1) What are the rights generally granted to common stockholders?
2) Forrest’s Cycle Shop uses a perpetual inventory accounting system and had the
following transactions during the month of July:
Prepare the required journal entries that Forrest’s Cycle Shop must make to record these
transactions.
3) Explain what a predetermined overhead rate is, how it is calculated, and why it is
used.
4) The number of shares that a corporation’s charter allows it to sell is the
____________________ stock.
5) Prepare a classified balance sheet for Martin Air Freight based on the adjusted trial
balance shown below.
*$2,000 of the long-term note payable is due during the next year.
6) After preparing an (unadjusted) trial balance at year-end, R. Chang of Chang
Window Company discovered the following errors:
1> Cash payment of the $225 telephone bill for December was recorded twice.
2> Cash payment of a note payable was recorded as a debit to Cash and a debit to Notes
Payable for $1,000.
3> A $900 cash withdrawal by the owner was recorded to the correct accounts as $90.
4> An additional investment of $5,000 cash by the owner was recorded as a debit to R,
Chang, Capital and a credit to Cash.
5> A credit purchase of office equipment for $1,800 was recorded as a debit to the
Office Equipment account with no offsetting credit entry.
Using the form below, indicate whether the error would cause the trial balance to be out
of balance by placing an X in either the yes or no column. Would the error cause the
trial balance to be out of balance?
Would the error cause the trial balance to be out of balance?
7) __________________ means that partners can commit or bind the partnership to any
contract within the scope of the partnership business.
8) Identify several opportunities in accounting and distinguish between private
accounting and public accounting.
9) _________________ refers to a plant asset that is no longer useful in producing
goods or services with a competitive advantage because of new inventions and
improvements.