Question 1

Information that is not generally reported for each class of stock on the balance sheet is

Accepted Answer

A) the market value. 
B) the par value. 
C) shares authorized. 
D) shares issued. 
A) the market value. 
B) the par value. 
C) shares authorized. 
D) shares issued.

Question 2

The following totals for the month of April were taken from the payroll records of Metz Company. $$\begin{array} { l r } 
\text { Salaries } & \$ 90,000 \
\text { FlCA taxes withheld } & 6,885 \
\text { Income taxes withheld } & 19,800 \
\text { Medical insurance deductions } & 3,600 \
\text { Federal unemployment taxes } & 720 \
\text { State unemployment taxes } & 4,500
\end{array}$$ The accrual of federal unemployment tax would include a(n)

Accepted Answer

A) increase to Federal Unemployment Taxes Payable for $720. 
B) decrease to Federal Unemployment Taxes Expense for $720. 
C) decrease to Payroll Tax Expense for $720. 
D) decrease to Federal Unemployment Taxes Payable for $720. 
A) increase to Federal Unemployment Taxes Payable for $720. 
B) decrease to Federal Unemployment Taxes Expense for $720. 
C) decrease to Payroll Tax Expense for $720. 
D) decrease to Federal Unemployment Taxes Payable for $720.

Question 3

Zahller Company issued 5000 bonds with a face value of $1000 each at 102 on November 1.The bonds were dated November 1.Use the following tabular analysis to record the issuance:

Accepted Answer

A) Increase to Cash and an increase to Bonds Payable for $5100000. 
B) Increase to Cash for $5000000 a decrease to Premium on Bonds Payable for $100000 and an increase to Bonds Payable for $5100000. 
C) Increase to Cash for $5100000 and an increases to Premium on Bonds Payable for $100000 and to Bonds Payable for $5000000. 
D) Increase to Cash for $5100000 an increase to Interest Expense for $100000 and an increase to Bonds Payable for $5000000. 
A) Increase to Cash and an increase to Bonds Payable for $5100000. 
B) Increase to Cash for $5000000 a decrease to Premium on Bonds Payable for $100000 and an increase to Bonds Payable for $5100000. 
C) Increase to Cash for $5100000 and an increases to Premium on Bonds Payable for $100000 and to Bonds Payable for $5000000. 
D) Increase to Cash for $5100000 an increase to Interest Expense for $100000 and an increase to Bonds Payable for $5000000.

Question 4

The carrying value of bonds is calculated by adding the balance of the Discount on Bonds Payable account to the balance in the Bonds Payable account.

Accepted Answer

A) True 
 B)False

Question 5

Nance Corporation's December 31 2021 balance sheet showed the following: 6% preferred stock $20 par value cumulative $\begin{array} { l  } 
 \text {30,000 shares authorized; 20,000 shares issued  }&\$400,000\
 \text {Common stock, $ \$ 10 $ par value, $ 3,000,000 $ shares authorized; }&\
 \text { $ 1,950,000 $ shares issued, $ 1,920,000 $ shares outstanding  }&19,500,000\
 \text { Paid-in capital in excess of par value - preferred stock }&60,000\
 \text {Paid-in capital in excess of par value - common stock  }&28,000,000\
 \text {Retained earnings }&9,650,000\
 \text {Treasury stock (30,000 ) shares }&630,000\
\end{array}$
 Nance's total paid-in capital was

Accepted Answer

A) $47960000. 
B) $48590000. 
C) $47330000. 
D) $28060000. 
A) $47960000. 
B) $48590000. 
C) $47330000. 
D) $28060000.

Question 6

Failure to record a liability will probably

Accepted Answer

A) result in an overstated net income. 
B) result in overstated total liabilities and owner's equity. 
C) have no effect on net income. 
D) result in understated total assets. 
A) result in an overstated net income. 
B) result in overstated total liabilities and owner's equity. 
C) have no effect on net income. 
D) result in understated total assets.

Question 7

Sizemore Inc.has 10000 shares of 4% $100 par value cumulative preferred stock and 100000 shares of $1 par value common stock outstanding at December 31 2021.If the board of directors declares a $25000 dividend the

Accepted Answer

A) preferred stockholders will receive 1/10th of what the common stockholders will receive. 
B) preferred stockholders will receive the entire $25000. 
C) $25000 will be held as restricted retained earnings and paid out at some future date. 
D) preferred stockholders will receive $12500 and the common stockholders will receive $12500. 
A) preferred stockholders will receive 1/10th of what the common stockholders will receive. 
B) preferred stockholders will receive the entire $25000. 
C) $25000 will be held as restricted retained earnings and paid out at some future date. 
D) preferred stockholders will receive $12500 and the common stockholders will receive $12500.

