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Study Resources (Accounting)

10.2-21Which of the following accounting principles requires that warranty expenses must be estimated and                                           recognized in the same period as the related sales revenue is recognized?  A) The matching principle  B) The disclosure principle  C) The revenue principle  D) The consistency principle  10.2-22Booker Company reported sales revenue.
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11.4-1Interest payable would normally be shown on the balance sheet in current liabilities. 11.4-2FICA tax payable would normally be shown on the balance sheet in long-term liabilities. 11.4-3Accounts payable is always shown on the balance sheet in current liabilities. 11.4-4The current portion of notes payable would normally be shown on the balance sheet.
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11.3-8Discount on bonds payable is considered to be additional interest expense of the company that issues the                                           bond.  11.3-9Premium on bonds payable is considered to be additional interest expense of the company that issues the                                           bond.  11.3-10On January 1, 2012, Davie Services issued $20,000.
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11.3-18On December 31, 2013, Peterson Sales has a bonds payable balance of $40,000 and a premium on bonds                                           payable of $900.  On the balance sheet, how will this information be shown? A)    $40,000 less premium of $900 for a net balance of $39,100 B)     $40,000 less one-tenth of $900.
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10.3-11Gross pay is the total amount of compensation earned by an employee, before any deductions are made. 10.3-12Net pay is the total amount of compensation earned by an employee, before any deductions are made. 10.3-13Federal unemployment tax is a tax expense that is borne by the employer alone, and is not.
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11.1-21On November 1, 2012, EZ Products borrowed $48,000 on a 5%, 10-year note with annual installment                                           payments of $4,800 plus interest due on November 1 of each succeeding year.  On December 31, 2013,                                           what will the balance be in the account titled Long-term notes.
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12.3-4When a company sells stock for more than the par value, it will record a gain on sale for the amount in                                           excess of par. 12.3-5Osbourne Company issued 50,000 shares of common stock in exchange for manufacturing equipment.                                            The equipment was valued at $1,000,000.  The.
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10.1-1If a note payable has installments due within a year, the entire note is treated as a current                                           liability.  10.1-2Amounts owed for products or services purchased on account are contingent liabilities.  10.1-3Unearned revenue is an obligation to provide goods or services to the customer.  10.1-4Notes payable are.
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12.3-33Chaney Corporation issued 20,000 shares of common stock on January 1, 2014.  The stock has par value                                           of $1.00 per share and was sold at $30 per share.  Please provide the journal entry for this transaction. 12.3-34Dallkin Corporation issued 5,000 shares of common stock on January 1, 2015. .
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12.5-11A corporation declares a dividend of $.75 per share on 12,500 shares of common stock.  Which of the                                           following would be included in the entry to record the declaration?  A) Retained earnings would be debited for $9,375.  B) Paid-in capital in excess of par would be credited.
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11.2-21Which of the following describes a debenture? A)  A bond that repays principal in installments B)  A bond that gives the bondholder a claim for specific assets if the issuer fails to pay C)  A bond that matures at one specified time D)  A bond that is not backed by specific assets 11.2-22Which of.
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10.3-21Sue works 46 hours at her job during the week.  She is paid $13.30/hour and receives overtime at the rate                                           of time-and-one-half for hours worked over forty.  Sue is taxed for federal income taxes at 15% and                                           7.65% for OASDI and Medicare.  All of.
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10.3-41Tom’s gross pay for the week is $800.  Tom’s yearly pay is under the limit for OASDI.  Assume that the                                           rate for state and federal unemployment compensation taxes is 6.2%, and that Tom’s pay year-to-date has                                           previously exceeded the $7,000 cap.   How much is.
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11.3-28On November 1, 2015, Archangel Services issued $200,000 of 10-year bonds with a stated rate of 3%.                                            The bonds were sold at par, and make semiannual payments on April 30 and October 31.  At December                                           31, 2015, Archangel made an adjusting entry to accrue.
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12.4-1When a company records the year-end closing entries, the first step is to close the Revenues to Retained                                           earnings. 12.4-2When a company records the year-end closing entries, the Income summary balance, before it is closed to                             Retained earnings, should be equal to the Net income or.
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12.1-1The formation of a corporation is generally less complicated than the formation of a partnership.  12.1-2A corporation is a separate legal entity formed under the laws of a particular state.  12.1-3Stockholders of a corporation have unlimited liability for the corporation's debt.  12.1-4A disadvantage of the corporation is the separation between.
