Partner A contributes equip. with a $15k FMV and an $11k value on his books. What is the JE?

Dr. Equipment $15k Cr. Capital, Partner A $15k

$95 bond with unamortized premium of $3; retired early for $90 cash. What's the JE?

Dr. Bond Pay $95 Dr. Bond Prem. $3 Cr. Cash $90 Cr. Gain $8

How will withdrawals effect a partner's capital account?

They will be a debit to decrease the capital account.

5%, 10 year bonds w/ par value of $500k issued; market rate is 5%; semiannual pmts; JE for pmt?

Dr. Bond Interest Exp $12.5k; Cr. Cash $12.5k

Which of the following would result in a cash flow?

The payment of previously accrued interest expense

Which of the following is true of general partnerships?

The partners are co-owners of the partnership property

When contributing assets or liabilities to a new partnership, at what value are they recorded?

Their current fair market value

If 75 shares of $50/sh par CS are issued in payment of legal fees for organizing a corporation...

Organizational Costs will be debited

How will income effect a partner's capital account?

It will be a credit to increase the capital account.

Which of the following would result in a cash inflow?

The reissuance of treasury stock

A decrease in prepaid expenses:

Is added to net income under operating activities

Which of the following is a correct calculation for a bond's Carrying Amount?

Bonds Payable - Unamortized Discount

The par value of common stock represents:

An arbitrary amount established in the articles of incorp.

When a bond sells at a discount:

The stated rate is below the market rate.

Decreases total Stockholders' Equity on the Balance Sheet

The entry to record the interest payment on bonds sold for less than their face value is:

Dr. Bond Interest Exp; Cr. Discount on Bonds Payable & Cash

PS NI = $140k; Sal Allow: $60k to A, $30k to B; Int Allow $20k to A, $10k to B; rest split equally.

Partner A's share of the income is $90k.

Equipment is sold for $10k in cash at a $3k loss:

The $3k loss is an addition to NI as an operating activity

What's the JE to record payment of an interest bearing note?

Dr. Note Payable & Interest Expense; Cr. Cash

A $1 million, 6% bond is issued for 97% for cash. The JE will include a:

Debit to Discount on Bonds Payable for $30k

A partnership liquidation occurs when:

The assets are sold, liabilities paid, and operations ended

$1k shares sold; $10/sh par value; $12/sh market rate; What's the JE?

Dr. Cash $12k Cr. Common Stock $10k Cr. PICEP $2k

What's the journal entry to allocate income to a partner?

Dr. Income Summary; Cr. Capital Account, [Partner Name]

Characteristics of corporations do not include:

Shareholders who are mutual agents

Keep total equity the same, but change RE, CS, & PICEP amts.

What's the year-end adjusting entry for a $5k, 6%, 120-day note issued on Dec 1st?

Dr. Interest Exp $25; Cr. Interest Payable $25

An increase in wages payable:

Is added to net income under operating activities

$6,000 weekly wages, FICA-SS & MR $222 & $88, What's the JE?

Dr. Wage Exp $6,000; Cr. FICA-SS Pay, FICA-MR Pay, Cash $5,690

Amortizing a bond premium:

Reduces the interest expense with each payment

The cost of a product warranty should be included as an expense when?

In the period of the sale of the product

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ACCT 1105 Final Exam Review

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Final Exam Review for ACCT 1105

