Question 1

Sales taxes collected by a retailer are reported as

Accepted Answer

A) contingent liabilities. 
B) revenues. 
C) expenses. 
D) current liabilities. 
A) contingent liabilities. 
B) revenues. 
C) expenses. 
D) current liabilities.

Question 2

Watauga County Bank agrees to lend Farm Café $500000 on January 1 2021.Farm Café signs a $500000 6% 9-month note.Use the following tabular analysis to record the proceeds and issuance of the note by Farm Cafe:

Accepted Answer

A) Increase to Interest Expense for $22500 increase to Cash for $477500 and an increase to Notes Payable for $500000. 
B) Increase to Cash and to Notes Payable for $500000. 
C) Increase to Cash for $500000 increase to Interest Expense for $22500 and an increase to Accounts Payable for $522500. 
D) Increase to Cash for $500000 increase to Interest Expense for $22500 increase to Notes Payable for $500000 and an increase to Interest Payable for $22500. 
A) Increase to Interest Expense for $22500 increase to Cash for $477500 and an increase to Notes Payable for $500000. 
B) Increase to Cash and to Notes Payable for $500000. 
C) Increase to Cash for $500000 increase to Interest Expense for $22500 and an increase to Accounts Payable for $522500. 
D) Increase to Cash for $500000 increase to Interest Expense for $22500 increase to Notes Payable for $500000 and an increase to Interest Payable for $22500.

Question 3

On October 1 Sam's Painting Service borrows $150000 from National Bank on a 3-month $150000 4% note.Sam's Painting Service's adjustment on December 31 before financial statements are prepared includes a(n)

Accepted Answer

A) Decrease to Interest Payable and a decrease to Interest Expense for $1500. 
B) Increase to Interest Expense and an increase to Interest Payable for $6000. 
C) Increase to Interest Expense and an increase to Interest Payable for $1500. 
D) Increase to Interest Expense and an increase to Notes Payable for $1500. 
A) Decrease to Interest Payable and a decrease to Interest Expense for $1500. 
B) Increase to Interest Expense and an increase to Interest Payable for $6000. 
C) Increase to Interest Expense and an increase to Interest Payable for $1500. 
D) Increase to Interest Expense and an increase to Notes Payable for $1500.

Question 4

All of the following statements about preferred stock are true except

Accepted Answer

A) preferred stock will have a paid-in capital account that is separate from other stock. 
B) preferred stock is presented first on the stockholder's equity section. 
C) preferred stock can be either par value or no-par value. 
D) there can be only one class of preferred stock. 
A) preferred stock will have a paid-in capital account that is separate from other stock. 
B) preferred stock is presented first on the stockholder's equity section. 
C) preferred stock can be either par value or no-par value. 
D) there can be only one class of preferred stock.

Question 5

When a business sells an item and collects a state sales tax on it a current liability arises.

Accepted Answer

A) True 
 B)False

Question 6

Watauga County Bank agrees to lend Farm Café $500000 on January 1 2021.Farm Café signs a $500000 6% 9-month note.Use the following tabular analysis to record the required adjustment if Farm Café prepares financial statements on June 30 2021:

Accepted Answer

A) Increase to Interest Expense and to Interest Payable for $15000. 
B) Increase to Interest Expense and a decrease to Cash for $15000. 
C) Decrease to Notes Payable Payable and to Interest Expense for $15000. 
D) Increase to Accounts Payable and to Interest Expense for $15000. 
A) Increase to Interest Expense and to Interest Payable for $15000. 
B) Increase to Interest Expense and a decrease to Cash for $15000. 
C) Decrease to Notes Payable Payable and to Interest Expense for $15000. 
D) Increase to Accounts Payable and to Interest Expense for $15000.

Question 7

Dividends in arrears are dividends on

Accepted Answer

A) cumulative preferred stock that have been declared but have not been paid. 
B) non-cumulative preferred stock that have not been declared for a given period of time. 
C) cumulative preferred stock that have not been declared for a given period of time. 
D) common dividends that have been declared but have not yet been paid. 
A) cumulative preferred stock that have been declared but have not been paid. 
B) non-cumulative preferred stock that have not been declared for a given period of time. 
C) cumulative preferred stock that have not been declared for a given period of time. 
D) common dividends that have been declared but have not yet been paid.

Question 8

A company whose current liabilities exceed its current assets may have a liquidity problem.

