Archives: Quiz
978-0134486833 Test Bank Chapter 14 Part 1
Horngren’s Financial and Managerial Accounting, 6e (Miller-Nobles) Chapter 14 The Statement of Cash Flows Learning Objective 14-1 1) The balance sheet shows why cash increased or decreased. Answer: FALSE Explanation: The balance sheet does not show why cash increased or […]
978-0134486833 Test Bank Chapter 13 Part 10
7) Scotland Corporation had net income for 2018 of $80,000. Scotland had 13,000 shares of common stock outstanding at the beginning of the year and 24,000 shares of common stock outstanding at the end of the year. There were 12,000 […]
978-0134486833 Test Bank Chapter 13 Part 9
24) Which of the following statements regarding earnings per share (EPS) is incorrect? A) EPS for income from continuing operations must be reported on the face of the income statement. B) EPS is the most widely used of all business […]
978-0134486833 Test Bank Chapter 13 Part 8
82) On July 31, 2018, Baldwin, Inc. reported the following information in the equity section of their balance sheet: Stockholders’ Equity: Common Stock, $1.00 par, 500,000 shares authorized, 20,000 shares issued and outstanding $20,000 Paid-In Capital in Excess of Par—Common […]
978-0134486833 Test Bank Chapter 13 Part 7
58) Risingstar Corporation currently has 129,000 shares outstanding of $3 par value common stock. The stock was originally issued for $14 per share. On March 15, the board of directors declares a 13% stock dividend when the stock is selling […]
978-0134486833 Test Bank Chapter 13 Part 6
33) From its inception through the year of 2017, First Mart, Inc. was profitable and made strong dividend payments each year. In the year 2018, First Mart had major losses and paid no dividends. In 2019, the company started making […]
978-0134486833 Test Bank Chapter 13 Part 5
30) Corporations may not retire preferred stock in order to avoid paying the preferred dividends. Answer: FALSE Diff: 1 LO: 13-3 AACSB: Application of knowledge AICPA Functional: Measurement PE Question Type: Concept H2: Retirement of Stock 31) If a company […]
978-0134486833 Test Bank Chapter 13 Part 4
3) A company may purchase treasury stock to increase net assets by buying high and selling low. Answer: FALSE Explanation: A company may purchase treasury stock to increase net assets by buying low and selling high. Diff: 1 LO: 13-3 […]
978-0134486833 Test Bank Chapter 13 Part 3
23) All City Realty, Inc. issued 7000 shares of $9 stated value common stock for $16 per share. The journal entry to record this transaction includes a credit to ________. A) Common Stock for $112,000 B) Paid-In Capital in Excess […]
978-0134486833 Test Bank Chapter 13 Part 2
34) The retained earnings of a corporation is ________. A) internally generated equity that is earned by profitable operations that is not distributed to stockholders B) externally generated equity that is contributed by shareholders C) externally generated equity that is […]
978-0134486833 Test Bank Chapter 13 Part 1
Horngren’s Financial and Managerial Accounting, 6e (Miller-Nobles) Chapter 13 Stockholders’ Equity Learning Objective 13-1 1) A corporation is a business organized under federal law that is a separate legal entity. Answer: FALSE Explanation: A corporation is a business organized under […]
978-0134486833 Test Bank Chapter 12 Part 8
16) When computing the present value of a bond, which interest rate is used? Why? Answer: The market rate of interest is used because interest expense is based on the market rate of interest at the time the bonds were […]
978-0134486833 Test Bank Chapter 12 Part 7
61 6) Alden Corp. has the following balances as of December 31, 2019: Total Assets $110,000 Total Liabilities 67,000 Total Equity 43,000 Calculate the debt to equity ratio. (Round your answer to two decimal points.) A) 0.64 B) 0.92 C) […]
978-0134486833 Test Bank Chapter 12 Part 6
2) When bonds are retired at maturity, assuming the last interest payment has already been recorded, the journal entry includes a debit to the Bonds Payable account and a credit to the Cash account. Answer: TRUE Diff: 1 LO: 12-4 […]
978-0134486833 Test Bank Chapter 12 Part 5
23) Crystal Glassware Company issues $1,042,000 of its 14%, 10-year bonds at 97 on February 28, 2019. The bonds pay interest on February 28 and August 31. Assume that Crystal uses the straight-line method for amortization. What net amount will […]
978-0134486833 Test Bank Chapter 12 Part 4
54) List three disadvantages of borrowing. Answer: 1. Debts must be paid during unprofitable years as well as profitable years. 2. Unlike cash dividends, which are optional payments to stockholders, the interest payments on bonds payable are required. 3. Without […]
978-0134486833 Test Bank Chapter 12 Part 3
20) If bonds with a face value of $209,000 are issued at 93, the amount of cash proceeds is ________. A) $208,907 B) $209,000 C) $194,370 D) $179,740 Answer: C Explanation: C) Cash proceeds ($209,000 × 0.93) = $194,370 Diff: […]