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11.5-3If the difference between the effective-interest method of amortizing bond discount and the straight-line                                           method is immaterial, then GAAP permits use of the straight-line method. 11.5-4The time value of money is related to which of the following concepts? A)   Money loses value over time as it is spent. B)   Money.
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12.1-11Which of the following corporate characteristics is a disadvantage of the corporate form of business?  A) Limited liability  B) Double taxation  C) No mutual agency  D) Transferability of ownership  12.1-12Which of the following is a disadvantage of the corporate form of business?  A) Separation of ownership and management  B) Continuous.
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12.4-11Hot Tamale Company had $120,000 of revenues and $125,000 of expenses. No dividends were paid.  The                             second of the year-end closing entries should include which of the following line items? A)   Credit Retained earnings $125,000. B)   Debit Retained earnings $125,000. C)   Debit Income summary $125,000. D)   Credit Income summary $125,000. 12.4-12Hot Tamale Company.
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12.6-1The book value of common stock is equal to the total equity less the book value of preferred stock,                                           divided by the number or common shares outstanding. 12.6-2Which of the following is the price for which a person can buy or sell a share of stock?  A) Book.
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10.4-20Art Parrish is the sole employee of Parrish Sales.  His company pays a portion of his health insurance                                           premium, and also contributes to a retirement plan in his name.  The company share of the health                                                         insurance premium is $400, and the company contribution.
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12.3-24Moretown Company had the following transactions in 2014, its first year of operations. Issued 30,000 shares of common stock.  Stock has par value of $1.00 per share and was issued at $18.00 per share. Earned net income of $70,000. Paid no dividends. At the end of 2014, what is the total amount of Stockholders’.
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11.6-1The main reason companies retire bonds prior to their maturity date is to relieve the pressure of paying                                           semiannual interest payments. 11.6-2If a company wishes to retire bonds early, they may call the bonds if the bonds are callable, but they may                                           not purchase them.
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12.4-21A company had $90,000 of Sales revenue and $55,000 of Expenses.  Please provide the second of three                                           year-end closing entries. 12.4-22A company had $90,000 of Sales revenue and $55,000 of Expenses.  Please provide the third of three year-end closing entries.  (Assume no dividends were paid.) 12.4-23Hot Tamale Company had.
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2.5-31A corporation has 15,000 shares of 10%, $50 par cumulative preferred stock outstanding and 25,000                                           shares of no-par common stock outstanding.  Dividends of $37,500 are in arrears.  At the end of the                                           current               year, the corporation declares a dividend of $120,000. How is.
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11.3-38Blanding Company issues $1,000,000 of 8%, 10-year bonds at 98 on February 28, 2014.  The bond pays interest on February 28 and August 31.  The market rate of interest on the issuance date was 10%.  Assume Blanding uses the straight-line method for amortization.  What net balance will be reported for.
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4.4-30Which of the following is a major control risk in the payroll area? A) Theft of inventory by staff B)  Fictitious persons cashing paychecks C)  Expenses being recorded as assets in order to manipulate earnings D)  Contracts being awarded to relatives of employees 10.4-31Which of the following is a control procedure to prevent fictitious persons.
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12.3-39Notebook Company had the following transactions in 2014, its first year of operations. Issued 2,000 shares of common stock.  Stock has par value of $1.00 per share and was issued at $50.00 per share. Issued 100 shares of $100 par value preferred stock.  Shares were issued at par. Earned net income of $95,000. Paid.
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11.1-30On July 1, 2013, Avery Services issued a long-term note payable for $10,000. It is payable over a 5- year                                           term in $2,000 installments on July 1 of each succeeding year.  Please provide the initial journal entry for                                           the issuance of the note. 11.1-31On July.
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11.2-31A bond is sold for an amount less than its face value.  Which of the following statements would explain                                           why? A)  The bond’s stated rate is lower than the prevailing market rate at time of sale. B)  The bond’s stated rate is the same as the prevailing market rate.
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10.1-11Which of the following is a liability created when a company receives cash for services to be provided in                                           the future?  A) Unearned revenue  B) Accrued liability  C) Service revenue  D) Estimated warranty payable  10.1-12Sales revenue for a sporting goods store amounted to $215,000 for the current.
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10.1-21ABC Company signed a 5-year note payable for $80,000 at 9% annual interest.  What is the interest                                           expense for December 31, 2012 if the note was signed on May 1, 2012? A)  $  7,200 B)  $  4,800 C)  $  2,400      D)  $36,000 10.1-22ABC signed a 5-year, 9% note payable for $80,000.
