Question 1

Total interest cost for a bond issued at a premium equals the total of the periodic interest payments minus the premium.

Accepted Answer

A) True 
 B)False

Question 2

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 payout ratio for 2021 is

Accepted Answer

A) 45%. 
B) 25%. 
C) 20%. 
D) 5%. 
A) 45%. 
B) 25%. 
C) 20%. 
D) 5%.

Question 3

The payout ratio is computed by dividing

Accepted Answer

A) total cash dividends paid to common stockholders by retained earnings. 
B) dividends paid per share by net income. 
C) total cash dividends paid to common stockholders by net income. 
D) dividends paid per share by year-end stock price. 
A) total cash dividends paid to common stockholders by retained earnings. 
B) dividends paid per share by net income. 
C) total cash dividends paid to common stockholders by net income. 
D) dividends paid per share by year-end stock price.

Question 4

Treasury stock is reported as an asset on the balance sheet because treasury stock may later be resold.

Accepted Answer

A) True 
 B)False

Question 5

The interest expense recorded on an interest payment date is increased

Accepted Answer

A) by the amortization of premium on bonds payable. 
B) by the amortization of discount on bonds payable. 
C) only if the bonds were sold at face value. 
D) only if the market rate of interest is less than the stated rate of interest on that date. 
A) by the amortization of premium on bonds payable. 
B) by the amortization of discount on bonds payable. 
C) only if the bonds were sold at face value. 
D) only if the market rate of interest is less than the stated rate of interest on that date.

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 pay off of the note and interest at maturity assuming that interest has been accrued to September 30:

Accepted Answer

A) Decrease to Notes Payable and to Cash for $522500. 
B) Decrease to Notes Payable for $500000 decrease to Interest Payable for $22500 and a decrease to Cash for $522500. 
C) Increase to Interest Expense for $22500 decrease to Notes Payable for $500000 and a decrease to Cash for $522500. 
D) Decrease to Interest Payable for $15000 decrease to Notes Payable for $500000 increase to Interest Expense for $7500 and a decrease to Cash for $522500. 
A) Decrease to Notes Payable and to Cash for $522500. 
B) Decrease to Notes Payable for $500000 decrease to Interest Payable for $22500 and a decrease to Cash for $522500. 
C) Increase to Interest Expense for $22500 decrease to Notes Payable for $500000 and a decrease to Cash for $522500. 
D) Decrease to Interest Payable for $15000 decrease to Notes Payable for $500000 increase to Interest Expense for $7500 and a decrease to Cash for $522500.

Question 7

Very often failure to record a liability means failure to record a(n)

Accepted Answer

A) revenue. 
B) asset conversion. 
C) footnote. 
D) expense. 
A) revenue. 
B) asset conversion. 
C) footnote. 
D) expense.

Question 8

On December 1 SJ Company issued 800 shares of no-par common stock for $7200.The stock has stated value of $2 per share? Use the following tabular analysis to record the receipt of cash and issuance of shares:

Accepted Answer

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

Question 9

West County Bank agrees to lend Drake Builders Company $400000 on January 1.Drake Builders Company signs a $400000 6% 6-month note.Recording the proceeds and issuance of the note by Drake Builders Company on January 1 includes a(n)

Accepted Answer

A) Increase to Interest Expense for $6000 increase to Cash for $194000 and an increase to Notes Payable for $400000. 
B) Increase to Cash and to Notes Payable for $400000. 
C) Increase to Cash for $400000 increase to Interest Expense for $12000 and an increase to Notes Payable for $412000. 
D) Increase to Cash for $400000 increase to Interest Expense for $12000 increase to Notes Payable for $400000 and an increase to Interest Payable for $12000. 
A) Increase to Interest Expense for $6000 increase to Cash for $194000 and an increase to Notes Payable for $400000. 
B) Increase to Cash and to Notes Payable for $400000. 
C) Increase to Cash for $400000 increase to Interest Expense for $12000 and an increase to Notes Payable for $412000. 
D) Increase to Cash for $400000 increase to Interest Expense for $12000 increase to Notes Payable for $400000 and an increase to Interest Payable for $12000.

Question 10

If common stock is issued for an amount greater than par value the excess would increase

Accepted Answer

A) Cash. 
B) Retained Earnings. 
C) Paid-in Capital in Excess of Par Value. 
D) Legal Capital. 
A) Cash. 
B) Retained Earnings. 
C) Paid-in Capital in Excess of Par Value. 
D) Legal Capital.

