Discount on Notes Payable is treated as a reduction of notes payable on the balance
sheet.
a. True
b. False
Verilux Company sold merchandise to Flight Corp. on November 1, 2014, for $10,000.
Verilux accepted a promissory note from Flight Corp. for $10,000. The note has a term
of 5 months and a stated interest rate of 7%. Verilux’s accounting period ends on
December 31, 2014. What amount should Verilux recognize as interest revenue on the
maturity date of the note?
a. $ -0-
b. $ 175.00
c. $ 291.67
d. $ 420.00
There is one single format for a work sheet.
a. True
b. False
When using the direct method, how is depreciation expense recorded on the statement
of cash flows?
a. Operating activity
b. Investing activity
c. Financing activity
d. Not reported on the statement of cash flows
Chen’s Department Store Chen’s Department Store is a merchandising company that
uses the periodic inventory system. Selected account balances are listed below:
Refer to the account information for Chen’s Department Store. Calculate Chen’s net
sales.
a. $162,000
b. $167,000
c. $170,000
d. $175,000
Which one of the following statements is true?
a. The two primary sources of financing available to corporations are borrowed funds
and funds invested by owners.
b. Financing activities involve the acquisition of property, plant and equipment.
c. Borrowed funds are a more permanent source of financing than funds invested by
owners.
d. Investing activities involve the selling of products or services and the incurring of
expenses related to selling these products and services.
Lakeland Corporation’s endÂofÂyear balance sheet consisted of the following amounts:
What is Lakeland’s retained earnings balance at the end of the current year?
a. $13,000
b. $34,000
c. $76,000
d. $173,000
From the following list, identify whether the change in the account balance during the
year would be reported as an operating (O), an investing (I), or a financing (F) activity
or not separately reported on the statement of cash flows (N). Assume that the indirect
method is used to determine the cash flows from operating activities.
a. O – Operating
b. I – Investing
c. F – Financing
d. N – Not separately reported on the Statement of Cash Flows
Current maturities of long-term debt
Several items from the financial statements of Standard Tires are listed below. Use the f
ollowing answer choices to identify the type of accountf
or each item listed. Place your answers in the space provided.
a. Assets
b. Liabilities
c. Revenues
d. Expenses
e. Owners’ equity Accounts receivable
For each of the following items, indicate whether it would appear on a statement of
cash flows prepared using the Direct method (a) or the Indirect method (b).
a. Direct
b. Indirect
Increase in accounts receivable
Coglin, Inc. incurred a net loss of $20,000 for 2014. The balance sheet at December 31,
2014, for Coglin, Inc., includes the following items:
A) Determine Coglin’s current ratio and working capital. B) Beyond the information
provided in your answers to “A,” what does the composition of Coglin’s current assets
tell you about its liquidity. C) What other information would one need to fully access
Coglin’s liquidity?
Tara Corp. reported the following information for 2015 and 2016.
How much cash was collected from customers during 2016?
a. $741,000
b. $745,000
c. $749,000
d. $753,000
Several accounts from the financial statements of Madison Company are listed below.
In the two columns provided for answers, indicate the type of account and the normal
account balance. Use the following identification codes for your answers:
What is the name of the formalized commitment of the IASB and the FASB to converge
U.S. and international accounting standards?
a. The Sarbanes-Oxley Act
b. The Norwalk Agreement
c. The IFRS Foundation
d. The Conceptual Framework