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1) preferred stock has contractual preference over common stock in certain areas.
2) the payment of a liability decreases both cash and accounts payable.
3) a $20,000, 8%, 9-month note payable requires an interest payment of $1,200 at
maturity.
4) a stockholder has the right to vote in the election of the board of directors.
5) in a promissory note, the party to whom payment is to be made is called the maker.
6) current maturities of long-term debt refers to the amount of interest on a note payable
that must be paid in the current year.
7) the normal balance of sales returns and allowances is a credit.
8) an installment note calling for equal total payments each period will result in a
principal portion that decreases in each successive period.
9) the sale of an asset on credit for what it cost
a.increases assets and liabilities.
b.decreases assets and liabilities.
c.leaves total assets unchanged.
d.decreases assets and increases liabilities.
10) which of the following is not true regarding a promissory note?
a.promissory notes may not be transferred to another party by endorsement
b.promissory notes may be sold to another party
c.promissory notes give a stronger legal claim to the holder than accounts receivable
d.promissory notes may be bearer notes and not specifically identify the payee by name
11) the following partial amortization schedule is available for courtney company who
sold $300,000, five-year, 10% bonds on january 1, 2012 for $312,000 and uses annual
straight-line amortization.
which of the following amounts should be shown in cell (iii)?
a.$6,000
b.$12,000
c.$2,400
d.$1,200
12) under a perpetual inventory system, acquisition of merchandise for resale is debited
to
a.the inventory account
b.the purchases account
c.the supplies account
d.the cost of goods sold account
13) a stock investment classified as trading securities is purchased for $74,000. at year
end, when the market value of the stock is $65,000, the adjusting entry includes a
a.credit to stock investments
b.debit to loss on sale of stock investment
c.credit to market-adjustmenttrading
d.credit to unrealized lossincome
14) abc company accepted a national credit card for a $4,000 purchase. the cost of the
goods sold is $3,200. the credit card company charges a 3% fee. what is the impact of
this transaction on net operating income?
a.increase by $776
b.increase by $800
c.increase by $680
d.increase by $3,880
15) benedict company compiled the following financial information as of december 31,
2012:
benedicts stockholders equity on december 31, 2012 is:
a.$210,000
b.$220,000
c.$160,000
d.$240,000
16) if no-par stock is issued without a stated value, then
a.the par value is automatically $1 per share
b.the entire proceeds are considered to be legal capital
c.there is no legal capital
d.the corporation is automatically in violation of its state charter
17) phill co. has equipment that cost $54,000 and has been depreciated $30,000.
instructions
record entries for the disposal under the following assumptions.
(a)it was scrapped as having no value.
(b)it was sold for $29,000.
(c)it was sold for $18,000.
18) the following data is available for box corporation at december 31, 2012:
based on the data, how many shares of common stock are outstanding?
a.30,000
b.20,000
c.29,920
d.19,920
19) the following information pertains to marsh company. assume that all balance sheet
amounts represent average balance figures.
what is marshs payout ratio?
a.50%
b.30%
c.20%
d.7.5%
20) donaldson company has the following accounts in its general ledger at july 31:
accounts receivable $40,000 and allowance for doubtful accounts $2,500. during
august, the following transactions occurred.
journalize the transactions.
21) the following are sales of the holiday store during february. the store sells seasonal
holiday items.
determine the balance in accounts receivable at 2/28.
22) two sisters operate a bed and breakfast on the coast of maine. as customers make
reservations they are required to pay cash in advance equal to one-half of the rate for
their stay. how should the sisters account for the cash received as reservations are
made?
23) assuming that the allowance method is being used, prepare general journal entries
without explanations to record the following transactions.
24) inventory written down under lower-of-cost-or market may be written back up to
original cost in a subsequent period under
25) what are the advantages to a business of being formed as a corporation? what are
the disadvantages?
26)
strickman company uses the allowance method for estimating uncollectible accounts.
prepare journal entries to record the following transactions:
27) compute the missing amount for each of the following notes:
28) presented here are the components in rowland companys income statement.
determine the missing amounts.
