory on account results in a liability. 4) Notes payable usually require the borrower to accrue interest expense.
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