Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Miguel Foods, Inc. purchased a patent at the beginning of 2013 for $350,000. Economic
benefits were expected for 7 years, but the patent's legal life was 20 years. Also during
2013, the company incurred research and development costs of $270,000. Patent
amortization expense for 2013 is
a. $11,000
b. $17,500
c. $31,000
d. $50,000
Which of the following statements is true regarding the treatment of leases on the
financial statements?
a. U.S. GAAP prohibits the presentation of leases on the financial statements since they
are off-balance sheet transactions.
b. U.S. GAAP criteria for lease capitalization are less strict than IFRS.
c. The criteria concerning whether a lease is a capital lease are very different for IFRS
and U.S. GAAP.
d. The criteria required for lease capitalization under IFRS are considered more like
guidelines rather than strict rules.
a. A liability resulting from the signing of a promissory note.
b. A measure of how long it takes to collect receivables.
c. A written promise to repay a definite sum of money on demand or at a fixed or
determinable date in the future.
d. The length of time a note is outstanding, that is, the period of time between the date it
is issued and the date it matures.
e. The party that will receive the money from a promissory note at some future date.
f. The process of selling a promissory note.
g. The date the promissory note is due.
h. The amount of cash the maker is to pay the payee on the maturity date of the note.
i. The difference between the principal amount of the note and its maturity value.
j. An asset resulting from the acceptance of a promissory note from another company.
k. Securities issued by corporations and governmental bodies as a form of borrowing.
l. Securities issued by corporations as a form of ownership in the business.
m. The party that agrees to repay the money for a promissory note at some future date.
n. The amount of cash received, or the fair value of the products or services received,
by the maker when a promissory note is issued.
Number of days' sales in receivables
Select the term from the list below that matches each of the following six descriptions.
a. Interest
b. Maturity value
c. Principal
d. Payee
e. Discounting
f. Term
g. Recourse
h. Implicit
i. Maker
The length of time a note is outstanding-the period of time between the date it is issued
and the date it matures
Each account has a normal balance. For the following list of accounts, indicate whether
the normal balance of each is a debit or a credit.
a. Debit
b. Credit
Prepaid Insurance
U.S. standards do not require a classified balance sheet, but International accounting
standards require companies to present classified balance sheets with liabilities
classified as either current or long term.
a. True
b. False
Match the selected items from a classified balance sheet and multiple-step income state
ment to the section in which they would appear on the classified balance sheetor the inc
ome statement.
a. Current Assets (balance sheet)
b. Property, Plant, & Equipment (balance sheet)
c. Current Liabilities (balance sheet)
d. Long-term Liabilities (balance sheet)
e. Stockholders' Equity (balance sheet)
f. Operating Revenue (income statement)
g. Operating Expenses (income statement)
h. Other Revenue & Expenses (income statement)
i. Income Taxes (income statement)
Wages payable
Floors, Inc. offers terms of 2/10, n/30 to credit customers. Tile Magic Corp. purchased
100 tile cutters with a list price of $20 each on August 5, 2015, on account. If Tile
Magic Corp. pays the amount of the invoice for its purchase on August 14, 2015, how
much cash will Floors receive from Tile Magic Corp.?
a. $1,764
b. $1,800
c. $1,960
d. $2,000
The book value per share for a corporation is
a. the market price of the stock.
b. the cost of investments in stock of other corporations.
c. based on the excess of total assets over total liabilities.
d. the amount stockholders would receive if they sold their shares back to the
corporation.
a. A liability resulting from the signing of a promissory note.
b. A measure of how long it takes to collect receivables.
c. A written promise to repay a definite sum of money on demand or at a fixed or
determinable date in the future.
d. The length of time a note is outstanding, that is, the period of time between the date it
is issued and the date it matures.
e. The party that will receive the money from a promissory note at some future date.
f. The process of selling a promissory note.
g. The date the promissory note is due.
h. The amount of cash the maker is to pay the payee on the maturity date of the note.
i. The difference between the principal amount of the note and its maturity value.
j. An asset resulting from the acceptance of a promissory note from another company.
k. Securities issued by corporations and governmental bodies as a form of borrowing.
l. Securities issued by corporations as a form of ownership in the business.
m. The party that agrees to repay the money for a promissory note at some future date.
n. The amount of cash received, or the fair value of the products or services received,
by the maker when a promissory note is issued.
Term
On January 1, 2015, Clarkson, Inc. issued $400,000, 10-year, 10% bonds for $354,200.
The bonds pay interest on June 30 and December 31. The market rate is 12%. What is
the carrying value of the bonds after the first interest payment is made on June 30,
2015?
a. $352,960
b. $354,200
c. $355,452
d. $400,000
Operating assets with no physical properties are called
a. current assets
b. intangible assets
c. plant assets
d. property, plant, and equipment
Latahmer Corporation is reconciling its May bank account. For each item listed, state
how it would be handled on the bank reconciliation.
a. Addition to bank balance
b. Subtraction from bank balance
c. Addition to book balance
d. Subtraction from book balance
e. Would not appear on the May reconciliation
Interest earned on the checking account for May
Suma Corp. reported the following information for 2015 and 2016.
How much cash was paid for salaries during 2016?
a. $55,100
b. $55,200
c. $57,000
d. $58,900
