Archives: Quiz

Several transactions are listed below, with an expanded accounting equation stated to the right side of each. Use the following identification codes to indicate the effects of each transaction on the accounting equation: I = Increase; D = Decrease; NE […]

On October 1, 2013, a company borrowed $200,000 on a two-year, 12% note, with interest and principal to be paid at maturity. How much interest expense will be reported on the income statement for the year ending December 31, 2013? […]

Refer to Kalahari Limited. What is the carrying value of the bonds at the end of ten years before the final maturity payment is made? Kalahari Limited On January 2, 2013, this company issued 1,000,000, 10-year bonds for $1,150,000. The […]

The quick ratio differs from the current ratio in that it a. represents the amount of cash on hand instead of the total current assets. b. excludes inventories and accounts receivable from the numerator of the fraction because of obsolescence […]

Kauffman Tire Repair leased a machine that will enable it to repair tires found on monster vehicles. The annual payments are $9,000 and the life of the lease is 7 years. It is estimated that the useful life of the […]

A common stock provision that provides for the maintenance of stockholders’ ownership percentage upon the issuance of new stock. Match the terms to the definitions. Any transaction or set of transactions that brings together two or more previously separate entities […]

Refer to Fantasy Cruise Lines. What is the depreciation expense for the year ended December 31, 2013? Fantasy Cruise Lines On January 1, 2013, the company purchased a ship for $1,000,000. It has a 10-year useful life and a residual […]

The number of issued shares actually in the hands of stockholders rather than held as treasury stock. Match the terms to the definitions. Companies that sell to other retailers. Match the terms with the descriptions provided. a. Manufacturers d. Wholesalers […]

On January 1, 2013, Alliance Company had the following balances for accounts receivable and allowance for doubtful accounts: During 2013 the company made $3,200,000 in credit sales, collected $3,000,000 of accounts receivable and wrote off $20,000 of accounts receivable as […]

Error corrections which involve restatement of prior period income must be reported a. in a separate account within the equity section of the balance sheet. b. within “unrestricted retained earnings” on the balance sheet, with footnote disclosure to describe the […]

The result of using the effective interest method of amortization for bond discounts is that the a. interest expense for each amortization period is constant. b. effective interest rate for each amortization period is constant. c. amount of interest expense […]

Strategic risk assessment is primarily concerned with a. possible external threats to the company’s success in accomplishing its objectives. b. allocation of the company’s resources to accomplish its internal processes. c. safeguarding of the company’s computerized assets and records. d. […]

Which of the following is a measure of liquidity? a. operating cash flows ratio b. earnings per share c. accounts receivable turnover ratio d. return on common equity Which of the following statements regarding accounts payable is false? a. Accounting […]

Grand Strand Power & Light provides utilities to a gulf coast community. On November 30, 2012, the utility billed 1,500 residential customers a total of $118,500 for electricity. In addition, the company is required to collect state taxes of 1.5% […]

Balance sheet accounts are also known as which of the following? a. nominal accounts b. permanent accounts c. temporary accounts d. closing accounts Invoice price paid for resale goods. Match the costs that might be included as part of the […]

The financial statements are prepared after a. business transactions are recorded. b. adjustments are recorded. c. the accounts are closed. d. the adjusted trial balance is prepared. The Discount on Bonds Payable account is shown on the balance sheet as […]

Which of the following statements is false regarding how the cash flow effects of the changes in the equipment and accumulated depreciation accounts would be reported on a statement of cash flows if the indirect method is used to prepare […]

Represents the cash flow that a company is able to generate after considering the maintenance or expansion of its assets and the payment of dividends. Match these terms with their correct definition. a. Cash flow adequacy ratio b. Cash flows […]

In a common size balance sheet to be used in vertical analysis, the 100% amount is a. current assets. b. working capital. c. total assets. d. total stockholders’ equity. A debit memo appeared on the May bank statement. How should […]

The collection of environmental factors that influence the effectiveness of control procedures Match the following terms with their correct definitions. a. Accounting system e. Internal control system b. Business process risks f. Safeguarding c. Control activities g. Segregation of duties […]

Refer to Rio Imports. Which of the following statements is true concerning the company’s debt management activities? Rio Imports Information from the financial statements are provided below: a. The company has a smaller percentage of capital from stockholders at the […]

Current accounting standards indicate that the costs of intangible assets with an indefinite life, such as goodwill, should a. not be amortized, but should be reviewed annually for impairment. b. be reported on the statement of retained earnings in the […]

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 […]

On June 1, a board of directors declared a $3 per share cash dividend, payable on June 30 to all common stockholders of record on June 15. The company has 10,000 shares of common stock authorized, 1,000 shares issued, and […]

Cash flows related to obtaining capital for the company Match each statement to the item listed below. a. Cash flows from financing activities b. Cash flows from investing activities c. Cash flows from operating activities When using the indirect method […]

