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20 May 2019

1 of 50

Investments in debt securities, such as bonds, may be classifiedas either current or long-term assets.

True
False

Question

2 of 50

Marketable securities that are held until the due date of thesecurities are

trading and held-to-maturitysecurities.
available-for sale securities.
held-to-maturity securities.
trading securities.

Question

3 of 50

Which of the following business types is most common as measuredby the amount of business transacted?

Government entities
Proprietorships
Partnerships
Corporations

Question

4 of 50

Depreciation is based upon cost, useful life, and salvagevalue.

True
False

Question

5 of 50

Because depreciation is not cash-based, it is NOT reported inthe direct method of the statement of cash flows.

True
False

Question

6 of 50

A company has a petty cash fund of $200. At the end of themonth, $6.41 remains in the fund along with $190.96 in variousreceipts. The journal entry to replenish the fund would show adebit(s) to

various expenses for $190.96 andCash Short of $2.63.
Cash for $190.96.
Cash for $193.59.
various expenses for $190.96 andCash Over of $2.63.

Question

7 of 50

A 12-month, 8% note dated August 1, 2013 for $5,000 would haveaccrued interest payable on December 31, 2013 of $166.67.

True
False

Question

8 of 50

Warranty expense must be estimated and matched to revenues.

True
False

Question

9 of 50

Upgrading the RAM on a computer would be an example of a(n)

capital expense.
betterment.
ordinary repair.
extraordinary repair.

Question

10 of 50

The formula for the quick ratio is quick assets divided bynoncurrent assets.

True
False

Question

11 of 50

Which of the following are considered to be legal entities thatexist separate and distinct from their owners?

Sole proprietorships
Organizations with more than 100partners
Partnerships
Corporations

Question

12 of 50

Patents and copyrights can be seen, held, or touched.

True
False

Question

13 of 50

Which of the following would be considered part of the cost ofmachinery and equipment?

Repairs after start-up
Insurance after purchase
Maintenance
Sales taxes

Question

14 of 50

The business or person that signs the note and promises to paythe required amount is called the payee.

True
False

Question

15 of 50

Conley Company has a petty cash fund of $300. At the end of themonth, $42.38 remains in the fund along with $260.75 in variousreceipts. The journal entry to replenish the fund would bedebit

Petty Cash for $257.62 and creditCash for $257.62.
various expenses, $260.75 andcredit Cash for $260.75.
various expenses, $260.75, creditCash Over for $3.13, and credit Cash for $257.62.
various expenses, $254.49, debitCash Short for $3.13, and credit Cash for $257.62.

Question

16 of 50

Neither land nor land improvements are depreciated.

True
False

Question

17 of 50

Using a 365-day year, the maturity value of a 180-day note for$2,700 at 9% annual interest is (rounded to the nearest cent)

$2,819.84.
$2,821.50.
$2,943.00.
$ 119.84.

Question

18 of 50

On January 1, Bestway, Inc. signed a $175,000, 8%, 30-yearmortgage that requires semiannual payments of $7,735 on June 30 andDecember 31 of each year. The journal entry to record the secondsemiannual payment would be (round interest calculation to thenearest dollar) to

debit Interest expense, $764; debitMortgage payable, $6,971; credit Cash, $7,735.
debit Mortgage payable, $7,735;credit Cash, $7,735.
debit Interest expense, $6,971;debit Mortgage expense, $764; credit Cash, $7,735.
debit Interest expense, $6,971;debit Mortgage payable, $764; credit Cash, $7,735.

Question

19 of 50

Allied Industries purchased a piece of equipment for $65,000with an estimated salvage value of $15,000 on January 1. Itsestimated life is five years. To the nearest dollar, what is theequipment's depreciation using double-declining-balance for yeartwo?

$ 26,000
$ 12,000
$ 20,000
$ 15,600

Question

20 of 50

Payroll is also called employee compensation and can consist ofmany parts.

True
False

Question

21 of 50

The number of shares of stock that a corporation is given theright to sell is called

authorized stock.
issued stock.
outstanding stock.
capital stock.

Question

22 of 50

Which of the following would NOT be considered part of the costof machinery and equipment?

In-transit insurance costs
Delivery charges
Installation costs
Repairs and maintenance afterstart-up

Question

23 of 50

Equipment costing $118,000 has accumulated depreciation of$92,000. The equipment is a trade-in for new equipment costing$187,000. If the trade-in value received for the old equipment is$30,000, the journal entry to record this transaction is to

debit Equipment (New) for $187,000,debit Accumulated Depreciation – Equipment for $92,000, creditEquipment (Old) for $118,000, and credit Cash for $161,000.
debit Equipment (New) for $187,000and credit Cash for $187,000.
debit Accumulated Depreciation –Truck for $50,000, debit Loss on Disposal $6,000, and credit Truckfor $56,000.
debit Equipment (New) for $187,000,debit Accumulated Depreciation – Equipment for $92,000, debit Losson Exchange of Assets for $26,000, credit Equipment (Old) for$118,000 and credit Cash for $187,000.