Question 11

Blowing Rock Manufacturing Corporation purchased 15000 shares of its own previously issued $1 par common stock for $150000.Use the following tabular analysis to record this event:

Accepted Answer

A) Decrease Cash $150000 and decrease Common Stock $150000. 
B) Decrease Cash $150000 and increase Treasury Stock $150000. 
C) Decrease Cash $150000 and increase Dividends $150000. 
D) Decrease Cash $150000 decrease Common Stock $15000 and increase Expenses $135000. 
A) Decrease Cash $150000 and decrease Common Stock $150000. 
B) Decrease Cash $150000 and increase Treasury Stock $150000. 
C) Decrease Cash $150000 and increase Dividends $150000. 
D) Decrease Cash $150000 decrease Common Stock $15000 and increase Expenses $135000.

Question 12

Ace Inc.has 10000 shares of 4% $100 par value cumulative preferred stock and 50000 shares of $1 par value common stock outstanding at December 31 2021.What is the annual dividend on the preferred stock?

Accepted Answer

A) $40 per share 
B) $40000 in total 
C) $4000 in total 
D) $0.40 per share 
A) $40 per share 
B) $40000 in total 
C) $4000 in total 
D) $0.40 per share

Question 13

On June 1 B.Penelope Company issues 5000 shares of $5 par value common stock for $210000.Use the following tabular analysis to record the receipt of cash and issuance of shares:

Accepted Answer

A) Increase Cash $210000 increase Common Stock $185000 and increase Paid-in-Capital in Excess of Par $25000. 
B) Increase Cash $210000 increase Common Stock $25000 and increase Stock Revenue $185000. 
C) Increase Cash $210000 and increase Sales Revenue $210000 
D) Increase Cash $210000 increase Common Stock $25000 and increase Paid-in-Capital in Excess of Par $185000. 
A) Increase Cash $210000 increase Common Stock $185000 and increase Paid-in-Capital in Excess of Par $25000. 
B) Increase Cash $210000 increase Common Stock $25000 and increase Stock Revenue $185000. 
C) Increase Cash $210000 and increase Sales Revenue $210000 
D) Increase Cash $210000 increase Common Stock $25000 and increase Paid-in-Capital in Excess of Par $185000.

Question 14

Total interest cost for a bond issued at a premium equals the total of the periodic interest payments added to the premium.

Accepted Answer

A) True 
 B)False

Question 15

The effect of the declaration of a cash dividend by the board of directors is to $\begin{array}{cc}
& \text { Increase }& \text {Decrease }\
a.&\text { Stockholders' equity } & \text { Assets } \
b.&\text { Assets } & \text { Liabilities } \
c.&\text { Liabilities } & \text { Stockholders' equity } \
d.&\text { Liabilities } & \text { Assets }
\end{array}$

Accepted Answer

The answer of The effect of the declaration of a...

Question 16

When bonds are issued at a premium the total interest cost of the bonds over the life of the bonds is equal to the amount of

Accepted Answer

A) interest paid over the life of the bond. 
B) interest paid over the life of the bond plus the amount of premium at sale point. 
C) interest paid over the life of the bond minus the amount of premium at sale point. 
D) premium at sale point. 
A) interest paid over the life of the bond. 
B) interest paid over the life of the bond plus the amount of premium at sale point. 
C) interest paid over the life of the bond minus the amount of premium at sale point. 
D) premium at sale point.

Question 17

Most notes are not interest bearing.

Accepted Answer

A) True 
 B)False

Question 18

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Accepted Answer

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

Question 19

Five thousand bonds with a face value of $1000 each are sold at 97.Recording the issuance includes a(n)

Accepted Answer

A) Increase to Cash and an increase to Bonds Payable for $ 4850000. 
B) Increase to Cash for $4850000 and to Discount on Bonds Payable for $150000 and an increase to Bonds Payable for $5000000. 
C) Increase to Cash for $4850000 and an increases to Premium on Bonds Payable for $150000 and to Bonds Payable for $5000000. 
D) Increase to Cash for $5000000 a decrease to Discount on Bonds Payable for $150000 and an increase to Bonds Payable for $4850000. 
A) Increase to Cash and an increase to Bonds Payable for $ 4850000. 
B) Increase to Cash for $4850000 and to Discount on Bonds Payable for $150000 and an increase to Bonds Payable for $5000000. 
C) Increase to Cash for $4850000 and an increases to Premium on Bonds Payable for $150000 and to Bonds Payable for $5000000. 
D) Increase to Cash for $5000000 a decrease to Discount on Bonds Payable for $150000 and an increase to Bonds Payable for $4850000.

