Question 1

Two classifications appearing in the paid-in capital section of the balance sheet are

Accepted Answer

A) preferred stock and common stock. 
B) paid-in capital and retained earnings. 
C) capital stock and additional paid-in capital. 
D) capital stock and treasury stock. 
A) preferred stock and common stock. 
B) paid-in capital and retained earnings. 
C) capital stock and additional paid-in capital. 
D) capital stock and treasury stock.

Question 2

On October 1 Forsythe Corporation issues 900 10-year 8% $1000 bonds dated October 1 2021 at 96.Use the following tabular analysis to record the issuance:

Accepted Answer

A) Increase to Cash and increase to Notes Payable $900000. 
B) Increase to Cash for $864000 increase to Bonds Payable for $900000 and decrease to Discount on Bonds Payable for $36000. 
C) Increase to Cash and increase to Bonds Payable for $864000. 
D) Increase to Cash for $864000 increase Bonds Payable $900000 and increase Discount on Bonds Payable $36000. 
A) Increase to Cash and increase to Notes Payable $900000. 
B) Increase to Cash for $864000 increase to Bonds Payable for $900000 and decrease to Discount on Bonds Payable for $36000. 
C) Increase to Cash and increase to Bonds Payable for $864000. 
D) Increase to Cash for $864000 increase Bonds Payable $900000 and increase Discount on Bonds Payable $36000.

Question 3

A note payable must always be paid before an account payable.

Accepted Answer

A) True 
 B)False

Question 4

The contractual interest rate on a bond is often referred to as the

Accepted Answer

A) callable rate. 
B) the maturity rate. 
C) market rate. 
D) stated rate. 
A) callable rate. 
B) the maturity rate. 
C) market rate. 
D) stated rate.

Question 5

The net effects on the corporation of the declaration and payment of a cash dividend are to

Accepted Answer

A) decrease liabilities and decrease stockholders' equity. 
B) increase stockholders' equity and decrease liabilities. 
C) decrease assets and decrease stockholders' equity. 
D) increase assets and increase stockholders' equity. 
A) decrease liabilities and decrease stockholders' equity. 
B) increase stockholders' equity and decrease liabilities. 
C) decrease assets and decrease stockholders' equity. 
D) increase assets and increase stockholders' equity.

Question 6

Kaplan Manufacturing Corporation purchased 2500 shares of its own previously issued $10 par common stock for $62500.As a result of this event

Accepted Answer

A) Kaplan's Common Stock account decreased $25000. 
B) Kaplan's total stockholders' equity decreased $62500. 
C) Kaplan's Paid-in Capital in Excess of Par Value account decreased $37500. 
D) All of these answer choices are correct. 
A) Kaplan's Common Stock account decreased $25000. 
B) Kaplan's total stockholders' equity decreased $62500. 
C) Kaplan's Paid-in Capital in Excess of Par Value account decreased $37500. 
D) All of these answer choices are correct.

Question 7

The return on common stockholders' equity is computed by dividing net income

Accepted Answer

A) by ending common stockholders' equity. 
B) by average common stockholders' equity. 
C) less preferred dividends by ending common stockholders' equity. 
D) less preferred dividends by average common stockholders' equity. 
A) by ending common stockholders' equity. 
B) by average common stockholders' equity. 
C) less preferred dividends by ending common stockholders' equity. 
D) less preferred dividends by average common stockholders' equity.

Question 8

Molina Corporation issues 5000 10-year 8% $1000 bonds dated January 1 2021 at 103.Recording the issuance will show a(n)

Accepted Answer

A) increase to Cash of $5000000. 
B) decrease to Premium on Bonds Payable for $150000. 
C) increase to Bonds Payable for $5000000. 
D) decrease to Cash for $5150000. 
A) increase to Cash of $5000000. 
B) decrease to Premium on Bonds Payable for $150000. 
C) increase to Bonds Payable for $5000000. 
D) decrease to Cash for $5150000.

Question 9

Herman Corporation had net income of $100000 and paid dividends of $25000 to common stockholders and $20000 to preferred stockholders in 2021.Herman Corporation's common stockholders' equity at the beginning and end of 2021 was $450000 and $550000 respectively.Herman Corporation's return on common stockholders' equity is

Accepted Answer

A) 20.0%. 
B) 16.0%. 
C) 15.0%. 
D) 11.0%. 
A) 20.0%. 
B) 16.0%. 
C) 15.0%. 
D) 11.0%.