978-0134486833 Test Bank Chapter 12 Part 2
30) On January 1, 2018, Benbrook Company purchased equipment and signed a six-year mortgage note for $160,000 at 15%. The note will be paid in equal annual installments of $42,278, beginning January 1, 2019. Calculate the balance of Mortgage Payable […]
978-0134486833 Test Bank Chapter 12 Part 1
Horngren’s Financial and Managerial Accounting, 6e (Miller-Nobles) Chapter 12 Long-Term Liabilities Learning Objective 12-1 1) The current portion of notes payable is the principal amount that will be paid within two years of the balance sheet date, and the remaining […]
978-0134486833 Test Bank Chapter 11 Part 8
16) If the likelihood of a future event is reasonably possible, how should the company report the contingency? Answer: Describe the situation in a note to the financial statements. Diff: 1 LO: 11-4 AACSB: Application of knowledge AICPA Functional: Measurement […]
978-0134486833 Test Bank Chapter 11 Part 7
36) Fast Bikes, Inc. offers warranties on all their bikes. They estimate warranty expense at 3.5% of sales. At the beginning of 2018, the Estimated Warranty Payable account had a credit balance of $1900. During the year, Fast Bikes had […]
978-0134486833 Test Bank Chapter 11 Part 6
14) Which of the following accounts is debited when employees take their paid vacations? A) Vacation Benefits Expense B) Vacation Benefits Payable C) Salaries Expense D) No entry is needed. Answer: B Diff: 1 LO: 11-3 AACSB: Application of knowledge […]
978-0134486833 Test Bank Chapter 11 Part 5
70) Tan’s gross pay for the week is $1500. His year-to-date pay is under the limit for OASDI. Assume that the rate for state and federal unemployment compensation taxes is 6% and that Tan’s year–to-date pay has previously exceeded the […]
978-0134486833 Test Bank Chapter 11 Part 4
36) When using a payroll register, Salaries and Wages Expense equals the current period earnings of employees. Answer: TRUE Diff: 1 LO: 11-2 AACSB: Application of knowledge AICPA Functional: Measurement PE Question Type: Concept H2: Payroll Register 37) The current […]
978-0134486833 Test Bank Chapter 11 Part 3
9) There are numerous ways to label an employee’s pay. Complete the table to show how each type of employee pay is generally labeled. Employee pay Generally labeled as Salary Wages Commission Bonus Benefits Answer: Employee pay Generally labeled as […]
978-0134486833 Test Bank Chapter 11 Part 2
35) When borrowing cash from a bank, the business is required to sign a promissory note stating that the business will pay the principal plus interest at a specified maturity date. Answer: TRUE Diff: 1 LO: 11-1 AACSB: Application of […]
978-0134486833 Test Bank Chapter 11 Part 1
Horngren’s Financial and Managerial Accounting, 6e (Miller-Nobles) Chapter 11 Current Liabilities and Payroll Learning Objective 11-1 1) Current liabilities must be paid either in cash or with goods and services within one year or within the entity’s operating cycle, if […]
978-0134486833 Test Bank Chapter 10 Part 7
32) Which of the following is true of comprehensive income? A) All items included in comprehensive income enter into the determination of net income. B) Dividend payments are not included in the determination of comprehensive income, even though it results […]
978-0134486833 Test Bank Chapter 10 Part 6
2) The fair value of a trading debt security is the price that would be used if the company were to sell the investment on the market. Answer: TRUE Diff: 1 LO: 10-4 AACSB: Application of knowledge AICPA Functional: Measurement […]
978-0134486833 Test Bank Chapter 10 Part 5
30) Orbit Services, Inc. pays $700,000 to acquire 30% (200,000 shares) of the voting stock of State Investments, Inc. on January 5, 2019. State Investments, Inc. declares and pays a cash dividend of $1.40 per share on June 14, 2019. […]
978-0134486833 Test Bank Chapter 10 Part 4
7) Gardens, Inc. invests its excess cash in Innovative Technologies, Inc. and acquires 4300 shares for $28.00 per share. Garden, Inc. owns less than 3% of Innovative’s voting stock and plans to hold the stock for two years. Which of […]
978-0134486833 Test Bank Chapter 10 Part 3
3) Amex Corporation invests excess cash to purchase $25,000 in corporate bonds on March 30, 2018. In addition to the $25,000, Amex also paid a brokerage fee of $1,000. Amex intends to hold the bonds until maturity and has the […]
978-0134486833 Test Bank Chapter 10 Part 2
38) Held-to-maturity debt investments are categorized as long-term assets on the balance sheet, regardless of the maturity date. Answer: FALSE Explanation: Held–to-maturity debt investments are categorized as current or long-term assets on the balance sheet, depending on the maturity date. […]
978-0134486833 Test Bank Chapter 10 Part 1
Horngren’s Financial and Managerial Accounting, 6e (Miller-Nobles) Chapter 10 Investments Learning Objective 10-1 1) A company’s investments in stock or bonds cannot include the acquisition of an entire company. Answer: FALSE Diff: 1 LO: 10-1 AACSB: Application of knowledge AICPA […]
