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Study Resources (Accounting)

25) Which of the following concepts represents time value of money? A) the concept that money becomes obsolete over time B) the concept that money earns income over time C) the concept that money loses its purchasing power over time D) the concept that money can be converted into other currencies over time 26) If.
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11) Partisan Services purchased 10 delivery vehicles by issuing a 10-year installment Note Payable for $320,000. This transaction would be shown in the investing activities section of the statement of cash flows. 12) While preparing the statement of cash flows using the indirect method, Depreciation Expense is subtracted from Net Income.
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15) The interest rate on which cash payments to bondholders are based is the: A) market rate. B) discount rate. C) stated rate. D) amortization rate. 16) An instrument that matures at one specified time is known as a: A) preferred share. B) common share. C) bond. D) letter of credit. 17) Which of the following describes a serial bond? A).
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71) Allen Services purchased 20 delivery vehicles by issuing a 20-year installment Note Payable for $720,000. How would this transaction be shown on the statement of cash flows? A) in the investing activities section B) in the non-cash investing and financing activities section C) in the operating activities section D) in the financing activities.
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41) Available-for-sale (AFS) investments that are planned to be held longer than a year are reported as: A) equity. B) current assets. C) long-term assets. D) either current assets or long-term assets. 42) Available-for-sale (AFS) investments are reported as ________ if the business expects to sell them within one year. A) current assets B) equity C) long-term assets D).
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Learning Objective 13-6 1) Earnings per share is calculated as net income plus preferred dividends divided by the weighted average number of common shares outstanding. 2) A higher price/earnings ratio signifies a higher return on investment. 3) The rate of return on common stockholders' equity shows the relationship between net income available to.
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61) Lopez Corp. uses the indirect method to prepare its statement of cash flows. Refer to the following information for the year 2014: 1) Long-Term Notes Payable, beginning balance, $80,000 2) Long-Term Notes Payable, ending balance, $76,000 3) Common Stock, beginning balance, $3,000 4) Common Stock, ending balance, $26,000 5) Retained Earnings, beginning balance, $75,000 6).
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11) Held-to-maturity investments are categorized as current assets or long-term assets on the balance sheet, depending on the maturity date. 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 15-3 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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65) Gordon Corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $11.50 per share. Common stock, $5 par, 190,000 shares authorized, 140,000 shares issued $700,000 Paid-in capital in excess of par—Common 120,000 Retained earnings 290,000 Total stockholders' equity $1,110,000 After a 2-for-1 stock split, what would be the number of.
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31) Beige Corporation pays $500,000 to acquire 40% of the equity securities of Olive Technologies on May 5, 2015. This investment will be classified as a(n): A) trading investment. B) available for sale. C) significant interest investment. D) held-to-maturity. 32) Beige Corporation pays $500,000 to acquire 40% of the equity securities of Olive Technologies on.
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35) Blanding Company issues $1,000,000 of 8%, 10-year bonds at 98 on February 28, 2015. The bond pays interest on February 28 and August 31. On August 31, 2015, how much cash did Blanding pay out to bondholders? A) $41,000 B) $40,000 C) $80,000 D) $39,000 36) The Amazing Widget Company issues $500,000 of 6%,.
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1) Companies can report a negative amount in retained earnings. 2) Companies usually report their retained earnings restrictions on the balance sheet. 3) The statement of retained earnings reports how the company's retained earnings balance changed from the beginning of the period to the end of the period. 4) A deficit occurs when.
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Learning Objective 16-3 1) Free cash flow is calculated by adding cash payments planned for investments in long-term assets and cash dividends to the amount of net cash provided by operating activities. 2) If an investor wants to know how much cash a company can free up for new opportunities, such as.
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2) Avatar Company uses the indirect method to prepare its statement of cash flows. Using the worksheet shown below, enter the adjustments needed to record Depreciation Expense for the year of 2014 of $12,000. Avatar Company Spreadsheet for Statement of Cash Flows Year Ended December 31, 2014 BalanceTransaction AnalysisBalance Panel A—Balance Sheet:Dec 31, 2013DebitCreditDec 31,.
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25) A company's Inventory account increased $27,900 and its Accounts Payable account decreased $19,500 during the year. The Accounts Payable relates only to the acquisition of inventory. Sales were $795,300 and Cost of Goods Sold was $549,400. What was the payment made to the suppliers of inventory? A) $577,300 B) $568,900 C) $596,800 D).
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31) Which of the following is an example of investment income from securities? A) deferred tax assets B) depreciation of long-term assets C) sale of fixed assets D) interest earned from debt investments 32) Short-term investments: A) include debt and equity securities that the investor expects to hold for more than a year. B) are investments in.