Question 8

The following totals for the month of April were taken from the payroll records of Metz Company. $$\begin{array} { l r } 
\text { Salaries } & \$ 90,000 \
\text { FlCA taxes withheld } & 6,885 \
\text { Income taxes withheld } & 19,800 \
\text { Medical insurance deductions } & 3,600 \
\text { Federal unemployment taxes } & 720 \
\text { State unemployment taxes } & 4,500
\end{array}$$ Recording the payment of net payroll would include a(n)

Accepted Answer

A) decrease to Salaries and Wages Payable for $54495. 
B) decrease to Salaries and Wages Payable for $59715. 
C) decrease to Salaries and Wages Payable for $55215. 
D) decrease to Cash for $55215. 
A) decrease to Salaries and Wages Payable for $54495. 
B) decrease to Salaries and Wages Payable for $59715. 
C) decrease to Salaries and Wages Payable for $55215. 
D) decrease to Cash for $55215.

Question 9

Cash dividends are not a liability of the corporation until they are declared by the board of directors.

Accepted Answer

A) True 
 B)False

Question 10

If bonds are issued at a discount the issuing corporation will pay a principal amount less than the face amount of the bonds on the maturity date.

Accepted Answer

A) True 
 B)False

Question 11

Logan Corporation issues 70000 shares of $50 par value preferred stock for cash at $60 per share.Recording the transaction will consist of an increase to Cash for $4200000 and an increase(s) to

Accepted Answer

A) Preferred Stock for $4200000. 
B) Preferred Stock for $3500000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $700000. 
C) Preferred Stock for $3500000 and Retained Earnings for $700000. 
D) Paid-in Capital from Preferred Stock for $4200000. 
A) Preferred Stock for $4200000. 
B) Preferred Stock for $3500000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $700000. 
C) Preferred Stock for $3500000 and Retained Earnings for $700000. 
D) Paid-in Capital from Preferred Stock for $4200000.

Question 12

Racer Corporation's December 31 2021 balance sheet showed the following: 6% preferred stock $20 par value cumulative $\begin{array} { l  } 
 \text {40,000 shares authorized; 25,000 shares issued }&\$500,000\
\text { Common stock, $ \$ 10 $ par value, $ 4,000,000 $ shares authorized; }&\
\text {  $ 2,600,000 $ shares issued, $ 2,560,000 $ shares outstanding}&26,000,000\
\text {Paid-in capital in excess of par value - preferred stock  }&80,000\
\text {Paid-in capital in excess of par value - common stock  }&37,000,000\
\text { Retained earnings}&12,200,000\
\text { Treasury stock (40,000  shares)}&840,000\
\end{array}$
 Racer declared and paid a $100000 cash dividend on December 15 2021.If the company's dividends in arrears prior to that date were $30000 Racer's common stockholders received

Accepted Answer

A) $70000. 
B) $60000. 
C) $40000. 
D) no dividend. 
A) $70000. 
B) $60000. 
C) $40000. 
D) no dividend.

Question 13

Logan Corporation issues 40000 shares of $50 par value preferred stock for cash at $60 per share.In the stockholders' equity section the effects of the transaction above will be reported

Accepted Answer

A) entirely within the capital stock section. 
B) entirely within the additional paid-in capital section. 
C) under both the capital stock and additional paid-in capital sections. 
D) entirely under the retained earnings section. 
A) entirely within the capital stock section. 
B) entirely within the additional paid-in capital section. 
C) under both the capital stock and additional paid-in capital sections. 
D) entirely under the retained earnings section.

Question 14

In the balance sheet the account Discount on Bonds Payable is

Accepted Answer

A) added to bonds payable. 
B) deducted from bonds payable. 
C) classified as a stockholders' equity account. 
D) classified as a revenue account. 
A) added to bonds payable. 
B) deducted from bonds payable. 
C) classified as a stockholders' equity account. 
D) classified as a revenue account.

Question 15

The following totals for the month of April were taken from the payroll records of Metz Company. $$\begin{array} { l r } 
\text { Salaries } & \$ 90,000 \
\text { FlCA taxes withheld } & 6,885 \
\text { Income taxes withheld } & 19,800 \
\text { Medical insurance deductions } & 3,600 \
\text { Federal unemployment taxes } & 720 \
\text { State unemployment taxes } & 4,500
\end{array}$$ The accrual of employer's payroll taxes would include a(n)

Accepted Answer

A) increase to Payroll Tax Expense for $12105. 
B) decrease to Payroll Tax Expense for $12105. 
C) increase to FICA Taxes Payable for $5220. 
D) decrease to Payroll Tax Expense for $5220. 
A) increase to Payroll Tax Expense for $12105. 
B) decrease to Payroll Tax Expense for $12105. 
C) increase to FICA Taxes Payable for $5220. 
D) decrease to Payroll Tax Expense for $5220.

Question 16

Dawson Company issued 800 shares of no-par common stock for $7200.Which of the following would occur if the stock has stated value of $2 per share?