Question

24 of 50

Liberty Company has declared a $40,000 cash dividend toshareholders. The company has 5,000 shares of $20-par, 6% preferredstock and 10,000 shares of $15-par common stock. The preferredstock is cumulative. How much will be distributed to the preferredand common stockholders on the date of payment if the preferredstock is $12,000 in arrears?

$18,000 preferred, $22,000common
$20,000 preferred, $20,000common
$6,000 preferred, $34,000common
$40,000 preferred, $0 common

Question

25 of 50

In accounting, what is the meaning of capitalized?

Capitalized means that a given cityhas been selected as a government center.
Capitalized means that the cost ofan asset is recorded as a debit (increase) to expense.
Capitalized means that a liabilityaccount is credited (increase
Capitalized means that an assetaccount is debited (increased) for the cost of an asset.

Question

26 of 50

Interest is an expense to the debtor and income to thecreditor.

True
False

Question

27 of 50

Cash consists of anything that a bank will take as adeposit.

True
False

Question

28 of 50

The cost of long-term assets must be allocated to an expense asthe asset is used up.

True
False

Question

29 of 50

The process of acquiring merchandise from a supplier begins withthe

purchase order.
check for payment.
receiving report.
invoice.

Question

30 of 50

Appleway Corporation purchases a machine for $125,000. It has anestimated salvage value of $10,000 and is expected to produce50,000 units in its lifetime. During the first year of operation,it produced 14,500 units. To the nearest dollar, the depreciationfor the first year under the units of production method will be

$35,500.
$31,250.
$36,250.
$33,350.

Question

31 of 50

Book value is depreciable cost minus accumulateddepreciation.

True
False

Question

32 of 50

The records of Inland Equipment showed a net loss of $30,000,depreciation expense of $25,000, and an increase in supplies onhand of $5,000. The amount of net cash flow from operatingactivities using the indirect method is

($10,000).
$15,000.
$20,000.
($15,000).

Question

33 of 50

Retained earnings represent internally generated capital.

True
False

Question

34 of 50

A company issues 15,000 shares of its $25 par common stock for$29 per share. The amount to be debited to Cash is

$435,000.
$375,000.
$405,000.
$ 60,000.

Question

35 of 50

On September 1, 2012, Juno Corp. lent $2,400 to Bill Askins on asix-month 8% promissory note. The journal entry to record the notefor Juno Corp. would be to:

debit Note Receivable/Tim, $2,400;credit Cash, $2,400.
debit Note Receivable/Tim, $96;credit Interest Income, $96.
debit Note Receivable/Tim, $2,496;credit Cash, $2,496.
debit Cash, $2,400; credit NotePayable/Tim, $2,400.

Question

36 of 50

Separation of duties is essential for internal control over cashreceipts and cash payments.

True
False

Question

37 of 50

Which of the following would indicate poor internal control overaccounts receivable?

The same person handling cashreceipts also records the accounts receivable transactions.
The person handling cash receiptspasses the receipts to someone who enters them into accountsreceivable.
The mailroom employees open themail and give the cash receipts to another employee.
The person who handles accountsreceivable would not write off accounts as uncollectible.

Question

38 of 50

Limited liability means that the stockholders of a corporationshare a personal liability for all debts of the corporation.

True
False

Question

39 of 50

Accumulated depletion is a(n)

contra-asset account.
cash account.
contra-liability account.
expense account.

Question

40 of 50

Allied Industries reported net income of $52,000, depreciationexpenses of $13,000, a gain on a land sale of $3,000, and adecrease in accounts receivable of $1,500. Under the indirectmethod, net cash flows from operations is

$63,500.
$66,500.
$69,500.
$60,555.

Question

41 of 50

The portion of stockholders' equity that can be used fordividends is referred to as legal capital.

True
False

Question

42 of 50

Franklin Industries had total assets of $560,000; totalliabilities of $250,000; and total stockholders' equity of$310,000. Franklin Industries debt ratio is

55.4%.
28.7%.
44.6%.
80.6%.

Question

43 of 50

Financial analysis is used to predict the future of abusiness.

True
False

Question

44 of 50

Online banking should NOT be used to reconcile the bankaccount.

True
False

Question

45 of 50

Costs of testing machinery or equipment before they are usedwould be included in the price of the machinery or theequipment.

True
False

Question

46 of 50

There are two methods for accounting for uncollectiblereceivables.

True
False

Question

47 of 50

Assets that are NOT expected to provide benefits for a number ofaccounting periods are called

current assets.
property, plant, andequipment.
long-term assets.
natural resources.

Question

48 of 50

The allowance method of accounting for bad debts is required byGAAP because of the materiality principle.

True
False

Question

49 of 50

A stock dividend affects total stockholders' equity.

True
False

Question

50 of 50

Realized gains and losses only occur when the security is soldfor more or less than the original cost.

True
False

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Tod Thiel
Tod ThielLv2
21 May 2019

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