Accepted Answer

A) True 
 B)False

Question 9

All of the following are normally found in a corporation's stockholders' equity section except

Accepted Answer

A) dividends in arrears. 
B) common stock. 
C) paid-in capital. 
D) retained earnings. 
A) dividends in arrears. 
B) common stock. 
C) paid-in capital. 
D) retained earnings.

Question 10

A corporation purchases 30000 shares of its own $10 par common stock for $25 per share recording it at cost.What will be the effect on total stockholders' equity?

Accepted Answer

A) Increase by $300000. 
B) Decrease by $750000. 
C) Increase by $750000. 
D) Decrease by $300000. 
A) Increase by $300000. 
B) Decrease by $750000. 
C) Increase by $750000. 
D) Decrease by $300000.

Question 11

Johnson Company issued 900 shares of no-par for $17100.Which of the following would occur if the stock has no stated value?

Accepted Answer

A) Increase Cash and increase Common Stock for $17100. 
B) Increase Cash for $17100 and increase Common Stock for $ 900 and Paid-in Capital in Excess of Par for $16200. 
C) Increase Cash for $17100 and increase Common Stock for $ 900 and Paid-in Capital in Excess of Stated Value for $16200. 
D) Decrease Common Stock and decrease Cash for $17100. 
A) Increase Cash and increase Common Stock for $17100. 
B) Increase Cash for $17100 and increase Common Stock for $ 900 and Paid-in Capital in Excess of Par for $16200. 
C) Increase Cash for $17100 and increase Common Stock for $ 900 and Paid-in Capital in Excess of Stated Value for $16200. 
D) Decrease Common Stock and decrease Cash for $17100.

Question 12

Current liabilities are expected to be paid within one year or the operating cycle whichever is longer.

Accepted Answer

A) True 
 B)False

Question 13

During the month a company sells goods for a total of $106000 which includes sales taxes of $6000; therefore the company should recognize $100000 in Sales Revenue and $6000 in Sales Tax Expense.

Accepted Answer

A) True 
 B)False

Question 14

The interest charged on a $90000 note payable at the rate of 6% on a 60-day note would be

Accepted Answer

A) $5400. 
B) $2700. 
C) $1350. 
D) $900. 
A) $5400. 
B) $2700. 
C) $1350. 
D) $900.

Question 15

Morgan Company does not ring up sales taxes separately on the cash register.Total receipts for February amounted to $38160.If the sales tax rate is 6% what amount must be remitted to the state for February's sales taxes?

Accepted Answer

A) $2290 
B) $2160 
C) $2152 
D) It cannot be determined. 
A) $2290 
B) $2160 
C) $2152 
D) It cannot be determined.

Question 16

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's total stockholders' equity was

Accepted Answer

A) $76620000. 
B) $63580000. 
C) $75780000. 
D) $74940000. 
A) $76620000. 
B) $63580000. 
C) $75780000. 
D) $74940000.

Question 17

Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections: $$\begin{array} { c c c } 
&\text { Total Assets } & \text { Total Liabilities } & \text { Total Stockholders' Equity } \
\hline a.& \text { Increase } & \text { Decrease } & \text { No change } \
b.&\text { No change } & \text { Increase } & \text { Decrease } \
c.&\text { Decrease } & \text { Increase } & \text { Decrease } \
d.&\text { Decrease } & \text { No change } & \text { Increase }
\end{array}$$

Accepted Answer

The answer of Indicate the respective effects of the declaration...

Question 18

If bonds are issued at a discount it means that the

Accepted Answer

A) financial strength of the issuer is suspect. 
B) market interest rate is higher than the contractual interest rate. 
C) market interest rate is lower than the contractual interest rate. 
D) bondholder will receive effectively less interest than the contractual rate of interest. 
A) financial strength of the issuer is suspect. 
B) market interest rate is higher than the contractual interest rate. 
C) market interest rate is lower than the contractual interest rate. 
D) bondholder will receive effectively less interest than the contractual rate of interest.

Question 19

If Lantz Company issues 10000 shares of $5 par value common stock for $210000

Accepted Answer

A) Common Stock will be increased for $50000. 
B) Paid-in Capital in Excess of Par Value will be increased for $50000. 
C) Paid-in Capital in Excess of Par Value will be increased for $210000. 
D) Cash will be increased for $160000. 
A) Common Stock will be increased for $50000. 
B) Paid-in Capital in Excess of Par Value will be increased for $50000. 
C) Paid-in Capital in Excess of Par Value will be increased for $210000. 
D) Cash will be increased for $160000.

