ACCTG 201 CH 10 and 11 Review

Question 1

If the market interest rate for a bond is lower than the stated interest rate, the bond will sell at:

Accepted Answer

a premium

Question 2

Who has main responsibility for the major policy-decisions of a corporation?

Accepted Answer

The Board of Directors

Question 3

How do you determine if a debt is current or long term?

Accepted Answer

current would be paid within 1 year or operating cycle whichever is longer

Question 4

Llama Co issued 5,000 shares of $2 par value common stock for $45,000. What is the result?

Accepted Answer

Common stock will be credited for $10,000

Question 5

Jojo had 6000 shares common stock outstanding before stock split & 24000 shares outstanding after split. Stock split was

Accepted Answer

4-for-1

Question 6

Preferred stockholders

Accepted Answer

have first claim to dividends declared

Question 7

Bank agrees to lend Mr. Potter a 3-month, 4%, $1,000 note on April 1. What journal entry does he make to record note?

Accepted Answer

Debit Cash 1,000; Credit N/P 1,000

Question 8

Bob signed a $720,000 mortgage to purchase a building. Monthly pymts of $6,500 & interest rate of 8%. Jan 1 JE includes?

Accepted Answer

Credit M/P for $720,000

Question 9

Jackson Co purchased 4,000 shares of its own previously issued $8 par common stock for $58,000. What is the result?

Accepted Answer

Jackson's total stockholders' equity decreased $58,000

Question 10

What might be considered a current liability?

Accepted Answer

Dividends payable

Question 11

Paws Co issued 500 shares no-par common stock for $5,500 with a stated value of $3 per share. You would:

Accepted Answer

Credit Paid in Capital in Excess of Stated Value $4,000

Question 12

Which of the following are ownership rights of stockholders of shares of a corporation?

Accepted Answer

All of the above

Question 13

Par value is the value

Accepted Answer

assigned per share in the charter

Question 14

Polar Express sells cheap tickets. $10,000 of tickets were sold Dec 1; students traveled by Dec 25. What is Dec 1st JE?

Accepted Answer

Debit Cash $10,000; Credit Unearned Revenue $10,000

Question 15

What effect do stock splits have on retained earnings?

Accepted Answer

no change

Question 16

An adjusting entry to record an accrued expense will often require adjusting a:

Accepted Answer

Liability account

Question 17

ABC Co's Sales Account totals $5,281.50 which includes sales and sales tax. Sales tax rate is 6.5%. What is sales tax?

Accepted Answer

$322.50

Question 18

What effect does cash dividend declared have on retained earnings?

Accepted Answer

decrease

Question 19

At Dec 31, J Co had $10 par CS of $90000 (auth 15000 shares); Treas stock $500 (cost $20/share). Shares of CS outstand?

Accepted Answer

8975

Questions 19