Question 1

The interest charged on a $350000 note payable at the rate of 6% for a year would be

Accepted Answer

A) $21000. 
B) $10500. 
C) $5250. 
D) $1750. 
A) $21000. 
B) $10500. 
C) $5250. 
D) $1750.

Question 2

On October 1 Sam's Painting Service borrows $150000 from National Bank on a 3-month $150000 4% note.The payment of the note and accrued interest on January 1 by Sam's Painting Service includes a(n)

Accepted Answer

A) Decrease to Notes Payable and to Cash for $151500. 
B) Decrease to Notes Payable for $150000 decrease to Interest Payable for $1500 and a decrease to Cash for $151500. 
C) Decrease to Notes Payable for $150000 and a decrease to Interest Payable for $6000 and a decrease to Cash for $156000. 
D) Decrease to Notes Payable for $150000 an increase to Interest Expense for $1500 and a decrease to Cash for $151500. 
A) Decrease to Notes Payable and to Cash for $151500. 
B) Decrease to Notes Payable for $150000 decrease to Interest Payable for $1500 and a decrease to Cash for $151500. 
C) Decrease to Notes Payable for $150000 and a decrease to Interest Payable for $6000 and a decrease to Cash for $156000. 
D) Decrease to Notes Payable for $150000 an increase to Interest Expense for $1500 and a decrease to Cash for $151500.

Question 3

The issuance of common stock affects both paid-in capital and retained earnings.

Accepted Answer

A) True 
 B)False

Question 4

With an interest-bearing note the amount of cash received upon issuance of the note generally exceeds the note's face value.

Accepted Answer

A) True 
 B)False

Question 5

Paid-in capital is the amount paid in to the corporation by stockholders in exchange for shares of ownership.

Accepted Answer

A) True 
 B)False

Question 6

Moss County Bank agrees to lend the Sadowski Brick Company $500000 on January 1.Sadowski Brick Company signs a $500000 6% 9-month note.Recording the pay off of the note and interest at maturity assuming that interest has been accrued to September 30 includes a(n)

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

Interest expense on a note payable is only recorded at maturity.

Accepted Answer

A) True 
 B)False

Question 8

Bond discount should be amortized to comply with

Accepted Answer

A) the historical cost principle. 
B) the expense recognition principle. 
C) the revenue recognition principle. 
D) conservatism. 
A) the historical cost principle. 
B) the expense recognition principle. 
C) the revenue recognition principle. 
D) conservatism.

Question 9

The amount of sales tax collected by a retail store when making sales is

Accepted Answer

A) a miscellaneous revenue for the store. 
B) a current liability. 
C) not recorded because it is a tax paid by the customer. 
D) recorded as an operating expense. 
A) a miscellaneous revenue for the store. 
B) a current liability. 
C) not recorded because it is a tax paid by the customer. 
D) recorded as an operating expense.

Question 10

Preferred stockholders generally do not have the right to vote for the board of directors.

Accepted Answer

A) True 
 B)False

Question 11

A retailer that collects sales taxes is acting as an agent for the

Accepted Answer

A) wholesaler. 
B) customer. 
C) taxing authority. 
D) chamber of commerce. 
A) wholesaler. 
B) customer. 
C) taxing authority. 
D) chamber of commerce.

Question 12

If Norben Company issues 6000 shares of $5 par value common stock for $210000

Accepted Answer

A) Common Stock will be increased for $210000. 
B) Paid-in Capital in Excess of Par Value will be increased for $30000. 
C) Paid-in Capital in Excess of Par Value will be increased for $180000. 
D) Cash will be increased for $180000. 
A) Common Stock will be increased for $210000. 
B) Paid-in Capital in Excess of Par Value will be increased for $30000. 
C) Paid-in Capital in Excess of Par Value will be increased for $180000. 
D) Cash will be increased for $180000.

Question 13

Treasury stock should be reported in the financial statements of a corporation as a(n)

Accepted Answer

A) investment. 
B) liability. 
C) deduction from total paid-in capital. 
D) deduction from total paid-in capital and retained earnings. 
A) investment. 
B) liability. 
C) deduction from total paid-in capital. 
D) deduction from total paid-in capital and retained earnings.

Question 14

Lynn and Jan operate a bed and breakfast on the coast of Alabama.As customers make reservations they are required to pay cash in advance equal to one-half of the rate for their stay.On January 21 they took a reservation for a booking in May 27-29 with a total cost of $900.Use the following tabular analysis to record the cash receipt on that date:

Accepted Answer

A) Increase Cash $450 and Unearned Revenue $450. 
B) Increase Cash $450 and Service Revenue $450. 
C) Increase Cash $450 increase Accounts Receivable $450 and increase Service Revenue $900. 
D) Increase Accounts Receivable $450 increase Cash $450 increase Service Revenue $450 and increase Unearned Revenue $450. 
A) Increase Cash $450 and Unearned Revenue $450. 
B) Increase Cash $450 and Service Revenue $450. 
C) Increase Cash $450 increase Accounts Receivable $450 and increase Service Revenue $900. 
D) Increase Accounts Receivable $450 increase Cash $450 increase Service Revenue $450 and increase Unearned Revenue $450.

Question 15

Yanik Corporation issues 5000 10-year 8% $1000 bonds dated January 1 2021 at 97.Recording the issuance will show a(n)

Accepted Answer

A) increase to Cash of $5000000. 
B) increase to Discount on Bonds Payable for $150000. 
C) increase to Bonds Payable for $4850000. 
D) decrease to Cash for $4850000. 
A) increase to Cash of $5000000. 
B) increase to Discount on Bonds Payable for $150000. 
C) increase to Bonds Payable for $4850000. 
D) decrease to Cash for $4850000.