978-0134486833 Test Bank Chapter 1 Part 10
10) Which of the following financial statements is used to report the economic resources, debt, and overall financial position of a company? A) income statement B) balance sheet C) statement of cash flows D) statement of retained earnings Answer: B […]
978-0134486833 Test Bank Chapter 1 Part 9
38) Wylie Company has just completed operations for the year ended December 31, 2018. This is the second year of operations for the company. The following data have been assembled for the business. Accounts Payable $12,200 Office Expense $6,500 Accounts […]
978-0134486833 Test Bank Chapter 1 Part 8
14) Michael Company has just completed operations for the year ended December 31, 2018. This is the second year of operations for the company. The following data have been assembled for the business. Accounts Payable $12,200 Office Expense $6,500 Accounts […]
978-0134486833 Test Bank Chapter 1 Part 7
61 46) List the steps, in the correct order, that are used when analyzing transactions. Answer: Step 1: Identify the accounts and the account type. Step 2: Decide if each account increases or decreases. Step 3: Determine if the accounting […]
978-0134486833 Test Bank Chapter 1 Part 6
21) Jason Repair Corporation incurred $1,500 as advertising expense and promised to pay the advertising agency within 30 days. Which of the following will decrease as a result of this transaction? A) Assets B) Stockholders’ equity C) Liabilities D) Revenues […]
978-0134486833 Test Bank Chapter 1 Part 5
30) Maxwell Plumbing Services earned $500 by completing a job for Smith Company. The $500 earned by Maxwell Plumbing Services is its ________. A) revenue B) equity C) gain D) debt Answer: A Diff: 1 LO: 1-3 AACSB: Application of […]
978-0134486833 Test Bank Chapter 1 Part 4
70) International Financial Reporting Standards ________ U.S. Generally Accepted Accounting Principles. A) are the same as B) are generally less specific than C) are based less on principle than D) leave less room for professional judgment than Answer: B Diff: […]
978-0134486833 Test Bank Chapter 1 Part 3
42) For each of the following characteristics of a business organization, state whether it applies to a sole proprietorship (SP), partnership (P) or a corporation (C). There may be more than one correct answer for a characteristic. Business organization characteristic […]
978-0134486833 Test Bank Chapter 1 Part 2
5) List three private groups that work with the Financial Accounting Standards Board (FASB). Answer: Private groups that work with FASB are the American Institute of CPAs (AICPA), Institute of Management Accountants (IMA), and International Accounting Standards Board (IASB). Diff: […]
978-0134486833 Test Bank Chapter 1 Part 1
Horngren’s Financial and Managerial Accounting, 6e (Miller-Nobles) Chapter 1 Accounting and the Business Environment 1.1 Learning Objective 1-1 1) Accounting is the information system that measures business activities, processes the information into reports, and communicates the results to decision makers. […]
978-0134486833 Test Bank Appendix B Part 6
5) The ________ is a set of programs or instructions that drive the computer to perform the work desired. A) network B) hardware C) software D) router Answer: C Diff: 1 LO: APP. B-4 AACSB: Information technology AICPA Functional: Leverage […]
978-0134486833 Test Bank Appendix B Part 5
29) Cash disbursement journals also are known as ________. A) sales journals B) purchases journals C) cash receipts journals D) cash payments journals Answer: D Diff: 1 LO: APP. B-3 AACSB: Application of knowledge AICPA Functional: Measurement PE Question Type: […]
978-0134486833 Test Bank Appendix B Part 4
49) Bronze Corporation had the following transactions: Jun. 6 Sold merchandise inventory for cash, $2,200. Cost of goods, $1,400. 9 Collected interest revenue of $2,350. 15 Received cash from Jim Rhodes, $1,100, on account. There was no discount. 27 Received […]
978-0134486833 Test Bank Appendix B Part 3
21) A company has four vendors and the accounts payable subsidiary ledger shows the following balances. Alpha $278,821 Beta 157,474 Gamma 83,943 Delta 44,187 Calculate the accounts payable balance in the general ledger. A) $436,295 B) $564,425 C) $278,821 D) […]
978-0134486833 Test Bank Appendix B Part 2
11 Copyright © 2018 Pearson Education, Inc. 33) In an accounting information system, source documents are the documents which ________. A) are not needed if a computerized system is used B) detail the strategic planning of the business C) have […]
978-0134486833 Test Bank Appendix B Part 1
Horngren’s Financial and Managerial Accounting, 6e (Miller-Nobles) Appendix B: Accounting Information Systems Learning Objective APP. B-1 1) An accounting information system collects, records, stores, and processes accounting data to produce information that is useful for decision makers. Answer: TRUE Diff: […]