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Questions 99

Answers

1
The JE to record the payment/issuance of a large stock dividend would include a credit to:
Common Stock
Cash
Common Stock Dividend Distributable
Paid-in Capital in Excess of Par
2
Partner A contributes equip. with a $15k FMV and an $11k value on his books. What is the JE?
Dr. Equipment $15k Cr. Capital, Partner A $15k
Dr. Equipment $11k Cr. Capital, Partner A $11k
Dr. Equip [Orig. Cost] Cr. Accum. Dep. [Orig. Cost -11]
Dr. Equip. $11 Dr. Loss $4 Cr. Capital, Partner A $15
3
$95 bond with unamortized premium of $3; retired early for $90 cash. What's the JE?
Dr. Cash $95 Dr. Premium $3 Cr. Bond Pay $90 Cr. Loss $8
Dr. Bond Pay $95 Dr. Bond Prem. $3 Cr. Cash $90 Cr. Gain $8
Dr. Bond Pay $95 Cr. Bond Prem. $3 Cr. Cash $90 Dr. Loss $2
Dr. Bond Pay $95 Cr. Bond Prem. $3 Cr. Cash $90 Dr. Gain $2
4
How will withdrawals effect a partner's capital account?
They will be a debit to decrease the capital account.
They will be a debit to increase the capital account.
They will be a credit to increase the capital account.
They will be a credit to decrease the capital account.
5
5%, 10 year bonds w/ par value of $500k issued; market rate is 5%; semiannual pmts; JE for pmt?
Dr. Bond Interest Exp $25k; Cr. Cash $25k
Dr. Bond Interest Exp $12.5k; Cr. Bond Interest Pay $12.5k
Dr. Bond Interest Exp $12.5k; Cr. Cash $12.5k
Dr. Bond Interest Exp $25k; Cr. Bond Interest Pay $25k
6
Which of the following would result in a cash flow?
The expiration of prepaid insurance
The declaration of a cash dividend
The payment of previously accrued interest expense
The write off of an accounts receivable
7
On the SCF, activities related to the acquisition and retirement of assets are:
Financing Activities
Direct Activities
Investing Activities
Operating activities
8
Which of the following is true of general partnerships?
The partnership has an unlimited life
The partners have limited liability
The partnership itself is subject to the federal income tax
The partners are co-owners of the partnership property
9
20k shares of CS issued; 4k reacquired as TS; 2.5k shares of TS resold; What is the # of CS outstanding?
$16k
$18.5k
$17.5k
$13.5k
10
When contributing assets or liabilities to a new partnership, at what value are they recorded?
Book value from the contributing partner's books
Value as assessed for taxes
Their current fair market value
11
If 75 shares of $50/sh par CS are issued in payment of legal fees for organizing a corporation...
Common Stock will be debited
Legal Fees will be debited
Retained Earnings will be debited
Organizational Costs will be debited
12
How will income effect a partner's capital account?
It will be a debit to increase the capital account.
It will be a debit to decrease the capital account.
It will be a credit to increase the capital account.
It will be a credit to decrease the capital account.
13
Based on the info below, what is the Operating Cash Flows?
$202
$190
$184
$186
14
Which of the following would result in a cash inflow?
An increase in accounts receivable
The reissuance of treasury stock
The payment of cash dividends
The purchase of treasury stock
15
Goodwill is an example of:
A current asset
A plant asset
A fixed asset
An intangible asset
16
A decrease in prepaid expenses:
Is added to net income under operating activities
Is deducted from net income under operating activities
Has no impact on operating activities
17
Current liabilities are:
Due, but not receivable for more than 1 year
Due, but not payable for more than one year
Due & payable within 1 year
Due & receivable within 1 year
18
Which of the following is a correct calculation for a bond's Carrying Amount?
Bonds Payable - Unamortized Discount
Bonds Payable - Unamortized Premium
Bonds Payable - Amortized Discount
Bonds Payable + Unamortized Discount
19
What is the contract that identifies the rights and obligations of bond issuers and holders?
Mortgages
Bond indenture
Installment Notes
Debenture
20
Equipment cost $50k, residual vaue $4k, 8 year useful life; What is accumulated dep'n after year 5
$21,250
$28,750
$18,750
$31,250
21
The par value of common stock represents:
The amount of dividends that may be paid on each share
An arbitrary amount established in the articles of incorp.
The minimum amount a shareholder receives at liquidation
The minimum selling price of stock
22
When a bond sells at a discount:
The stated rate is above the market rate.
Stated rate is equal to the market rate.
The bond pays no interest.
The stated rate is below the market rate.
23
Treasury stock:
Decreases total Stockholders' Equity on the Balance Sheet
Increases total Stockholders' Equity on the BS
Increases total Assets on the Balance Sheet
Has no impact whatsoever on the Balance Sheet
24
The entry to record the interest payment on bonds sold for less than their face value is:
Dr. Bond Interest Exp; Cr. Discount on Bonds Payable & Cash
