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Accounts Final test

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Accounts Final test In the past period, customers paid for operas that were performed in the current period. The required adjusting entry recognizes the A. expense incurred, and records a liability for future payment B. portion earned as revenue, and reduces the balance of a liability account C. revenue earned but not yet received, and records a receivable D. portion of the asset consumed or expensed, and reduces the balance of an asset account 2. Which of the following most likely explains why a corporation’s stock trades at a very high price-earnings ratio? A. The corporation has several classes of stock outstanding B. The corporation is large with very low risk C. Investors expect the corporation to have higher earnings in the future D. The corporation has very little long-term debt. 3. A bond with a face value of $1,000 is quoted at 105-1/2. The bond is selling for A. $1105.50 B. $1,000.00 C. $1055.00 D. $1050.50 4. Liabilities are usually listed on the balance sheet A. in the order in which they were incurred. B. in the order of smallest to largest. C. in the order in which they are expected to be repaid. D. in alphabetical order 5. When a retailer purchases inventory under credit terms of 2/10, n/30, the retailer A. can deduct 2% from the invoice price by paying on the 10th day of the month following the month of the invoice. B. can deduct 2% from the invoice price by paying within 10 days of the invoice date C. can deduct 2% from the invoice price by paying within 30 days of the invoice date D. can deduct 10% from the invoice price by paying within 2 days of the invoice date. 6. Consider the following: 8% cumulative preferred stock, $100 par value, authorized 50,000 shares, issued 20,000 shares—–$2,000,000 Additional paid-in capital, preferred stock—$500,000 Common stock, $1 par value, authorized 10 million shares, issued 5 million shares—$5,000,000 Additional paid-in capital, common stock—$1,200,000Retained earnings—$3,200,000 Calculate the total paid-in capital of the corporation. A. $1,700,000 B. $11,900,000 cVC. $4,900,000 D. $8,700,000 7. Which of the following is NOT true about net income? A. Net income represents an increase in owners’ equity. B. The company can have a cash shortage and still have net income. C. Net income is an asset. D. Net income is the result of revenues exceeding expenses. 8. After closing entries are posted, which of these accounts will have a balance? A. Revenue B. Income Summary C. Salary Expense D. Retained Earnings 9. Which of the following is NOT a government agency? A. Security and Exchange Commission (SEC) B. General Accounting Office (GAO) C. Internal Revenue Service (IRS) D. American Accounting Association (AAA) 10. A company has 100,000 shares of $10 par value common shares outstanding. The company declares a 4-for1 stock split. As a result, which of the following will occur? A. Par value will become $40.00 and shares outstanding will be 25,000. B. Par value will become $2.50 and shares outstanding will not change. C. Par value will become $2.50 and shares outstanding will be 400,000. D. Par value will remain unchanged and shares outstanding will be 400,000. 11. Taxpayers can use a depreciation method that conforms to generally accepted accounting principles but is based on a declining-balance method. What is the name of this accelerated depreciation method? A. Asset Cost Recognition System B. Modified Accelerated Cost Recovery System C. Asset Cost Recovery Statement D. Accelerated Cost Recovery System 12. The bookkeeper recorded a payment by check for store supplies as $1,340.56. The bank recorded the check at its correct amount of $3,140.56. If no adjusting entries are made and the error is not detected through the bank reconciliation, which of the following will occur? A. The checking account might become overdrawn B. The checkbook Cash account will be understated C. The trial bala

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