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10.2-1Warranties pose an accounting challenge because a company does not know which or how many products will have to be repaired.  10.2-2The entry to estimate warranty payable includes a credit to Warranty expense.  10.2-3A contingent liability that has a remote possibility of becoming an actual loss is included in a.
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12.3-37Lerner Company had the following transactions in 2013, 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 net income of $35,000. Paid.
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12.2-15Which of the following describes retained earnings? A)    Internally generated capital that results from profitable business transactions B)     Externally generated capital that is contributed by shareholders C)     Externally generated capital that is raised from banks and other creditors D)    Internally generated capital that results from employees’ contributions 12.2-16Which of the following describes preferred stock? A)    Stock.
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12.2-5Paid-in capital is equity that is generated internally by corporate business transactions. 12.2-6Retained earnings is equity that is generated internally by corporate business transactions. 12.2-7All corporations must issue both common and preferred shares of stock. 12.2-8Which of the following represents one of the basic rights of stockholders? A)    Stockholders may sell their stock back.
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12.3-14The following information is from the balance sheet of Tudor Corporation as of December 31, 2014. Preferred stock, $100 par $ 500,000 Paid-in capital in excess of par–preferred 35,000 Common stock, $1 par 190,000 Paid-in capital in excess of par–common 380,000 Retained earnings 131,500 Total stockholders' equity $1,236,500 What was the total paid-in capital as of December 31, 2014?  A) $1,236,600  B).
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12.5-21On November 1, 2014, Oster Company declared a dividend of $3.00 per share.  Oster Company has                                           20,000 shares of common stock outstanding and no preferred stock.  The date of record is November 15,                                           and the payment date is November 30, 2014.  Which of the.
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12.5-1Declaring and paying dividends causes a decrease in both assets and equity. 12.5-2Paying dividends causes a decrease total paid-in capital. 12.5-3If preferred stock is non-cumulative, then the company does NOT need to pay dividends that were passed in previous years. 12.5-4If preferred stock is cumulative, then the company does NOT need to pay.
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10.2-11A certain contingent liability was evaluated at year-end, and considered to have a remote possibility of                                           becoming an actual liability.  If the accountant decided NOT to report it on the balance sheet or in the notes to the financial statement, this could be considered unethical behavior. 10.2-12A A certain.
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11.3-46On January 1, 2013, Davie Services issued $20,000 of 8% bonds that mature in five years.  They were                                           issued at par–for the same amount as the face value.  Please provide the journal entry to issue the                                                         bonds. 11.3-47On January 1, 2013, Davie Services issued.
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10.1-33Associated Foods had cash sales of $787,000 during the month of August. Sales taxes of 7% were                                           collected on the sales.  Prepare an aggregate journal entry to record the sales revenue and sales tax for the                                           month.  10.1-34Model Maker sold 6,000 one-year prepaid subscriptions.
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11.1-1The current portion of notes payable is the principal amount that will be paid within one year of the                                           balance sheet date. 11.1-2The current portion of notes payable must be reported on the balance sheet combined with the long-term                                           portion under long-term liabilities. 11.1-3When a long-term.
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10.3-31Tom’s gross pay for the week is $800.  Tom’s deduction for federal income tax is based on a rate of                                           18%.  Tom has no voluntary deductions.  Tom’s yearly pay is under the limit for OASDI.  What is the                                           amount of Tom’s net pay? A)    $594.80 B)    .
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10.2-31Arc Digital starts the year with balances in its Estimated warranty payable account and Warranty expense                                           account as shown below.  During the year, there were $190,000 of sales and $3,200 of warranty repair                                           payments.  Arc Digital estimates warranty expense at 1.5% of sales. Estimated warranty.
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11.2-1Bonds are long-term liabilities issued to multiple lenders, usually in increments of $1,000. 11.2-2The company will repay the principal amount of the bond on the maturity date. 11.2-3If a bond is issued at a discount, it will sell for more than face value. 11.2-4If a bond is issued at a premium, it will.
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11.1-11On July 1, 2013, Avery Services issued a long-term note payable for $10,000. It is payable over a 5- year                                           term in $2,000 installments on July 1 of each succeeding year.  When the note was issued, the principal                                           amount was recorded in Long-term notes.
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10.3-1Gross pay is the total amount of salary, wages, commissions, and bonuses earned by an employee during a pay period. 10.3-2The old age, survivors, and disability insurance portion of FICA taxes is imposed on all of an individual                                           employee's earnings.  10.3-3Payroll tax expense includes the employer's portion.
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