Dr. Bond Interest Exp & Discount on Bonds Pay; Cr. Cash
Dr. Bond Interest Exp; Cr. Premium on Bonds Pay & Cash
Dr. Bond Interest Exp & Premium on Bonds Pay; Cr. Cash
25
PS NI = $140k; Sal Allow: $60k to A, $30k to B; Int Allow $20k to A, $10k to B; rest split equally.
Partner A's share of the Income is $60k.
Partner A's Share of the income is $45k.
Partner A's share of the income is $80k.
Partner A's share of the income is $90k.
26
Contingent liabilities must be recorded if:
A & B
C) The future event is remote
B) The amount can be reasonably estimated
A) The future event is probable
27
Equipment cost $50k; residual value $5k; 15k machine hrs; 1,300 hrs used; What is UOP dep'n?
4,500
3,900
4,333
4,767
28
Declaration & payment of cash dividends
Decreases assets and equity
Increases assets & equity
Decreases liabilities & equity
Increases assets & decreases equity
29
How long a company holds inventory before selling it can be measured by the:
Inventory Turnover
Days sales uncollected
Price earnings ratio
Accounts Receivable Turnover
30
Equipment is sold for $10k in cash at a $3k loss:
The $10k cash is an investing activity outflow
The $3k loss is a deduction from NI as a operating activity
The $3k loss is an addition to NI as an operating activity
The $10k cash is an operating activity inflow
31
What's the JE for a stock split?
No Entry
Dr. CS Dividend Distributable; Cr. Common Stock
Dr. Retained Earnings/Cr. CS Dividend Distributable
Dr. Retained Earnings; Cr. Common Stock
32
Machine cost $9,400; transportation 800; installation 500; repair parts 200: Recorded cost?
$10,700
$10,500
$10,900
$10,200
33
What's the JE to record payment of an interest bearing note?
Dr. Note Payable & Interest Expense; Cr. Cash
Dr. Cash; Cr Note Payable
Dr. Cash; Cr. Note Payable & Interest Expense
Dr. Cash; Cr. Notes Receivable & Interest Revenue
34
A $1 million, 6% bond is issued for 97% for cash. The JE will include a:
Debit to Premium on Bonds Payable for $30k
Debit to Discount on Bonds Payable for $30k
Credit to Discount on Bonds Payable for $30k
A Credit to Premium on Bonds Payable for $30k
35
A partnership liquidation occurs when:
The assets are sold, liabilities paid, and operations ended
A partner dies
A new partner is admitted
One partner's ownership interest is sold
36
$1k shares sold; $10/sh par value; $12/sh market rate; What's the JE?
Dr. Cash $12k Cr. Common Stock $10k Cr. PICEP $2k
Dr. Cash $12k Cr. Common Stock $2k Cr. PICEP-CS $10k
Dr. Cash $12k Cr. Common Stock $12k
Dr. Cash $10k Cr. Common Stock $10k
37
What's the journal entry to allocate income to a partner?
Dr. Capital Account, [Partner Name], Cr. Income Summary
Dr. Retained Earnings; Cr. Income Summary
Dr. Income Summary; Cr. Capital Account, [Partner Name]
Dr. Capital Account [Partner Name]; Cr. Retained Earnings
38
Sales tax payable is what type of liability?
Contingent
Long-term
Current
Estimated
39
A company issued 40 shares of $50 par value CS for $3,000. The total paid-in capital is:
$3,000
$1,500
$2,000
$1,000
40
When cash dividends are declared, what account is debited?
Retained Earnings
Common Stock Dividends Payable
Cash
Common Stock Dividends Distributable
41
Characteristics of corporations do not include:
The ability to own property
Shareholders having limited liability
Corporate earnings being taxed multiple times
Shareholders who are mutual agents
42
Stock dividends:
Increase RE, CS, & PICEP
Are declared based on a vote of the stockholders
Keep total equity the same, but change RE, CS, & PICEP amts.
Reduces the total Stockholder's Equity
43
What's the year-end adjusting entry for a $5k, 6%, 120-day note issued on Dec 1st?
Dr. Interest Exp $25; Cr. Interest Payable $25
Dr. Cash $5,000; Cr. Note Pay $5,000
Dr. Interest Exp $75; Cr. Interest Payable $75
Dr Note Pay $5,000; Int Exp $50; Int Pay $25; Cr. Cash $5,075
44
5yr $1M Bonds w/ semiannual payments. Contract rate = 5%; Market rate = 6%. What is the issue price for these bonds?
$977,093
$1,001,110
$806,943
$957,355
45
An increase in wages payable:
Has no impact on operating activities
Is added to net income under operating activities
Is deducted from net income under operating activities
46
$6,000 weekly wages, FICA-SS & MR $222 & $88, What's the JE?
Dr. Wage Exp $6,000; Cr. Payroll tax exp, Wages Pay $5,690
Dr. Wage Exp $5,690k; Cr. FICA-SS Pay, FICA-MR Pay, Cash $6k
Dr. Wage Exp $5,690, Payroll tax exp; Cr. Wages Pay $6k
Dr. Wage Exp $6,000; Cr. FICA-SS Pay, FICA-MR Pay, Cash $5,690
47
Amortizing a bond premium:
Decreases the cash flow from the bond
Increases the interest expense with each payment
Decreases the bonds payable account
Reduces the interest expense with each payment
48
Which of the following would be classified as a long-term liability?
Notes Payable due within 1 year
30-year mortgage payable
Unearned rent revenue
Accounts Payable
49
5yr $1M Bonds w/ semiannual payments. Contract rate = 8%; Market rate = 7%. What is the issue price for these bonds?
