Question 1

An example of secured bonds is ________.

Accepted Answer

A)  debentures 
B)  zero coupon bonds 
C)  mortgage bonds 
D)  serial bonds 
A)  debentures 
B)  zero coupon bonds 
C)  mortgage bonds 
D)  serial bonds

Question 2

LIFO uses the ________ costs to measure the cost of goods sold.

Accepted Answer

A)  latest 
B)  earliest 
C)  average 
D)  weighted-average 
A)  latest 
B)  earliest 
C)  average 
D)  weighted-average

Question 3

An example of a financing activity on the statement of cash flows is the conversion of debt to common stock.

Accepted Answer

A) True 
 B)False

Question 4

Par value is the value that is printed on the face of the stock certificate.

Accepted Answer

A) True 
 B)False

Question 5

The cash payment for the maturity value of bonds payable is included in the ________ section of the statement of cash flows.

Accepted Answer

A)  operating 
B)  investing 
C)  financing 
D)  noncash 
A)  operating 
B)  investing 
C)  financing 
D)  noncash

Question 6

Wheel Company has the following balances at December 31,2015:
 $\begin{array}{ll}\text { Retained earnings, December 31, } 2014&\$30,000\
\text { Cost of goods sold } & 56,000 \
\text { Depreciation expense } & 1,450 \
\text { Dividends } & 8,000 \
\text { Income taxexpense } & 2,000 \
\text { Interest expense } & 1,050 \
\text { Rent expense } & 1,700 \
\text { Sales } & 68,000 \
\text { Wage expense } & 6,800
\end{array}$ 
Required:
Prepare a multiple-step income statement for the year ended December 31,2015.

Accepted Answer

@#IMG-DLM& @#IMG-DLM& Operatin

Question 7

Maryland Company had net income of $21,850 for the year ended December 31,2015.Additional information from the income statement follows:
 $$\begin{array} { l l } 
\text { Depreciation expense } & \$ 8,400 \
\text { Intersit expense } & 3,900 \
\text { Income tax expense } & 5,700
\end{array}$$ 
The company also reported the following balances:
 $$\begin{array} { l l l } 
& \text { December } & \text { December } \
& \mathbf { 3 1 , 2 0 1 4 } & \mathbf { 3 1 , 2 0 1 5 } \
\text { Accounts receivable } & \$ 10,000 & \$ 11 , \mathrm {~B} 00 \
\text { Accounts payable } & \$ 20,000 & \$ 23,200 \
\text { Income taxes payable } & \$ 22,000 & \$ 21,300 \
\text { Inventory } & \$ 30,000 & \$ 25,000
\end{array}$$ 
Required:
Prepare the operating activities section of the statement of cash flows for the year ended December 31,2015.Use the indirect method.

Accepted Answer

The answer of Maryland Company had net income of $21,850...

Question 8

Which of the following items is NOT a component of stockholders' equity?

Accepted Answer

A)  paid-in capital 
B)  retained earnings 
C)  accumulated other comprehensive income 
D)  deferred income tax liabilities 
A)  paid-in capital 
B)  retained earnings 
C)  accumulated other comprehensive income 
D)  deferred income tax liabilities

Question 9

Why do accountants add Depreciation Expense to net income when determining net cash provided by operating activities? Assume the indirect method is used.

Accepted Answer

A)  because depreciation expense is a source of cash 
B)  because depreciation expense requires the outflow of cash 
C)  because depreciation expense is an investing activity that should be reported in the investing section of the cash flow statement 
D)  because it cancels the earlier deduction when calculating net income 
A)  because depreciation expense is a source of cash 
B)  because depreciation expense requires the outflow of cash 
C)  because depreciation expense is an investing activity that should be reported in the investing section of the cash flow statement 
D)  because it cancels the earlier deduction when calculating net income

Question 10

Which of the following events do NOT affect cash flows from operating activities? Assume the direct method is used.

Accepted Answer

A)  cash sale of merchandise inventory 
B)  cash purchase of equipment 
C)  cash purchase of inventory 
D)  cash paid for employees' wages 
A)  cash sale of merchandise inventory 
B)  cash purchase of equipment 
C)  cash purchase of inventory 
D)  cash paid for employees' wages

Question 11

The Allowance for Bad Debts account is added to the Accounts Receivable account on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 12

Deferred tax liabilities are ________.

Accepted Answer

A)  expected increases in future income taxes due to past transactions 
B)  expected decreases in future income taxes due to past transactions 
C)  expected increases in future income taxes due to future transactions 
D)  expected decreases in future income taxes due to future transactions 
A)  expected increases in future income taxes due to past transactions 
B)  expected decreases in future income taxes due to past transactions 
C)  expected increases in future income taxes due to future transactions 
D)  expected decreases in future income taxes due to future transactions

Question 13

The sections of the statement of cash flows are listed below:
Sections of Statement of Cash Flows
O = Operating activities
I = Investing activities
F = Financing activities
Required:
For each of the following items,identify the section of the statement of cash flows you would find the item.Assume the direct method is used.
_____ 1.Paid taxes of $15,000.
_____ 2.Borrowed $35,000 from the bank on a long-term note payable.
_____ 3.Collected $690,000 from customers.
_____ 4.Received $40,000 in dividend income.
_____ 5.Paid $12,000 to suppliers for inventory.
_____ 6.Issued common stock for $170,000 cash.
_____ 7.Purchased $120,000 in long-term securities for cash.
_____ 8.Paid $18,000 dividend on common stock.
_____ 9.Purchased land for $345,000 cash.
_____ 10.Sold long-term securities for cash.No gain or loss on sale.
_____ 11.Paid $210,000 on long-term debt.
_____ 12.Received $31,000 cash on sale of equipment.No gain or loss on sale.

