What types of accounts are Treasury Stock and Paid-in Capital from Treasury Stock
Transactions? Treasury StockPaid-in Capital from Treasury Stock Transactions
a. contra equity stockholders’ equity
b. contra equity contra equity
c. stockholders’ equity stockholders’ equity
d. retained earnings retained earnings
A transaction that represents both an investing and financing activity but that does not
involve the receipt or payment of cash. Match these terms with their correct definition.
a. Cash flow adequacy ratio
b. Cash flows from financing activities
c. Cash flows from investing activities
d. Cash flow from operating activities
e. Direct method
f. Free cash flow
g. Income statement
h. Indirect method
i. Noncash investing & financing activities
j. Statement of cash flows
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Identify where each of the following accounts would be reported on the financial
statements. (Choices may be used more than once.)
a. Balance Sheet-Property, Plant, and Equipment
b. Balance Sheet-Intangible Assets
c. Balance Sheet-Current Assets
d. Balance Sheet-Other Assets
e. Income Statement-Operating Section
f. Income Statement-Other Revenue and Expense Section
Refer to Dance Town Academy. How will the outstanding checks be handled on a bank
reconciliation?
Dance Town Academy The items listed below were identified while preparing a bank
reconciliation for the company’s checking account as of March 31, 2013.
a. add to the balance from the company records
b. subtract from the balance from the company records
c. add to the bank statement balance
d. subtract from the bank statement balance
Refer to General Lighting. The $150 price of each battery includes a $3 federal excise
tax. Which of the following statements is true regarding the proper accounting
treatment for the taxes related to this transaction?
General Lighting During the first quarter of 2013, the company sold 4,000 batteries on
credit for $150 each plus state sales tax of 6%. a. They are recorded as additions to
revenue.
b. They are recorded as unearned revenues on the company’s balance sheet.
c. They are recorded as a current liability owed to the taxing authority.
d. They are recorded as expenses in the same period as the corresponding sales revenue.
Research and development expense
Several items from the financial statements of Fireside Tires are listed. Use the
following choices to identify the type of account for each item listed. (Choices may be
used more than once.)
a. Assets
b. Liabilities
c. Revenues
d. Expenses
e. Stockholders’ Equity
Any information that would make a difference to financial statement users should be
reported.
Match the following principles with their correct definition.
Match the following principles with their correct definition.
a. Comparability g. Historical cost
b. Conservatism h. Matching
c. Double-entry accounting i. Monetary unit
d. Economic entity j. Revenue recognition
e. Going concern k. Time period
f. Full disclosure
Refer to Gainesville Truck Center. Assuming December 31st falls on a Thursday, the
year-end adjusting entry would
Gainesville Truck Center This company has a weekly payroll of $10,000 for its
employees who work Monday through Friday. Federal and state income taxes are
withheld in the amounts of $1,700 and $400, respectively, and FICA taxes are withheld
at a mandatory rate of 7.65% (6.2% for Social Security and 1.45% for Medicare). In
addition, the federal and state unemployment taxes are applied at rates of 2% and 5%,
respectively. The company’s year-end is December 31. a. increase wages expense by
$8,000.
b. decrease wages payable by $2,000.
c. decrease cash by $8,000.
d. increase wages payable by $2,000.
The effect of recording depreciation for the year is a(n)
a. decrease in assets and a decrease in net income.
b. decrease in assets but no change in owners’ equity.
c. increase in assets and an increase in net income.
d. decrease in net income and no change in assets.
Equity and debt investments that management intends to sell in the future, but not
necessarily in the near term
Match the following terms to their correct definition:
a. equity security j. held-to-maturity securities
b. debt security k. amortized cost method
c. passive l. fair value method
d. significant influence m. unrealized gains and losses
e. control n. equity method
f. parent o. consolidation worksheet
g. subsidiary p. minority interest
h. trading securities q. business combination
i. available-for-sale securities r. Goodwill
On January 1, 2012, a company issued 10,000 shares of 10%, $10 par value cumulative
preferred stock. No dividends were declared in 2012 or 2013. In 2014, the company
declared a dividend of $200,000. How much of the 2014 dividend should be paid to
common stockholders?
a. $170,000
b. $190,000
c. $197,000
d. $200,000
When evaluating a company’s solvency, an investor’s major concern is whether all debt
has been properly recorded.
The contract rate is also called the coupon or stated rate.
Refer to Mary Kay Cosmetics. What is the amount paid to suppliers for purchases of
merchandise during 2014?
Mary Kay Cosmetics
Selected data and additional information from the company’s records are presented
below:
Additional information:
Provides that current dividends must be paid to preferred stockholders before any
dividends are paid to common stockholders.
Gross profit divided by net sales is called the ____________________ ratio.
A corporation was incorporated on January 1, 2013. Its corporate charter provided for a
maximum of 1,000,000 shares of common stock to be sold in the future of the
corporation. In January, 150,000 shares were sold to the public and an additional
100,000 shares were sold in October. In November, 15,000 of the issued shares were
bought back by the corporation. Complete the table below as of the end of 2013.
Distinguish between par value and market value. Which measure is the better indicator
of the true value of the stock?