Question 20

The calculation of interest to be paid each interest period in connection with a bond payable is not influenced by any premium or discount upon issuance.

Accepted Answer

A) True 
 B)False

Sales taxes collected by a retailer are reported as

Watauga County Bank agrees to lend Farm Café $500000 on January 1 2021.Farm Café signs a $500000 6% 9-month note.Use the following tabular analysis to record the proceeds and issuance of the note by Farm Cafe:

On October 1 Sam's Painting Service borrows $150000 from National Bank on a 3-month $150000 4% note.Sam's Painting Service's adjustment on December 31 before financial statements are prepared includes a(n)

All of the following statements about preferred stock are true except

When a business sells an item and collects a state sales tax on it a current liability arises.

Watauga County Bank agrees to lend Farm Café $500000 on January 1 2021.Farm Café signs a $500000 6% 9-month note.Use the following tabular analysis to record the required adjustment if Farm Café prepares financial statements on June 30 2021:

Dividends in arrears are dividends on

A company whose current liabilities exceed its current assets may have a liquidity problem.

All of the following are normally found in a corporation's stockholders' equity section except

A corporation purchases 30000 shares of its own $10 par common stock for $25 per share recording it at cost.What will be the effect on total stockholders' equity?

Johnson Company issued 900 shares of no-par for $17100.Which of the following would occur if the stock has no stated value?

Current liabilities are expected to be paid within one year or the operating cycle whichever is longer.

During the month a company sells goods for a total of $106000 which includes sales taxes of $6000; therefore the company should recognize $100000 in Sales Revenue and $6000 in Sales Tax Expense.

The interest charged on a $90000 note payable at the rate of 6% on a 60-day note would be

Morgan Company does not ring up sales taxes separately on the cash register.Total receipts for February amounted to $38160.If the sales tax rate is 6% what amount must be remitted to the state for February's sales taxes?

Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections: Total Assets Total Liabilities Total Stockholders' Equity a. Increase Decrease No change b. No change Increase Decrease c. Decrease Increase Decrease d. Decrease No change Increase

If bonds are issued at a discount it means that the

If Lantz Company issues 10000 shares of $5 par value common stock for $210000

The calculation of interest to be paid each interest period in connection with a bond payable is not influenced by any premium or discount upon issuance.

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

Sales taxes collected by a retailer are reported as

Watauga County Bank agrees to lend Farm Café $500000 on January 1 2021.Farm Café signs a $500000 6% 9-month note.Use the following tabular analysis to record the proceeds and issuance of the note by Farm Cafe:

On October 1 Sam's Painting Service borrows $150000 from National Bank on a 3-month $150000 4% note.Sam's Painting Service's adjustment on December 31 before financial statements are prepared includes a(n)

All of the following statements about preferred stock are true except

When a business sells an item and collects a state sales tax on it a current liability arises.

Watauga County Bank agrees to lend Farm Café $500000 on January 1 2021.Farm Café signs a $500000 6% 9-month note.Use the following tabular analysis to record the required adjustment if Farm Café prepares financial statements on June 30 2021:

Dividends in arrears are dividends on

A company whose current liabilities exceed its current assets may have a liquidity problem.

All of the following are normally found in a corporation's stockholders' equity section except

A corporation purchases 30000 shares of its own $10 par common stock for $25 per share recording it at cost.What will be the effect on total stockholders' equity?

Johnson Company issued 900 shares of no-par for $17100.Which of the following would occur if the stock has no stated value?

Current liabilities are expected to be paid within one year or the operating cycle whichever is longer.

During the month a company sells goods for a total of $106000 which includes sales taxes of $6000; therefore the company should recognize $100000 in Sales Revenue and $6000 in Sales Tax Expense.

The interest charged on a $90000 note payable at the rate of 6% on a 60-day note would be

Morgan Company does not ring up sales taxes separately on the cash register.Total receipts for February amounted to $38160.If the sales tax rate is 6% what amount must be remitted to the state for February's sales taxes?

Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections: Total Assets Total Liabilities Total Stockholders' Equity a. Increase Decrease No change b. No change Increase Decrease c. Decrease Increase Decrease d. Decrease No change Increase

If bonds are issued at a discount it means that the

If Lantz Company issues 10000 shares of $5 par value common stock for $210000

The calculation of interest to be paid each interest period in connection with a bond payable is not influenced by any premium or discount upon issuance.

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