Accepted Answer

1.O
2.F
3.O
4.O
5.O

Question 14

The LIFO method reports the latest costs for ending inventory.

Accepted Answer

A) True 
 B)False

Question 15

The following information is available for Anderson Company at December 31,2016:
 $\begin{array}{ll}
\text { Additional paid-in capital, common } & \$ 490,000 \
\text { Common stock, } \$ 5 \text { par value, } 40,000 \text { shares issued } & 200,000 \
\text { Dividends payable } & 415,000\
\text { Long-term investment in Jacobs Company }&1,400,000\
\text { Marketable securities } & 610,000 \
\text { Retained earnings } & 242,000 \
\text { Treasury stock, common, } 8,000 \text { shares } & 176,000
\end{array}$ 
Required:
Prepare the stockholders' equity section of a classified balance sheet at December 31,2016.Assume 400,000 shares of common stock are authorized to be issued.

Accepted Answer

Common stock,$5 par

Question 16

The statement of changes in stockholders' equity shows the changes in ________.

Accepted Answer

A)  retained earnings only 
B)  dividends only 
C)  each of the stockholders' equity accounts 
D)  fixed assets only 
A)  retained earnings only 
B)  dividends only 
C)  each of the stockholders' equity accounts 
D)  fixed assets only

Question 17

On January 1,2014,a company had 100 units of inventory.A company acquired 100 units of inventory on January 31,2014 and 100 units on December 1,2014.The company sold 100 units on December 31,2014,which was the company's only sale.Under FIFO,the cost of goods sold would come from ________.

Accepted Answer

A)  the purchase cost of beginning inventory 
B)  the purchase cost on January 31, 2014 
C)  the purchase cost on December 1, 2014 
D)  an average of the cost over the two purchase dates 
A)  the purchase cost of beginning inventory 
B)  the purchase cost on January 31, 2014 
C)  the purchase cost on December 1, 2014 
D)  an average of the cost over the two purchase dates

Question 18

When calculating diluted earnings per share,which of the following items is NOT considered?

Accepted Answer

A)  number of common shares outstanding 
B)  additional common shares from conversion of convertible securities 
C)  additional common shares from exercise of stock options 
D)  number of common shares authorized to be issued 
A)  number of common shares outstanding 
B)  additional common shares from conversion of convertible securities 
C)  additional common shares from exercise of stock options 
D)  number of common shares authorized to be issued

Question 19

An example of an operating activity on the statement of cash flows is cash dividends received on investments.Assume the direct method is used.

Accepted Answer

A) True 
 B)False

Question 20

Current liabilities are debts due within the ________ year or within the normal operating cycle if ________.

Accepted Answer

A)  past; longer than a year 
B)  next; longer than a year 
C)  past; shorter than a year 
D)  next; shorter than a year 
A)  past; longer than a year 
B)  next; longer than a year 
C)  past; shorter than a year 
D)  next; shorter than a year

An example of secured bonds is ________.

LIFO uses the ________ costs to measure the cost of goods sold.

An example of a financing activity on the statement of cash flows is the conversion of debt to common stock.

Par value is the value that is printed on the face of the stock certificate.

The cash payment for the maturity value of bonds payable is included in the ________ section of the statement of cash flows.

Which of the following items is NOT a component of stockholders' equity?

Why do accountants add Depreciation Expense to net income when determining net cash provided by operating activities? Assume the indirect method is used.

Which of the following events do NOT affect cash flows from operating activities? Assume the direct method is used.

The Allowance for Bad Debts account is added to the Accounts Receivable account on the balance sheet.

Deferred tax liabilities are ________.

The LIFO method reports the latest costs for ending inventory.

The statement of changes in stockholders' equity shows the changes in ________.

On January 1,2014,a company had 100 units of inventory.A company acquired 100 units of inventory on January 31,2014 and 100 units on December 1,2014.The company sold 100 units on December 31,2014,which was the company's only sale.Under FIFO,the cost of goods sold would come from ________.

When calculating diluted earnings per share,which of the following items is NOT considered?

An example of an operating activity on the statement of cash flows is cash dividends received on investments.Assume the direct method is used.

Current liabilities are debts due within the year or within the normal operating cycle if .

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 16: Understanding Corporate Annual Reports: Basic Financial Statements

An example of secured bonds is ________.

LIFO uses the ________ costs to measure the cost of goods sold.

An example of a financing activity on the statement of cash flows is the conversion of debt to common stock.

Par value is the value that is printed on the face of the stock certificate.

The cash payment for the maturity value of bonds payable is included in the ________ section of the statement of cash flows.

Which of the following items is NOT a component of stockholders' equity?

Why do accountants add Depreciation Expense to net income when determining net cash provided by operating activities? Assume the indirect method is used.

Which of the following events do NOT affect cash flows from operating activities? Assume the direct method is used.

The Allowance for Bad Debts account is added to the Accounts Receivable account on the balance sheet.

Deferred tax liabilities are ________.

The LIFO method reports the latest costs for ending inventory.

The statement of changes in stockholders' equity shows the changes in ________.

On January 1,2014,a company had 100 units of inventory.A company acquired 100 units of inventory on January 31,2014 and 100 units on December 1,2014.The company sold 100 units on December 31,2014,which was the company's only sale.Under FIFO,the cost of goods sold would come from ________.

When calculating diluted earnings per share,which of the following items is NOT considered?

An example of an operating activity on the statement of cash flows is cash dividends received on investments.Assume the direct method is used.

Current liabilities are debts due within the ________ year or within the normal operating cycle if ________.

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding and Analyzing Consolidated Financial Statements

Filters

Current liabilities are debts due within the year or within the normal operating cycle if .