Accepted Answer

A) Increase Cash and increase Common Stock for $7200. 
B) Increase Cash for $7200 and increase Common Stock $1600 and Paid-in Capital in Excess of Par $5600. 
C) Increase Cash for $7200 and increase Common Stock for $ 1600 and Paid-in Capital in Excess of Stated Value for $5600. 
D) Decrease Common Stock and decrease Cash for $7200. 
A) Increase Cash and increase Common Stock for $7200. 
B) Increase Cash for $7200 and increase Common Stock $1600 and Paid-in Capital in Excess of Par $5600. 
C) Increase Cash for $7200 and increase Common Stock for $ 1600 and Paid-in Capital in Excess of Stated Value for $5600. 
D) Decrease Common Stock and decrease Cash for $7200.

Question 17

If $180000 6% bonds are issued on January 1 and pay interest annually the amount of interest paid will be $10800.

Accepted Answer

A) True 
 B)False

Question 18

Dividends in arrears on cumulative preferred stock

Accepted Answer

A) never have to be paid even if common dividends are paid. 
B) must be paid before common stockholders can receive a dividend. 
C) should be recorded as a current liability until they are paid. 
D) enable the preferred stockholders to share equally in corporate earnings with the common stockholders. 
A) never have to be paid even if common dividends are paid. 
B) must be paid before common stockholders can receive a dividend. 
C) should be recorded as a current liability until they are paid. 
D) enable the preferred stockholders to share equally in corporate earnings with the common stockholders.

Question 19

The recording of the purchase of treasury stock will cause total stockholders' equity to decrease by the amount of the cost of the treasury stock.

Accepted Answer

A) True 
 B)False

Question 20

In the balance sheet the account Premium on Bonds Payable is

Accepted Answer

A) added to bonds payable. 
B) deducted from bonds payable. 
C) classified as a stockholders' equity account. 
D) classified as a revenue account. 
A) added to bonds payable. 
B) deducted from bonds payable. 
C) classified as a stockholders' equity account. 
D) classified as a revenue account.

Information that is not generally reported for each class of stock on the balance sheet is

Zahller Company issued 5000 bonds with a face value of $1000 each at 102 on November 1.The bonds were dated November 1.Use the following tabular analysis to record the issuance:

The carrying value of bonds is calculated by adding the balance of the Discount on Bonds Payable account to the balance in the Bonds Payable account.

Failure to record a liability will probably

Sizemore Inc.has 10000 shares of 4% $100 par value cumulative preferred stock and 100000 shares of $1 par value common stock outstanding at December 31 2021.If the board of directors declares a $25000 dividend the

Cash dividends are not a liability of the corporation until they are declared by the board of directors.

If bonds are issued at a discount the issuing corporation will pay a principal amount less than the face amount of the bonds on the maturity date.

Logan Corporation issues 70000 shares of $50 par value preferred stock for cash at $60 per share.Recording the transaction will consist of an increase to Cash for $4200000 and an increase(s) to

Logan Corporation issues 40000 shares of $50 par value preferred stock for cash at $60 per share.In the stockholders' equity section the effects of the transaction above will be reported

In the balance sheet the account Discount on Bonds Payable is

Dawson Company issued 800 shares of no-par common stock for $7200.Which of the following would occur if the stock has stated value of $2 per share?

If $180000 6% bonds are issued on January 1 and pay interest annually the amount of interest paid will be $10800.

Dividends in arrears on cumulative preferred stock

The recording of the purchase of treasury stock will cause total stockholders' equity to decrease by the amount of the cost of the treasury stock.

In the balance sheet the account Premium on Bonds Payable is

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters

Exam 8: Financial Analysis: the Big Picture

Information that is not generally reported for each class of stock on the balance sheet is

Zahller Company issued 5000 bonds with a face value of $1000 each at 102 on November 1.The bonds were dated November 1.Use the following tabular analysis to record the issuance:

The carrying value of bonds is calculated by adding the balance of the Discount on Bonds Payable account to the balance in the Bonds Payable account.

Failure to record a liability will probably

Sizemore Inc.has 10000 shares of 4% $100 par value cumulative preferred stock and 100000 shares of $1 par value common stock outstanding at December 31 2021.If the board of directors declares a $25000 dividend the

Cash dividends are not a liability of the corporation until they are declared by the board of directors.

If bonds are issued at a discount the issuing corporation will pay a principal amount less than the face amount of the bonds on the maturity date.

Logan Corporation issues 70000 shares of $50 par value preferred stock for cash at $60 per share.Recording the transaction will consist of an increase to Cash for $4200000 and an increase(s) to

Logan Corporation issues 40000 shares of $50 par value preferred stock for cash at $60 per share.In the stockholders' equity section the effects of the transaction above will be reported

In the balance sheet the account Discount on Bonds Payable is

Dawson Company issued 800 shares of no-par common stock for $7200.Which of the following would occur if the stock has stated value of $2 per share?

If $180000 6% bonds are issued on January 1 and pay interest annually the amount of interest paid will be $10800.

Dividends in arrears on cumulative preferred stock

The recording of the purchase of treasury stock will cause total stockholders' equity to decrease by the amount of the cost of the treasury stock.

In the balance sheet the account Premium on Bonds Payable is

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters