Match the following bond and long-term liability related terms to the appropriate
definition.
a.Long-term liability
b.Face value
c.Debenture bonds
d.Serial bonds
e.Callable bonds
f.Face rate of interest
g.Market rate of interest
h.Bond issue price
i.Premium
j.Discount
k.Effective interest method of amortization
l.Carrying value
m.Gain or loss on redemption
The excess of the issue price over the face value of bonds. It occurs when the face rate
on the bonds exceeds the market rate.
Match the most probable matching method to the costs listed below
a.Directly match a specific revenue
b.Indirectly match with the period during which it will provide revenue
c.Immediately recognize because no future benefits are expected.
Cost of two-year insurance policy
Match the most probable matching method to the costs listed below
a.Directly match a specific revenue
b.Indirectly match with the period during which it will provide revenue
c.Immediately recognize because no future benefits are expected.
Taxes owed on income earned during the current period
For each ratio listed, select whether an increase or decrease in the ratio is generally
considered to be better.
a.increase
b.decrease
Times interest earned ratio
The set of items below was identified in preparing a bank reconciliation for Heath Corp.
as of August 31, 2014.
Bank statement balance $18,500
Heath’s book balance (before adjustments) ?
Outstanding checks 2,700
Customer’s NSF checks 350
Service Charges 100
Deposits in transit 1,000
Interest earned on checking account 60
Heath Corp.’s balance per books before the reconciliation is a. $16,410
b. $16,900
c. $17,190
d. $17,310
Utah Corp.
Use the following selected data and additional information from the records of Utah
Corp. to answer the questions that follow.
Additional information:
(1)Equipment with a cost of $15,000 and a book value of $3,000 was sold for $5,000
during 2016.
(2)Common stock was issued to retire bonds payable during 2016.
(3)The only items affecting retained earnings in 2016 were net income and dividends
declared and paid.
Review the data for Utah Corp.
REQUIRED:
(A)What amount was paid to acquire equipment during 2016?
(B)What amount was recorded as depreciation expense during 2016?
(C)What amount was declared and paid for dividends during 2016?
Which one of the following would not be found as an asset on the balance sheet of a
manufacturer?
a.Raw materials
b.Work in process
c.Finished goods
d.Merchandise inventory
Identify whether the following investor questions are associated with (a) primary or (b)
secondary financial reporting objectives.
a.primary financial reporting objective
b.secondary financial reporting objective
If I buy 50 shares of Apple, how much cash will I receive in dividends each year?
All of the following are characteristics of current liabilities except:
a.they may involve estimated amounts.
b.they are due within one year or within the operating cycle, whichever is longer.
c.they may be replaced with a new short-term liability rather than being paid in cash.
d.all three of the above are characteristic of current liabilities.
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
Cash
Choose from the following list of account titles the one that most accurately fits the
description of that account or is an example of that account. An account title may be
used more than once or not at all.
a.Cash
b.Prepaid Asset
c.Investments
d.Taxes Payable
e.Preferred Stock
f.Accounts Receivable
g.Land
h.Accounts Payable
i.Retained Earnings
j.Notes Receivable
k.Buildings
l.Notes Payable
m.Common Stock
Unearned Advertising Fees
The unit of measure in Japan is the U.S. dollar.
a.True
b.False
Sliders Company sells its merchandise only on credit. The following data is available at
December 31, 2014:
Refer to the data for Sliders Company.
The firm estimates that bad debts could be 1% of their net sales.
A)What amount will Sliders Company recognize as bad debts expense for the year?
Once this calculation is recorded, assume that the company has a balance of Accounts
B)Receivable of $58,700, and an Allowance for Doubtful Accounts of $800. What will
be the net realizable value once the adjustment from Part A) is made?
If Crab Shack Company has a current ratio of 2.5 and current assets of $195,000, the
amount of working capital is: a. $117,000
b. $330,000
c. $380,000
d. $78,000
Choose from the following list of account titles the one that most accurately fits the
description of that account or is an example of that account. An account title may be
used more than once or not at all.
a.Cash
b.Prepaid Asset
c.Investments
d.Taxes Payable
e.Preferred Stock
f.Accounts Receivable
g.Land
h.Accounts Payable
i.Retained Earnings
j.Notes Receivable
k.Buildings
l.Notes Payable
m.Common Stock
Rent paid on an office building in advance of use of the facility
Match the selected items from a classified balance sheet and multiple-step income
statement to the section in which they would appear on the classified balance sheet or
the income 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)
Bonds payable
Refer to the transactions for Krenshaw Rentals.
Based on the October 31 transaction, Krenshaw will record which of the following in its
accounting records?
a.A credit in Accounts Payable for $500.
b.A credit in Accounts Receivable for $500.
c.A debit in Accounts Payable for $500.
d.A debit in Accounts Receivable for $500.