Question 1

What options does a business have when financing operations?

Accepted Answer

A) Debt financing 
B) Equity financing 
C) Asset financing 
D) Both debt financing and equity financing 
A) Debt financing 
B) Equity financing 
C) Asset financing 
D) Both debt financing and equity financing

Question 2

A corporation has 10,000 shares of $25 par value stock outstanding that has a current market value of $100.If the corporation issues a 5-for-1 stock split,the market value of the stock will fall to approximately $20.

Accepted Answer

A) True 
 B)False

Question 3

Current liabilities are

Accepted Answer

A) due but not receivable for more than one year. 
B) due but not payable for more than one year. 
C) due and receivable within one year. 
D) due and payable within one year. 
A) due but not receivable for more than one year. 
B) due but not payable for more than one year. 
C) due and receivable within one year. 
D) due and payable within one year.

Question 4

During the first year of operations,employees earned vacation pay of $50,000.The vacations will be taken during the second year.The vacation pay expense should be recorded in the first year of operations.

Accepted Answer

A) True 
 B)False

Question 5

If the market rate of interest is 10%,a $10,000,12%,10-year bond that pays interest semiannually would sell at an amount

Accepted Answer

A) less than face value. 
B) equal to the face value. 
C) greater than face value. 
D) that cannot be determined. 
A) less than face value. 
B) equal to the face value. 
C) greater than face value. 
D) that cannot be determined.

Question 6

Federal unemployment compensation taxes that are collected by the federal government are not paid directly to the unemployed but are allocated among the states for use in state programs.

Accepted Answer

A) True 
 B)False

Question 7

A corporation has 10,000 shares of $100 par value stock outstanding.If the corporation issues a 4-for-1 stock split,the number of shares outstanding after the split will be 40,000.

Accepted Answer

A) True 
 B)False

Question 8

If $4,000,000 of 12% bonds are issued at 103 1/4,the amount of cash received from the sale is

Accepted Answer

A) $4,040,000. 
B) $4,000,000. 
C) $4,130,000. 
D) $3,520,000. 
A) $4,040,000. 
B) $4,000,000. 
C) $4,130,000. 
D) $3,520,000.

Question 9

Obligations that depend on future events and are based on past transactions are contingent liabilities.

Accepted Answer

A) True 
 B)False

Question 10

Before a stock dividend can be declared or paid,there must be sufficient cash.

Accepted Answer

A) True 
 B)False

Question 11

Gross earnings for a payroll period less payroll deductions are referred to as

Accepted Answer

A) overtime pay. 
B) bonus pay. 
C) gross pay. 
D) net pay. 
A) overtime pay. 
B) bonus pay. 
C) gross pay. 
D) net pay.

Question 12

A corporation has the following stockholders' equity accounts at the end of the current fiscal year,after all closing entries have been posted: Common Stock,$5 par,$2,000,000;Paid-In Capital in Excess of Par--Common Stock,$375,000;Retained Earnings,$1,285,000.The earnings for the current year,during which there were no unusual items,were $300,000.
Compute the earnings per share of common stock.

Accepted Answer

$.75 per s

Question 13

Stockholders' equity

Accepted Answer

A) is usually equal to cash on hand. 
B) includes paid-in capital and liabilities. 
C) includes retained earnings and paid-in capital. 
D) is shown on the income statement. 
A) is usually equal to cash on hand. 
B) includes paid-in capital and liabilities. 
C) includes retained earnings and paid-in capital. 
D) is shown on the income statement.

Question 14

Current liabilities are

Accepted Answer

A) due and receivable within one year. 
B) due and to be paid out of current assets within one year. 
C) due but not payable for more than one year. 
D) payable if a possible subsequent event occurs. 
A) due and receivable within one year. 
B) due and to be paid out of current assets within one year. 
C) due but not payable for more than one year. 
D) payable if a possible subsequent event occurs.

Question 15

Obligations that depend on past events and that are based on future transactions are contingent liabilities.

Accepted Answer

A) True 
 B)False

Question 16

If paid-in capital in excess of par--preferred stock is $80,000,preferred stock is $500,000,paid-in capital in excess of par--common stock is $50,000,common stock is $1,000,000,and retained earnings is $230,000,the total stockholders' equity is $1,860,000.

Accepted Answer

A) True 
 B)False

Question 17

Cash dividends are not paid on shares of treasury stock.

Accepted Answer

A) True 
 B)False

Question 18

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 75,000 shares were originally issued and 5,000 were subsequently reacquired.What is the number of shares outstanding?

