The main reason companies retire bonds prior to their maturity date is to relieve the
pressure of paying interest payments.
Electronic funds transfer is a system that transfers cash by using paper documents.
A creditor is any person who has an ownership interest in a business.
A debtor is a party to a credit transaction who will receive the cash for the transaction at
a later date.
Issuing preferred stock to stockholders in exchange for cash is shown under the
financing activities section of the statement of cash flows.
A corporation’s income statement includes some unique items that do not often apply to
smaller businesses.
The rate of return on common stockholders’ equity shows how much income is earned
for each $1 of total stockholders’ equity.
Having a cash ratio below 1 is a good thing.
The payee is the issuer of a check.
As proof of the deposit transaction, a customer receives a cancelled check from the
bank.
As per the economic entity assumption, an organization and its owners should be seen
as the same entity.
The trial balance is one of the three basic financial statements that are issued to external
users of the business.
A chart of accounts provides more detail than a ledger.
On December 31, 2017, Clark Sales has 10-year Bonds Payable of $89,000 and
Discount on Bonds Payable of $2,350. How will this be shown on the December 31,
2016 Balance Sheet?
A) Bonds Payable $89,000 less Discount on Bonds Payable $2,350 for a carrying
amount of $86,650
B) Bonds Payable $89,000 plus Discount on Bonds Payable for a carrying amount of
$91,350
C) Bonds Payable $89,000
D) Bonds Payable $89,000 less one-tenth of $2,350 for a carrying amount of $88,765
Which one of the following account groups will decrease with a debit?
A) assets and expenses
B) revenues and expenses
C) liabilities and revenues
D) assets and liabilities
Which of the following inventory costing methods uses the costs of the oldest purchases
to calculate the value of the ending inventory?
A) specific identification
B) weighted-average
C) last-in, first-out
D) first-in, first-out
The assets of Moon Company are $160,000 and the total liabilities are $60,000. The
equity is ________.
A) $160,000
B) $220,000
C) $60,000
D) $100,000
During 2017, Sanchez Corp. had net sales of $16,400,000. The beginning total assets
were $8,900,000. The asset turnover ratio was 1.7 times. Calculate the ending total
assets of Sanchez.
A) $10,394,118
B) $8,900,000
C) $15,652,941
D) $6,752,941
Empire Moving Company reported the following amounts on its balance sheet as of
December 31, 2016 and December 31, 2017:
For the vertical analysis, what is the percentage of total liabilities for December 31,
2016? (Round your answer to two decimal places.)
A) 100.00%
B) 43.07%
C) 19.10%
D) 42.18%
All of the accounts and the account balances of a company appear on the ________.
A) statement of retained earnings
B) balance sheet
C) adjusted trial balance
D) income statement
Jupiter, Inc. signed a one-year $44,000 note payable at 8% interest on May 1, 2016. If
Jupiter, Inc. only adjusts its accounts once a year at year-end, how much interest
expense was accrued on December 31, 2016?
A) $1,173
B) $3,520
C) $2,347
D) $2,933
Which of the following is shown on the balance sheet as well as the statement of cash
flows?
A) Stockholders’ equity (ending balance)
B) Net income
C) Total assets (ending balance)
D) Cash (ending balance)
Roberts Construction Group paid $6,000 for a plant asset that had a market value of
$10,500. At which of the following amounts should the plant asset be recorded?
A) $10,500
B) $3,000
C) $6,000
D) $12,000