Gain on disposal of plant asset 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 […]

Which of the following statements is false regarding the use of source documents? a. Checks and deposit slips are the main source documents backing up the bank statement. b. Retailers may use cash register tapes to recognize sales transactions. c. […]

Social security and medicare taxes owed. Match each of the following current liabilities with its meaning. a. Account payable b. Note payable c. Wages payable d. Interest payable e. Sales taxes payable f. FICA taxes payable g. Unemployment taxes payable […]

On January 2, Alfredo Corporation sold merchandise with a gross price of $100,000 to a customer with terms of 2/10, n/30. How much Sales Discounts would be recorded if payment was received from the customer on January 8? Assume the […]

Goodwill 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 […]

Refer to Gainesville Truck Center. Which of the following statements is true regarding the FICA taxes that must be recorded? Gainesville Truck Center This company has a weekly payroll of $10,000 for its employees who work Monday through Friday. Federal […]

Which of the following would appear on the balance sheet as a current liability? a. A loss that could be expected upon the occurrence of a strike by employees. b. Potential damages from the risk of explosions in a fireworks […]

The accounting life of intangible assets is determined by a. their legal lives. b. their useful lives. c. their legal lives or useful lives, whichever is shorter. d. the tax life mandated by the IRS. Manatee Manufacturing sells a piece […]

Refer to Labor Finders, Inc. The company’s 2015 earnings per share is reported as Labor Finders, Inc. Selected data from the company’s financial statements are presented below: a. $1.08 b. $1.20 c. $1.30 d. $1.43 Liquidity analysis is required to […]

A list of all active accounts and each account’s debit or credit balance. Match the following terms with their correct definition. a. Account f. Debit b. Accounting cycle g. Event c. Chart of accounts h. General ledger d. Cost vs. […]

Treasure Distributors, Inc. had no investments in short-term marketable securities prior to 2012. During 2012, the company engaged in the following investment transactions: At the end of 2012, the Toledo Company stock had a market value of $18 per share. […]

Received payments from accounts receivable. Use the following codes to indicate how the cash flow effect, if any, of each transaction would be reported on a statement of cash flows if the operating activities section is prepared using the direct […]

Which one of the following items appears on a balance sheet? a. service revenue b. unearned revenue c. dividends d. cash flow from operations Which of the following is not a requirement of a company’s top managers under the Sarbanes-Oxley […]

Refer to Kalahari Limited. At the maturity date, besides an interest payment, the company would repay the bondholders Kalahari Limited On January 2, 2013, this company issued 1,000,000, 10-year bonds for $1,150,000. The bonds pay interest on June 30 and […]

Refer to Kalahari Limited. The semiannual cash payment on the bonds is Kalahari Limited On January 2, 2013, this company issued 1,000,000, 10-year bonds for $1,150,000. The bonds pay interest on June 30 and December 31. The stated rate is […]

A convertible bond is one where a. the issuer can convert from a fixed interest rate to a floating rate. b. the issuer can convert the bond from long-term to short-term. c. the issuer can retire the bond before its […]

Information that is material means that an error in recording the dollar amount of a transaction would a. likely affect the judgment of someone relying on the financial statements. b. not affect the decisions of financial statement users. c. not […]

On June 3, 2013, Alpine Corporation sold merchandise with a gross price of $45,000 with terms of 2/10, n/30. Prepare the journal entries to: A) Record the sale using the gross method. B) Assume the payment is received on June […]

Refer to Rapid Sign Corporation. What is the dividend payout ratio for 2015? Rapid Sign Corporation Selected data from the financial statements are presented below: a. 30.0% b. 30.9% c. 36.3% d. 38.2% The cost of salaries earned by employees, […]

Exists when another entity owes the security holder some combination of interest and principal 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 […]

A company had beginning accounts receivable of $175,000. All sales were on account and totaled $550,000. Cash collected from customers totaled $650,000. Calculate the ending accounts receivable balance. a. $725,000 b. $275,000 c. $ 75,000 d. $175,000 A listing of […]

Issued a twenty-year mortgage note for cash. Use the following codes to indicate how the cash flow effect, if any, of each transaction or event would be reported on a statement of cash flows if the operating activities section is […]

Which of the following is not included in Cash and Cash Equivalents on a company’s balance sheet? a. a savings account at the bank b. a checking account at the bank c. a bank certificate of deposit for one year […]

A company has cash of $800, current liabilities of $500, and long-term liabilities of $600. If the cash ratio is 2.5, then marketable securities must be a. $ 700. b. $ 800. c. $ 450. d. $2,000. Refer to Randstad, […]

Lasik Vision, Inc. began business on June 1, 2014. The corporate charter authorized issuance of 1,000 shares of no-par common stock and 4,000 shares of $6 par, 6% cumulative preferred stock. As of the beginning of 2015, 200 shares of […]