Accepted Answer

A) 10,000 
B) 70,000 
C) 50,000 
D) 60,000 
A) 10,000 
B) 70,000 
C) 50,000 
D) 60,000

Question 19

An employee receives an hourly rate of $27,with time and a half for all hours worked in excess of 40 during a week.Payroll data for the current week are as follows: hours worked,46;federal income tax withheld,$350;cumulative earnings for year prior to current week,$99,700;social security tax rate,6.0% on maximum of $106,800;and Medicare tax rate,1.5% on all earnings.What is the net pay for the employee?

Accepted Answer

A) $798.85 
B) $873.77 
C) $953.16 
D) $1,223.77 
A) $798.85 
B) $873.77 
C) $953.16 
D) $1,223.77

Question 20

Which of the following is usually NOT a prerequisite to paying a cash dividend?

Accepted Answer

A) Formal action by the board of directors 
B) Market value in excess of par value per share 
C) Sufficient cash 
D) Sufficient retained earnings 
A) Formal action by the board of directors 
B) Market value in excess of par value per share 
C) Sufficient cash 
D) Sufficient retained earnings

What options does a business have when financing operations?

A corporation has 10,000 shares of $25 par value stock outstanding that has a current market value of $100.If the corporation issues a 5-for-1 stock split,the market value of the stock will fall to approximately $20.

Current liabilities are

During the first year of operations,employees earned vacation pay of $50,000.The vacations will be taken during the second year.The vacation pay expense should be recorded in the first year of operations.

If the market rate of interest is 10%,a $10,000,12%,10-year bond that pays interest semiannually would sell at an amount

Federal unemployment compensation taxes that are collected by the federal government are not paid directly to the unemployed but are allocated among the states for use in state programs.

A corporation has 10,000 shares of $100 par value stock outstanding.If the corporation issues a 4-for-1 stock split,the number of shares outstanding after the split will be 40,000.

If $4,000,000 of 12% bonds are issued at 103 1/4,the amount of cash received from the sale is

Obligations that depend on future events and are based on past transactions are contingent liabilities.

Before a stock dividend can be declared or paid,there must be sufficient cash.

Gross earnings for a payroll period less payroll deductions are referred to as

Stockholders' equity

Current liabilities are

Obligations that depend on past events and that are based on future transactions are contingent liabilities.

If paid-in capital in excess of par--preferred stock is $80,000,preferred stock is $500,000,paid-in capital in excess of par--common stock is $50,000,common stock is $1,000,000,and retained earnings is $230,000,the total stockholders' equity is $1,860,000.

Cash dividends are not paid on shares of treasury stock.

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 75,000 shares were originally issued and 5,000 were subsequently reacquired.What is the number of shares outstanding?

Which of the following is usually NOT a prerequisite to paying a cash dividend?

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Exam 8: Liabilities and Stockholders Equity

What options does a business have when financing operations?

A corporation has 10,000 shares of $25 par value stock outstanding that has a current market value of $100.If the corporation issues a 5-for-1 stock split,the market value of the stock will fall to approximately $20.

Current liabilities are

During the first year of operations,employees earned vacation pay of $50,000.The vacations will be taken during the second year.The vacation pay expense should be recorded in the first year of operations.

If the market rate of interest is 10%,a $10,000,12%,10-year bond that pays interest semiannually would sell at an amount

Federal unemployment compensation taxes that are collected by the federal government are not paid directly to the unemployed but are allocated among the states for use in state programs.

A corporation has 10,000 shares of $100 par value stock outstanding.If the corporation issues a 4-for-1 stock split,the number of shares outstanding after the split will be 40,000.

If $4,000,000 of 12% bonds are issued at 103 1/4,the amount of cash received from the sale is

Obligations that depend on future events and are based on past transactions are contingent liabilities.

Before a stock dividend can be declared or paid,there must be sufficient cash.

Gross earnings for a payroll period less payroll deductions are referred to as

Stockholders' equity

Current liabilities are

Obligations that depend on past events and that are based on future transactions are contingent liabilities.

If paid-in capital in excess of par--preferred stock is $80,000,preferred stock is $500,000,paid-in capital in excess of par--common stock is $50,000,common stock is $1,000,000,and retained earnings is $230,000,the total stockholders' equity is $1,860,000.

Cash dividends are not paid on shares of treasury stock.

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 75,000 shares were originally issued and 5,000 were subsequently reacquired.What is the number of shares outstanding?

Which of the following is usually NOT a prerequisite to paying a cash dividend?

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters