Which one of the following is not a current asset?
A) Cash
B) Supplies
C) Equipment
D) Prepaid Insurance
Assets reported on the balance sheet include:
A) Accounts Receivable, Sales Revenue, and Cash.
B) Equipment, Supplies Expense, and Cash.
C) Accounts Payable, Retained Earnings, and Cash.
D) Accounts Receivable, Equipment, and Cash.
A company made a bank deposit on September 30 that did not appear on the bank
statement dated September 30. In preparing the September 30 bank reconciliation, the
company should:A) deduct the deposit from the bank statement balance.B) send the
bank a debit memorandum.C) deduct the deposit from the September 30 book balance
and add it to the October 1 book balance.D) add the deposit to the end cash balance per
bank statement.
A corporate charter specifies that the company may issue up to 20 million shares of
stock. The company sells 12 million shares to investors and later buys back 3 million
shares. The current number of shares of treasury stock after these transactions have
been accounted for is: A) 3 million shares.
B) 8 million shares.
C) 9 million shares.
D) 17 million shares.
Melrose Inc. buys back 300,000 shares of its stock from investors at $6.50 a share. Two
years later, it reissues this stock for $6.00 a share. The stock reissue would be recorded
with a debit to Cash for:
A) $1.8 million, a debit to Additional Paid-in Capital for $150,000, and a credit to
Treasury Stock for $1.95 million.
B) $1.95 million, a credit to Treasury Stock for $1.8 million, and a credit to Additional
Paid-in Capital for $150,000.
C) $1.95 million and a credit to Treasury Stock for $1.95 million.
D) $1.8 million and a credit to Treasury Stock for $1.8 million.
The classified balance sheet for a company reported current assets of $1,623,850, total
liabilities of $799,540, Common Stock of $1,000,000, and Retained Earnings of
$130,260. The current ratio was 2.5.
Use the information above to answer the following question. Which of the following
statements is not correct?
A) Total Assets are $1,929,800.
B) Total Stockholders ‘ equity is $1,130,260.
C) Noncurrent liabilities are $130,260.
D) The amount of current assets is 2.5 times the amount of current liabilities.
The three key pieces of information that are stated on a bond certificate are the:
A) interest payment, the face value of the bond, and the credit rating of the company.
B) market interest rate, the price of the bond, and the maturity date.
C) stated interest rate, the face value of the bond, and the maturity date.
D) interest payment, the issue price of the bond, and the credit rating of the company.
Which of the following would be included in cash flows from operating activities?
A) Cash received from customers
B) Cash received from an issuance of bonds
C) Cash dividends paid to stockholders
D) Cash used for purchases of equipment
Cash
Beg. Bal. 123,900
(a) 14,700 6,000 (c)
(b) 38,300 5,800 (d)
7,400 (e)
12,000 (f)
11,200 (g)
Use the information above to answer the following question. What is the ending balance
of the Cash account?
A) $219,300
B) $113,300
C) $28,500
D) $134,500
Use the information above to answer the following question. The company would
report net cash provided by (used in) investing activities of:
A) $(1,000).
B) $(2,000).
C) $5,000.
D) $7,000.
At the end of last year, the company’s assets totaled $860,000 and its liabilities totaled
$740,000. During the current year, the company’s total assets increased by $58,000 and
its total liabilities increased by $24,000. At the end of the current year, stockholders’
equity was:
A) $154,000.
B) $120,000.
C) $34,000.
D) $178,000.
A company issues 100,000 shares of preferred stock for $40 per share. The stock has a
fixed dividend rate of 5% and a par value of $3 per share. The company records the
issuance with a debit to Cash for:
A) $4 million and a credit to Preferred Stock for $4 million.
B) $300,000 and a credit to Preferred Stock for $300,000.
C) $4 million, a credit to Preferred Stock for $300,000, and a credit to Additional
Paid-in Capital for $3.7 million.
D) $300,000, a debit for $3.7 million to Long-term Investments , a credit to Preferred
Stock for $300,000, and a credit to Additional Paid-in Capital for $3.7 million.
The Perry Company reported Accounts Receivable, Net of $66,600 at the beginning of
the year and $72,600 at the end of the year If the company’s net sales revenue during
the fourth year was $876,000, what are the days to collect during year? (Round all
calculations to one decimal place.)
A) 12.6
B) 29.0
C) 8.0
D) 34.0
Pandey Inc. had the following activities during the month:
A. Borrowed $7,000,000 cash, signing a promissory note.
B. Bought a building for $800,000, paying $200,000 in cash and signing a promissory
note for $600,000.
C. Rented equipment at a cost of $10,000 per month and issued a check covering six
months’ rent.
D. Provided $104,000 of services and billed customers.
E. Purchased $30,000 of supplies on account.
F. Received a utility bill for the current period in the amount of $1,200.
G. Raised sales prices on 200 units from $400 per unit to $440 per unit.
H. Received a 50% deposit from a customer on a $20,000 order to be filled next month.
Required:
Analyze each of the activities (A) through (H) above with the goal of indicating their
effects on the basic accounting equation by completing the table below. Indicate the
accounts and amounts involved. Include a plus (+) or minus (-) sign before each number
to show its effect on the accounting equation. If the activity should not to be recorded as
a transaction, enter the word “None“ in the first column for that activity.
Which of the following statements about the issuance of bonds at a discount is not
correct?
A) The contra liability account, Discount on Bonds Payable, is amortized each year by
shifting part of its balance to interest expense.
B) As the current date approaches the maturity date, the carrying value of the bond
approaches the face value of the bond.
C) At the date of issuance, the market interest rate was higher than the stated interest
rate.
D) The account used to record the discount is a normal credit balance account.
A corporation prepared its statement of cash flows for the year. The following
information is taken from that statement:
What is the amount of net cash provided by (used in) financing activities?
A) $15,400
B) ($3,300)
C) ($15,400)
D) $3,300
If a company’s P/E ratio is 24 and the company’s EPS is $1.50, then the company’s
stock price is:
A) $36.00.
B) $25.50.
C) $16.00.
D) $6.25.
If a company’s P/E ratio suddenly decreases:
A) you should sell the stock as soon as possible.
B) you should buy more of the stock to increase your average gain.
C) the company probably announced higher earnings forecasts.
D) the market must have reacted to some bad news that is expected to affect the
company in the future.
The cash count sheet determines all of the following except the:
A) cash shortage or overage, if any.
B) amount of cash available for deposit in the bank
C) amount of cash to be reported on the balance sheet.
D) amount of cash received.