When using the effective-interest amortization method, the amount of the interest
payment is calculated using the face value of the bonds and the stated interest rate.
The Dividends account is increased by a debit.
The current period earnings column of the payroll register only includes regular and
overtime earnings.
On the maturity date, the bondholder is paid the face amount of the bond plus the last
interest payment.
The balance in the Bonds Payable account is a credit of $67,000. The balance in the
Discount on Bonds Payable account is a debit of $2,650. The bond’s carrying amount is
$64,350.
A business repays the amount borrowed on a note with cash. Which of the following
accounts is credited?
A) Accounts Payable
B) Cash
C) Notes Payable
D) Notes Receivable
The term “freight out” refers to ________.
A) transportation costs on purchases
B) cost of inventory purchased
C) costs that are not actually paid in cash
D) transportation costs on sales
Which of the following items are included as an operating activity on the statement of
cash flows, using the direct method?
A) purchase of treasury stock
B) payment of dividends
C) issuance of stock
D) payment of interest expense
On January 1, 2017, Zade Manufacturing Corporation purchased a machine for
$41,000,000. Zade’s management expects to use the machine for 33,000 hours over the
next six years. The estimated residual value of the machine at the end of the sixth year
is $44,000. The machine was used for 3,700 hours in 2017 and 5,900 hours in 2018.
What is the depreciation expense for 2017 if the corporation uses the
units-of-production method of depreciation? (Round any intermediate calculations to
two decimal places, and your final answer to the nearest dollar.)
A) $4,592,033
B) $13,666,667
C) $7,322,431
D) $4,596,954
The gain or loss on the sale of a plant asset is determined by comparing market value of
assets received with ________.
A) book value
B) residual value
C) original cost
D) salvage value
A business collects cash from a customer for services that were preformed one month
earlier. Which of the following accounts is credited?
A) Cash
B) Accounts Receivable
C) Service Revenue
D) Accounts Payable
Bryson Services, Inc. performed accounting services for a client in December. A bill
was mailed to the client on December 30. The company received a check by mail on
January 5. Which of the following accounts should appear on the balance sheet as of
December 31 as related to the services performed?
A) Prepaid Expense
B) Accounts Receivable
C) Unearned Revenue
D) None, there is no entry in December.
A business receives $40,000 for services that it will perform over the next four months.
Which of the following accounts is credited?
A) Cash
B) Accounts Payable
C) Service Revenue
D) Unearned Revenue
Which of the following describes working capital?
A) Current assets minus merchandise inventory
B) Current assets minus current liabilities
C) Total debt minus stockholders’ equity
D) Cost of goods sold divided by average merchandise inventory
Which of the following liabilities is created when a company receives cash for services
to be provided in the future?
A) Unearned Revenue
B) Accrued Liability
C) Accounts Payable
D) Estimated Warranty Payable
Preferred stockholders ________.
A) receive a dividend preference over common stockholders
B) are guaranteed that they will not have a loss on their investment
C) generally have voting rights
D) have more investment risk compared to common stockholders
Refer to the following information for Tangent Corporation:- Common Stock, $1.00
par, 108,000 shares issued, 99,000 shares outstanding
– Paid-In Capital in Excess of Par-Common: $2,330,000
– Retained Earnings: $910,000
– Treasury Stock: 11,000 shares purchased at $33 per shareIf Tangent resold 1,300
shares of treasury stock for $23.00 per share, which of the following statements would
be true?
A) The Treasury Stock account would decrease by $21,450.
B) The Paid-In Capital in Excess of Par-Common account would increase by $1,300.
C) The Treasury Stock account would decrease by $42,900.
D) The Retained Earnings account would increase by $29,900.
The matching principle states that ________.
A) financial statements can be prepared for specific periods
B) a business’s activities can be sliced into small time segments
C) all expenses should be recorded when they are incurred during the period
D) companies should record revenue when it has been earned
Which of the following items is a measure of a company’s ability to collect receivables?
A) inventory turnover ratio
B) current ratio
C) days’ sales in receivables
D) account receivable balance
Cardoza Corp. purchased a mine on January 1, 2016, for $513,000, which is estimated
to contain 30,000 tons of iron ore. There is no residual value. The business extracted
and sold 9,500 tons of ore in 2016 and 16,800 tons of ore in 2017. What is the depletion
expense for 2017?(Round any intermediate calculations to two decimal places, and your
final answer to the nearest dollar.)
A) $162,450
B) $449,730
C) $287,280
D) $63,270
Ropers, Inc. purchases 16,000 shares of its previously issued $2 par value common
stock for $460 per share. Which of the following is the correct journal entry to record
this transaction?
A) Debit Common Stock-$2 Par Value $7,360,000, and credit Cash $7,360,000.
B) Debit Cash $7,328,000, and credit Paid-In Capital in Excess of Par-Common
$7,328,000.
C) Debit Cash $7,328,000, and credit Treasury Stock-Common $7,328,000.
D) Debit Treasury Stock-Common $7,360,000, and credit Cash $7,360,000.
For Revenues, the category of account and its normal balance is ________.
A) equity and a credit balance
B) assets and a debit balance
C) assets and a credit balance
D) equity and a debit balance
The current ratio measures ________.
A) a company’s ability to sell its long-term assets
B) a company’s ability to pay current liabilities with its total assets
C) a company’s ability to pay current liabilities with current assets
D) a company’s profitability during a particular period
The financial statements are prepared from the ________.
A) adjusted trial balance
B) chart of accounts
C) statement of retained earnings
D) unadjusted trial balance
On December 1, 2017, Parsons, Inc. sold machinery to a customer for $23,000. The
customer could not pay at the time of sale, but agreed to pay 9 months later, and signed
an 9-month note at 12% interest. How much interest revenue was earned during 2017?
(Round your answer to the nearest dollar.)
A) $260
B) $230
C) $1,840
D) $2,070