Discount on Bonds Payable is a balance sheet item for Covington Products Company.
How would it most likely be classified on the balance sheet?
a. Current liability
b. Long-term liability
c. Current asset
d. Contra-liability
The system of accounting in which there are at least two accounts affected in every
transaction so that the accounting equation stays in balance is a(an)
a. Double-entry system
b. Debit
c. Credit
d. Journalizing
The Discount on Bonds Payable account is shown on the balance sheet as
a. an asset.
b. an expense.
c. a long-term liability.
d. a contra long-term liability.
Realistic Sound’s unadjusted bank balance amounted to $3,000. Outstanding checks
amounted to $500 and deposits in transit totaled $300. Based on this information alone,
Realistic’s adjusted cash balance is:
a. $3,200
b. $3,300
c. $2,800
d. $2,700
Only one copy of the prelist should be prepared when an employee opens mail with
customer payments to avoid complexity in the accounting system and maintain control.
a. True
b. False
During 2015, the accounts receivable balance of Dickerson Corp. increased. Which of
the following statements is true?
a. This indicates that Dickerson sold more than it collected in cash during the period.
b. This increase is added to net income in the operating activities section of a statement
of cash flows prepared under the indirect method.
c. This increase is added to sales recognized on the income statement to determine the
cash collections from customers during the period.
d. This increase is considered only when the operating activities section of a statement
of cash flows is prepared under the indirect method.
Carlton Industries has identified the following items and would like you to answer a
few questions about their effect on Stockholders’ Equity. (Items are used only once.)
a. Preferred stock issued by Carlton
b. Amount received by Carlton in excess of par value when preferred stock was issued
c. Dividends in arrears on Carlton preferred stock
d. Cash dividend declared but unpaid on Carlton stock
e. Stock dividend declared but unissued by Carlton
f. Treasury stock
g. Amount received in excess of cost when treasury stock is reissued by MJ
h. Retained earnings
Which item increases Additional Paid-In Capital – Treasury Stock?
Select the account that would be increased to show each of the following costs.
a. Land
b. Land Improvements
c. Buildings
d. Machinery and Equipment
e. An Expense Account
The transportation charges related to the acquisition costs of a new piece of machinery
An asset is always involved when revenue is recognized.
a. True
b. False
Match the terms with the descriptions related to merchandise sales and purchases.
a. Transportation-in
b. Perpetual inventory system
c. Net purchases
d. FOB Destination
e. Cost of goods available for sale
f. Periodic inventory system
g. FOB Shipping point
h. Delivery expense
Requires updating of the inventory account at the time of each purchase and each sale.