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Learning Objective 16-2 1) Issuing preferred stock to stockholders in exchange for cash would be shown under the financing activities section of the statement of cash flows. 2) Buying property, plant and equipment for cash would be considered a cash outflow for the financing activities section of the statement of cash flows. 3).
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Learning Objective 14-1 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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Learning Objective 14-5 1) The United Way Payable account would normally be shown on the balance sheet under current liabilities. 2) FICA—OASDI tax payable would normally be shown on the balance sheet under long-term liabilities. 3) Federal Unemployment Taxes Payable is typically shown on the balance sheet under the long-term liabilities section. 4) The.
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31) Which of the following sections of the statement of cash flows include activities that increase and decrease long-term liabilities and stockholders' equity? A) the financing section B) the operating section C) the investing section D) the non-cash investing and financing section 32) Which of the following sections of the statement of cash flows include.
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21) Aurum Services acquired 100,000 shares of Gamma Metals on January 1, 2015. Gamma pays a cash dividend of $0.25 per share on March 2, 2015. With the current investment, Aurum Services holds 8% of Gamma. In the journal entry on March 2, 2015: A) Long-term Investments—Available-for-Sale will be credited. B) Dividend.
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Learning Objective 14-4 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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15) Davis Company uses the direct method to prepare its statement of cash flows. Refer to the following information reported for the year 2014: Operating expenses, $26,000 Accrued Liabilities, beginning balance, $3,000 Accrued Liabilities, ending balance, $5,000 What amount was paid to suppliers for operating expenses on a cash basis? A) $29,000 B) $28,000 C) $24,000 D) $31,000 16).
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11) Consolidated statements combine the balance sheets, income statements, and cash flow statements of the parent company with those of its controlling interest affiliates. 12) Consolidation accounting is the way to combine the financial statements of two or more companies that have the same owners. 13) Which of the following is true.
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35) Avatar Company uses the direct method to prepare its statement of cash flows. Refer to the following financial statement information for the year ending December 31, 2015: Avatar Company Comparative Balance Sheet December 31, 2015 and 2014 Increase / 20152014 (Decrease) Cash$33,000$13,000$20,000 Accounts Receivable29,00036,000(7,000) Inventory56,00029,00027,000 Plant and Equipment, net126,00092,00034,000 Total Assets$244,000$170,000$74,000 Accounts Payable$9,000$13,000$(4,000) Accrued Liabilities7,0003,0004,000 Long-term Notes Payable70,00079,000(9,000) Total Liabilities$86,000$95,000$(9,000) Common Stock$55,000$3,000$52,000 Retained Earnings115,00078,00037,000 Treasury Stock(12,000)(6,000)(6,000) Total.
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11) When there is an unrealized loss on trading investments, the ________ will decrease. A) total equity B) cash C) total liabilities D) long term investments 12) Sinopia Corporation reported trading investments of $15,000 on December 31, 2015. The company realizes a decrease of $3,000 in the fair value of the trading investments by the.
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Learning Objective 16-5 1) Genius Inc. uses the indirect method to prepare its statement of cash flows. Using the worksheet shown below, enter the adjustments needed to record Net Income for the year ended December 31, 2014 of $49,000. Genius Inc. Spreadsheet for Statement of Cash Flows Year Ended December 31, 2014 BalanceTransaction AnalysisBalance Panel A—Balance.
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11) A business's cash receipts and cash payments for a specific period are reported on a(n): A) income statement. B) balance sheet. C) cash flow statement. D) cash reconciliation statement. 12) Which of the following is one of the purposes of the statement of cash flows? A) to predict future Net Income B) to evaluate management decisions C).
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5) Although the direct method is easier to use, the Financial Accounting Standards Board (FASB) prefers the indirect method of reporting cash flows from operating activities. 6) The amount of net cash flow from operating activities will be different in the direct and indirect methods when preparing the statement of cash.
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41) Walker Corp. uses indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet: How will the change in inventory be shown on the statement of cash flows? A) positive cash flow under the operating activities section B) negative cash flow under the operating.
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Learning Objective 13-4 1) Treasury stock is a contra equity account. 2) The journal entry for the purchase of treasury stock includes a credit to the Cash account. 3) Treasury stock is recorded at cost without reference to par value. 4) The purchase of treasury stock: A) decreases both assets and stockholders' equity. B) increases both.
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Learning Objective 16-1 1) The statement of cash flows explains why net income as reported on the income statement does not equal the change in the cash balance. 2) Investors and management use the statement of cash flows to evaluate a firm's profitability. 3) Operating activities on a statement of cash flows include.
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21) A debt security: A) represents a credit relationship with another company or governmental entity, and typically pays interest for a fixed period. B) represents stock ownership in another company and sometimes pays dividends. C) is a standardized contract between two parties to buy or sell an underlying security at a predetermined price.
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