Question 1

Treasury stock is a deduction from total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 2

Sales less cost of goods sold

Accepted Answer

The answer of Sales less cost of goods sold...

Question 3

Provides debt holders with first claim on specified assets

Accepted Answer

The answer of Provides debt holders with first claim on...

Question 4

Creditors cannot seek payment from shareholders as individuals if the corporation itself cannot pay its debt

Accepted Answer

The answer of Creditors cannot seek payment from shareholders as...

Question 5

The Beehive Company acquired merchandise inventory costing $10,000 on September 1. The company will not pay for the inventory until October 1. This transaction will affect the Beehive Company by:

Accepted Answer

A)  increasing the Merchandise Inventory account by $10,000 and decreasing the Capital account by $10,000 
B)  increasing the Merchandise Inventory account by $10,000 and decreasing the Accounts Payable account by $10,000 
C)  increasing the Merchandise Inventory account by $10,000 and increasing the Capital account by $10,000 
D)  increasing the Merchandise Inventory account by $10,000 and increasing the Accounts Payable account by $10,000

Question 6

A company's treasury stock is outstanding but not issued.

Accepted Answer

A) True 
 B)False

Question 7

Shown as a separate asset on the balance sheet and it is carried indefinitely at its original cost

Accepted Answer

The answer of Shown as a separate asset on the...

Question 8

Given below is a list of events: 1. payment of employee wages
2) cash collections from customers
3) sale of capital stock
4) sale of land, at cost
5) payment of a cash dividend
6) borrow cash from creditors
7) purchase of equipment
8) cash sale of inventory
9) purchase inventory on account
Which of the above events are outflows in the investing section of the statement of cash flows?

Accepted Answer

A)  only 4 
B)  4, 7, and 9 
C)  4 and 9 
D)  only 7

Question 9

Deferred income tax is a noncurrent liability.

Accepted Answer

A) True 
 B)False

Question 10

The payments due within the next year on bonds and other long- term debt

Accepted Answer

The answer of The payments due within the next year...

Question 11

Beginning retained earnings was $34,400. Ending retained earnings was $61,600 and net income was $36,000. Cash paid as dividends was:

Accepted Answer

A)  $36,000 
B)  $8,800 
C)  $1,200 
D)  $30,000

Question 12

Accounts payable, wages payable, and income taxes payable are all considered to be current liabilities.

Accepted Answer

A) True 
 B)False

Question 13

Under the indirect method, cash received from customers is determined.

Accepted Answer

A) True 
 B)False

Question 14

The statement of cash flows classifies changes in cash as operating, investing, and financing activities.

Accepted Answer

A) True 
 B)False

Question 15

Treasury stock is:

Accepted Answer

A)  unissued shares of a corporation's own stock 
B)  shares of a corporation's stock which have been issued and subsequently repurchased by the corporation 
C)  shares of a corporation's stock held by the board of directors 
D)  ownership rights in other companies held by the corporation for investment purposes

Question 16

An inventory method that assumes a company sells or consumes the goods acquired most recently before any else

Accepted Answer

The answer of An inventory method that assumes a company...

Question 17

Inventory is considered to be a cash equivalent.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following does not correctly state the nature or purpose of par value?

Accepted Answer

A)  The term "stated value" is conceptually equivalent to par value. 
B)  Some states permit common stock to be issued without either a par or stated value. 
C)  Par value is a valuable tool used by both the shareholders and the corporation. 
D)  Par value is the minimum level of investment by owners required by law in some states.

Question 19

Which of the following events do not affect cash flows from operating activities? 1. cash sale
2) cash dividend paid
3) cash purchase of equipment
4) paid cash for inventory purchased in the previous period
5) paid cash for employees' wages

Accepted Answer

A)  2 and 3 
B)  only 2 
C)  2, 3, and 4 
D)  2 and 4

Question 20

Which of the following would be considered an intangible asset? 1. leasehold improvements
2) goodwill
3) land
4) mineral deposits
5) patent

Accepted Answer

A)  2, 3, 4, and 5 
B)  1, 3, and 4 
C)  2 and 4 
D)  2 and 5

Exam 16: Basic Accounting Concepts, Techniques, and Conventions

Treasury stock is a deduction from total stockholders' equity.

Sales less cost of goods sold

Provides debt holders with first claim on specified assets

Creditors cannot seek payment from shareholders as individuals if the corporation itself cannot pay its debt

The Beehive Company acquired merchandise inventory costing $10,000 on September 1. The company will not pay for the inventory until October 1. This transaction will affect the Beehive Company by:

A company's treasury stock is outstanding but not issued.

Shown as a separate asset on the balance sheet and it is carried indefinitely at its original cost

Deferred income tax is a noncurrent liability.

The payments due within the next year on bonds and other long- term debt

Beginning retained earnings was $34,400. Ending retained earnings was $61,600 and net income was $36,000. Cash paid as dividends was:

Accounts payable, wages payable, and income taxes payable are all considered to be current liabilities.

Under the indirect method, cash received from customers is determined.

The statement of cash flows classifies changes in cash as operating, investing, and financing activities.

Treasury stock is:

An inventory method that assumes a company sells or consumes the goods acquired most recently before any else

Inventory is considered to be a cash equivalent.

Which of the following does not correctly state the nature or purpose of par value?

Which of the following events do not affect cash flows from operating activities? 1. cash sale 2) cash dividend paid 3) cash purchase of equipment 4) paid cash for inventory purchased in the previous period 5) paid cash for employees' wages

Which of the following would be considered an intangible asset? 1. leasehold improvements 2) goodwill 3) land 4) mineral deposits 5) patent