Question 10

Don's Pharmacy has collected $900 in sales taxes during March.If sales taxes must be remitted to the state government monthly recording this information includes a(n)

Accepted Answer

A) Increase to Sales Tax Expense and a decrease to Cash for $900. 
B) Decrease to Sales Taxes Payable and to Cash for $900. 
C) Increase to Sales Tax Expense and to Sales Taxes Payable for $ 900. 
D) No recording required. 
A) Increase to Sales Tax Expense and a decrease to Cash for $900. 
B) Decrease to Sales Taxes Payable and to Cash for $900. 
C) Increase to Sales Tax Expense and to Sales Taxes Payable for $ 900. 
D) No recording required.

Question 11

Treasury stock is a contra stockholders' equity account.

Accepted Answer

A) True 
 B)False

Question 12

The following totals for the month of April were taken from the payroll records of Noll Company. $$\begin{array} { l r } 
\text { Salaries } & \$ 120,000 \
\text { FlCA taxes withheld } & 9,180 \
\text { Income taxes withheld } & 25,000 \
\text { Medical insurance deductions } & 4,500 \
\text { Federal unemployment taxes } & 320 \
\text { State unemployment taxes } & 2,160
\end{array}$$ The accrual of employer's payroll taxes would include a(n)

Accepted Answer

A) increase to Payroll Tax Expense for $2480. 
B) increase to Payroll Tax Expense for $11660. 
C) increase to FICA Taxes Payable for $18360. 
D) decrease to Payroll Tax Expense for $2480. 
A) increase to Payroll Tax Expense for $2480. 
B) increase to Payroll Tax Expense for $11660. 
C) increase to FICA Taxes Payable for $18360. 
D) decrease to Payroll Tax Expense for $2480.

Question 13

Holden Packaging Corporation began business in 2021 by issuing 90000 shares of $5 par common stock for $8 per share and 20000 shares of 6% $10 par preferred stock for par.At year end the common stock had a market value of $10.On its December 31 2021 balance sheet Holden Packaging would report

Accepted Answer

A) Common Stock of $900000. 
B) Common Stock of $450000. 
C) Common Stock of $720000. 
D) Paid-In Capital of $675000. 
A) Common Stock of $900000. 
B) Common Stock of $450000. 
C) Common Stock of $720000. 
D) Paid-In Capital of $675000.

Question 14

Which of the following statements regarding the date of a cash dividend declaration is not accurate?

Accepted Answer

A) The dividend can be rescinded once it has been declared. 
B) The corporation is committed to a legal binding obligation. 
C) The board of directors formally authorizes the cash dividend. 
D) A liability account must be increased. 
A) The dividend can be rescinded once it has been declared. 
B) The corporation is committed to a legal binding obligation. 
C) The board of directors formally authorizes the cash dividend. 
D) A liability account must be increased.

Question 15

Which of the following most likely would be classified as a current liability?

Accepted Answer

A) Dividends payable 
B) Bonds payable in 5 years 
C) Three-year notes payable 
D) Mortgage payable as a single payment in 10 years 
A) Dividends payable 
B) Bonds payable in 5 years 
C) Three-year notes payable 
D) Mortgage payable as a single payment in 10 years

Question 16

Sales taxes collected by a retailer from a customer are expenses

Accepted Answer

A) of the retailer. 
B) of the customers. 
C) of the government. 
D) that are not recognized by the retailer until they are submitted to the government. 
A) of the retailer. 
B) of the customers. 
C) of the government. 
D) that are not recognized by the retailer until they are submitted to the government.

Question 17

If bonds sell at a premium the interest expense recognized each year will be greater than the bond interest paid.

Accepted Answer

A) True 
 B)False

Question 18

The following information pertains to Benedict Company.Assume that all balance sheet amounts represent average balance figures. $$\begin{array} { l r } 
\text { Total assets } & \$ 300,000 \
\text { Stockholders' equity-common } & 150,000 \
\text { Total stockholders' equity } & 200,000 \
\text { Sales revenue } & 100,000 \
\text { Net income } & 25,000 \
\text { Number of shares of common stock } & 6,000 \
\text { Common dividends } & 5,000 \
\text { Preferred dividends } & 7,000
\end{array}$$ What is the return on common stockholders' equity ratio for Benedict?

Accepted Answer

A) 16.7% 
B) 12.0% 
C) 13.3% 
D) 9.0% 
A) 16.7% 
B) 12.0% 
C) 13.3% 
D) 9.0%

Question 19

A corporation purchases 20000 shares of its own $20 par common stock for $35 per share recording it at cost.What will be the effect on total stockholders' equity?

Accepted Answer

A) Increase by $700000. 
B) Decrease by $400000. 
C) Decrease by $700000. 
D) Decrease by $300000. 
A) Increase by $700000. 
B) Decrease by $400000. 
C) Decrease by $700000. 
D) Decrease by $300000.

Question 20

If $150000 face value bonds are issued at 102 the proceeds received will be $102000.

Accepted Answer

A) True 
 B)False

Two classifications appearing in the paid-in capital section of the balance sheet are

On October 1 Forsythe Corporation issues 900 10-year 8% $1000 bonds dated October 1 2021 at 96.Use the following tabular analysis to record the issuance:

A note payable must always be paid before an account payable.

The contractual interest rate on a bond is often referred to as the

The net effects on the corporation of the declaration and payment of a cash dividend are to

Kaplan Manufacturing Corporation purchased 2500 shares of its own previously issued $10 par common stock for $62500.As a result of this event

The return on common stockholders' equity is computed by dividing net income

Molina Corporation issues 5000 10-year 8% $1000 bonds dated January 1 2021 at 103.Recording the issuance will show a(n)

Don's Pharmacy has collected $900 in sales taxes during March.If sales taxes must be remitted to the state government monthly recording this information includes a(n)

Treasury stock is a contra stockholders' equity account.

Holden Packaging Corporation began business in 2021 by issuing 90000 shares of $5 par common stock for $8 per share and 20000 shares of 6% $10 par preferred stock for par.At year end the common stock had a market value of $10.On its December 31 2021 balance sheet Holden Packaging would report

Which of the following statements regarding the date of a cash dividend declaration is not accurate?

Which of the following most likely would be classified as a current liability?

Sales taxes collected by a retailer from a customer are expenses

If bonds sell at a premium the interest expense recognized each year will be greater than the bond interest paid.

A corporation purchases 20000 shares of its own $20 par common stock for $35 per share recording it at cost.What will be the effect on total stockholders' equity?

If $150000 face value bonds are issued at 102 the proceeds received will be $102000.

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

Two classifications appearing in the paid-in capital section of the balance sheet are

On October 1 Forsythe Corporation issues 900 10-year 8% $1000 bonds dated October 1 2021 at 96.Use the following tabular analysis to record the issuance:

A note payable must always be paid before an account payable.

The contractual interest rate on a bond is often referred to as the

The net effects on the corporation of the declaration and payment of a cash dividend are to

Kaplan Manufacturing Corporation purchased 2500 shares of its own previously issued $10 par common stock for $62500.As a result of this event

The return on common stockholders' equity is computed by dividing net income

Molina Corporation issues 5000 10-year 8% $1000 bonds dated January 1 2021 at 103.Recording the issuance will show a(n)

Don's Pharmacy has collected $900 in sales taxes during March.If sales taxes must be remitted to the state government monthly recording this information includes a(n)

Treasury stock is a contra stockholders' equity account.

Holden Packaging Corporation began business in 2021 by issuing 90000 shares of $5 par common stock for $8 per share and 20000 shares of 6% $10 par preferred stock for par.At year end the common stock had a market value of $10.On its December 31 2021 balance sheet Holden Packaging would report

Which of the following statements regarding the date of a cash dividend declaration is not accurate?

Which of the following most likely would be classified as a current liability?

Sales taxes collected by a retailer from a customer are expenses

If bonds sell at a premium the interest expense recognized each year will be greater than the bond interest paid.

A corporation purchases 20000 shares of its own $20 par common stock for $35 per share recording it at cost.What will be the effect on total stockholders' equity?

If $150000 face value bonds are issued at 102 the proceeds received will be $102000.

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