Question 20

A cash register tape shows cash sales of $3000 and sales taxes of $200.The recording of this information includes a(n)

Accepted Answer

A) Increase to Cash and an increase to Sales Revenue for $3200. 
B) Increase to Cash for $3200 an increase to Sales Tax Payable for $200 and an increase to Sales Revenue for $3000. 
C) Increase to Cash for $3000 an increase to Sales Tax Expense for $200 and an increase to Sales Revenue for $3200. 
D) Increase to Cash for $3200 an increase to Sales Revenue for $3000 and an increase to Sales Tax Revenue for $200. 
A) Increase to Cash and an increase to Sales Revenue for $3200. 
B) Increase to Cash for $3200 an increase to Sales Tax Payable for $200 and an increase to Sales Revenue for $3000. 
C) Increase to Cash for $3000 an increase to Sales Tax Expense for $200 and an increase to Sales Revenue for $3200. 
D) Increase to Cash for $3200 an increase to Sales Revenue for $3000 and an increase to Sales Tax Revenue for $200.

Total interest cost for a bond issued at a premium equals the total of the periodic interest payments minus the premium.

The payout ratio is computed by dividing

Treasury stock is reported as an asset on the balance sheet because treasury stock may later be resold.

The interest expense recorded on an interest payment date is increased

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 pay off of the note and interest at maturity assuming that interest has been accrued to September 30:

Very often failure to record a liability means failure to record a(n)

On December 1 SJ Company issued 800 shares of no-par common stock for $7200.The stock has stated value of $2 per share? Use the following tabular analysis to record the receipt of cash and issuance of shares:

West County Bank agrees to lend Drake Builders Company $400000 on January 1.Drake Builders Company signs a $400000 6% 6-month note.Recording the proceeds and issuance of the note by Drake Builders Company on January 1 includes a(n)

If common stock is issued for an amount greater than par value the excess would increase

Blowing Rock Manufacturing Corporation purchased 15000 shares of its own previously issued $1 par common stock for $150000.Use the following tabular analysis to record this event:

Ace Inc.has 10000 shares of 4% $100 par value cumulative preferred stock and 50000 shares of $1 par value common stock outstanding at December 31 2021.What is the annual dividend on the preferred stock?

On June 1 B.Penelope Company issues 5000 shares of $5 par value common stock for $210000.Use the following tabular analysis to record the receipt of cash and issuance of shares:

Total interest cost for a bond issued at a premium equals the total of the periodic interest payments added to the premium.

The effect of the declaration of a cash dividend by the board of directors is to Increase Decrease a. Stockholders' equity Assets b. Assets Liabilities c. Liabilities Stockholders' equity d. Liabilities Assets

When bonds are issued at a premium the total interest cost of the bonds over the life of the bonds is equal to the amount of

Most notes are not interest bearing.

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Five thousand bonds with a face value of $1000 each are sold at 97.Recording the issuance includes a(n)

A cash register tape shows cash sales of $3000 and sales taxes of $200.The recording of this information includes a(n)

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

Total interest cost for a bond issued at a premium equals the total of the periodic interest payments minus the premium.

The payout ratio is computed by dividing

Treasury stock is reported as an asset on the balance sheet because treasury stock may later be resold.

The interest expense recorded on an interest payment date is increased

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 pay off of the note and interest at maturity assuming that interest has been accrued to September 30:

Very often failure to record a liability means failure to record a(n)

On December 1 SJ Company issued 800 shares of no-par common stock for $7200.The stock has stated value of $2 per share? Use the following tabular analysis to record the receipt of cash and issuance of shares:

West County Bank agrees to lend Drake Builders Company $400000 on January 1.Drake Builders Company signs a $400000 6% 6-month note.Recording the proceeds and issuance of the note by Drake Builders Company on January 1 includes a(n)

If common stock is issued for an amount greater than par value the excess would increase

Blowing Rock Manufacturing Corporation purchased 15000 shares of its own previously issued $1 par common stock for $150000.Use the following tabular analysis to record this event:

Ace Inc.has 10000 shares of 4% $100 par value cumulative preferred stock and 50000 shares of $1 par value common stock outstanding at December 31 2021.What is the annual dividend on the preferred stock?

On June 1 B.Penelope Company issues 5000 shares of $5 par value common stock for $210000.Use the following tabular analysis to record the receipt of cash and issuance of shares:

Total interest cost for a bond issued at a premium equals the total of the periodic interest payments added to the premium.

The effect of the declaration of a cash dividend by the board of directors is to Increase Decrease a. Stockholders' equity Assets b. Assets Liabilities c. Liabilities Stockholders' equity d. Liabilities Assets

When bonds are issued at a premium the total interest cost of the bonds over the life of the bonds is equal to the amount of

Most notes are not interest bearing.

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Five thousand bonds with a face value of $1000 each are sold at 97.Recording the issuance includes a(n)

A cash register tape shows cash sales of $3000 and sales taxes of $200.The recording of this information includes a(n)

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