Question 16

The number of shares of issued stock equals

Accepted Answer

A) unissued shares minus outstanding shares. 
B) outstanding shares plus treasury shares. 
C) authorized shares minus treasury shares. 
D) outstanding shares plus authorized shares. 
A) unissued shares minus outstanding shares. 
B) outstanding shares plus treasury shares. 
C) authorized shares minus treasury shares. 
D) outstanding shares plus authorized shares.

Question 17

Moss County Bank agrees to lend the Sadowski Brick Company $500000 on January 1.Sadowski Brick Company signs a $500000 6% 9-month note.The adjustment required if Sadowski Brick Company prepares financial statements on June 30 includes a(n)

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 Interest Payable and to Cash for $15000. 
D) Decrease to Interest 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 Interest Payable and to Cash for $15000. 
D) Decrease to Interest Payable and to Interest Expense for $15000.

Question 18

The higher the sales tax rate the more profit a retailer can earn.

Accepted Answer

A) True 
 B)False

Question 19

Interest expense is reported under Other Expenses and Losses in the income statement.

Accepted Answer

A) True 
 B)False

Question 20

XYZ Company has $20000 of dividends in arrears.Based on this information which of the following statements is false?

Accepted Answer

A) Dividends in arrears are not considered to be liabilities. 
B) An obligation for dividends in arrears exists only after the board of directors declares payment. 
C) The investment community looks favorably on companies with dividends in arrears since the money is redirected toward more important growth opportunities. 
D) The amount of dividends in arrears should be disclosed in the notes to the financial statements. 
A) Dividends in arrears are not considered to be liabilities. 
B) An obligation for dividends in arrears exists only after the board of directors declares payment. 
C) The investment community looks favorably on companies with dividends in arrears since the money is redirected toward more important growth opportunities. 
D) The amount of dividends in arrears should be disclosed in the notes to the financial statements.

The interest charged on a $350000 note payable at the rate of 6% for a year would be

On October 1 Sam's Painting Service borrows $150000 from National Bank on a 3-month $150000 4% note.The payment of the note and accrued interest on January 1 by Sam's Painting Service includes a(n)

The issuance of common stock affects both paid-in capital and retained earnings.

With an interest-bearing note the amount of cash received upon issuance of the note generally exceeds the note's face value.

Paid-in capital is the amount paid in to the corporation by stockholders in exchange for shares of ownership.

Moss County Bank agrees to lend the Sadowski Brick Company $500000 on January 1.Sadowski Brick Company signs a $500000 6% 9-month note.Recording the pay off of the note and interest at maturity assuming that interest has been accrued to September 30 includes a(n)

Interest expense on a note payable is only recorded at maturity.

Bond discount should be amortized to comply with

The amount of sales tax collected by a retail store when making sales is

Preferred stockholders generally do not have the right to vote for the board of directors.

A retailer that collects sales taxes is acting as an agent for the

If Norben Company issues 6000 shares of $5 par value common stock for $210000

Treasury stock should be reported in the financial statements of a corporation as a(n)

Yanik Corporation issues 5000 10-year 8% $1000 bonds dated January 1 2021 at 97.Recording the issuance will show a(n)

The number of shares of issued stock equals

Moss County Bank agrees to lend the Sadowski Brick Company $500000 on January 1.Sadowski Brick Company signs a $500000 6% 9-month note.The adjustment required if Sadowski Brick Company prepares financial statements on June 30 includes a(n)

The higher the sales tax rate the more profit a retailer can earn.

Interest expense is reported under Other Expenses and Losses in the income statement.

XYZ Company has $20000 of dividends in arrears.Based on this information which of the following statements is false?

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

The interest charged on a $350000 note payable at the rate of 6% for a year would be

On October 1 Sam's Painting Service borrows $150000 from National Bank on a 3-month $150000 4% note.The payment of the note and accrued interest on January 1 by Sam's Painting Service includes a(n)

The issuance of common stock affects both paid-in capital and retained earnings.

With an interest-bearing note the amount of cash received upon issuance of the note generally exceeds the note's face value.

Paid-in capital is the amount paid in to the corporation by stockholders in exchange for shares of ownership.

Moss County Bank agrees to lend the Sadowski Brick Company $500000 on January 1.Sadowski Brick Company signs a $500000 6% 9-month note.Recording the pay off of the note and interest at maturity assuming that interest has been accrued to September 30 includes a(n)

Interest expense on a note payable is only recorded at maturity.

Bond discount should be amortized to comply with

The amount of sales tax collected by a retail store when making sales is

Preferred stockholders generally do not have the right to vote for the board of directors.

A retailer that collects sales taxes is acting as an agent for the

If Norben Company issues 6000 shares of $5 par value common stock for $210000

Treasury stock should be reported in the financial statements of a corporation as a(n)

Yanik Corporation issues 5000 10-year 8% $1000 bonds dated January 1 2021 at 97.Recording the issuance will show a(n)

The number of shares of issued stock equals

Moss County Bank agrees to lend the Sadowski Brick Company $500000 on January 1.Sadowski Brick Company signs a $500000 6% 9-month note.The adjustment required if Sadowski Brick Company prepares financial statements on June 30 includes a(n)

The higher the sales tax rate the more profit a retailer can earn.

Interest expense is reported under Other Expenses and Losses in the income statement.

XYZ Company has $20000 of dividends in arrears.Based on this information which of the following statements is false?

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