$999,972
$1,022,880
$1,042,724
$1,000,036
50
Equipment cost $50k, residual value $4k, 8 year useful life; What is annual depreciation?
$6,250
$6,000
$5,500
$5,750
51
The cost of a product warranty should be included as an expense when?
The period the cash is collected
The future period when the repair is made
In the period of the sale of the product
The future period with the cost of the repair is made
52
Cash flow from issuing notes or bonds payable is a(n):
Investing Activity
Financing Activity
Operating Activity
53
What is the JE to record depreciation expense
Dr. Depreciation Exp; Cr. Accumulated Depreciation
Dr. Depreciation Expense; Cr. Cash
Dr. Accumulated Depreciation; Cr. Depreciation Exp
Dr. Depreciation Exp; Cr. Asset
54
The Board of Directors of a corporation:
Are appointed by the executive officers.
Cannot also serve as executive officers.
Hold the overall responsibility of managing the corporation.
Are responsible for the daily operations of the corp.
55
Discount on Bonds Payable is what type of account?
Equity
Asset
Contra liability
Liability
56
Treasury stock is classified as a(n):
Contra asset account
Liability account
Contra equity account
Equity account
57
Cash flow from payment of dividends is a(n):
Operating Activity
Investing Activity
Financing Activity
58
A, B, & C have $40, 25, & 15 in their capital accts. NL $21 & C withdrawals. C gets how much?
15
18
33
8
59
What bonds may be retired sooner than the maturity date at the issuer's discretion?
Serial Bonds
Callable bonds
Sinking Fund Bonds
Convertible Bonds
60
Patent cost $300k; legal life 5 years; Useful life 4 years; what's the annual amortization JE?
Dr. Amortization Exp $60k; Cr. Accum Amort $60k
Dr. Amortization Exp $75k; Cr. Accum Dep'n $75k
Dr. Amortization Exp $75k; Cr. Patent $75k
Dr. Accum Amort $75k; Cr. Amort Exp $75k
61
Based on the info below, what is Days Sales in Inventory?
25.74
32.38
41.21
33.95
62
Car cost: $15k, Scrap value $3k; Useful life: 4 years. What is NBV after Y2?
$6,000
$7,000
$9,000
$10,000
63
Based on the info below, what is AR Turnover?
13.86
7.72
15.56
8.67
64
A decrease in income taxes payable:
Is added to net income under operating activities
Is deducted from net income under operating activities
Has no impact on operating activities
65
On the SCF, activities involving merchandise purchases & sales and related expenses are:
Direct Activities
Financing Activities
Investing Activities
Operating activities
66
Which of the following would be deducted from NI when making the operating section of a SCF?
Depreciation expense
Loss on disposal of equipment
Amortization expense
Gain on disposal of equipment
67
Based on the information below, how much dividends were paid in cash?
$50
$10
$60
$59
68
A corp. w/ 100k shares of $50 par CS issues a 4 for 1 stock split. New par value of CS?
$12.50
$100
$50
$25
69
On which date does a liability for a dividend exist?
Date of payment
Date of declaration
Date of record
Date of revision
70
Based on the information below, what is the financing cash flow?
Cash inflow of $118
Cash inflow of $144
Cash inflow of $129
Cash inflow of $170
71
How much cash was paid for dividends?
$23
$39
$9
$3
72
Which of the following is not an advantage of bonds over common stock?
Bonds can reduce tax liabilities.
Bonds have voting rights.
Income to common shareholders may increase.
Bonds can increase earnings per share.
73
An increase in accounts receivable:
Has no impact on operating activities
Is deducted from net income under operating activities
Is added to net income under operating activities
74
A & B have $40 & $20 PS capital acct balances. C buys 1/2 of A's PS interest for $25. The JE?
Dr. Capital A $20; Cr. Capital C $20
Dr. Capital A $25; Cr. Capital C $20 & Bonus to A $5
Dr. Capital A $25; Cr. Capital C $25
Dr. Capital A $10; Cr. Capital C $10
75
What is the interest on an $80k, 8%, 90-day note payable?
1,750
6,400
1,600
1,400
76
Partners A, B, & C have $30k, 20k, & 15k in their capital accounts. If D buys B's share for $25k:
The JE is Dr. Capital, B $25k/Cr. Capital D $20k, Cr. RE $5k
The JE is Dr. Capital, B $25k/Cr. Capital, D $25k
The JE is Dr. Capital, B $20k/Cr. Capital, D $20k
JE is Dr. Cap, B $20k; Cap, A $2.5k, Cap, B $2.5k, Cr. Cap, D $25k
77
What's the JE for covering an account payable with a note payable?
Dr. Account Payable; Cr. Note Payable
Dr. Cash; Cr. Notes Payable
Dr. Note Payable; Cr. Account Payable
Dr. Cash; Cr. Account Payable
78
A sanding machine used by a carpentry business is what?
A current asset
A liability
An intangible asset
A plant asset
79
How will contributions effect a partner's capital account?
They will be a debit to increase the capital account.
They will be a debit to decrease the capital account.
They will be a credit to decrease the capital account.
They will be a credit to increase the capital account.
80
3k shares of $2/sh par value CS are issued for land valued at $9k:
Common Stock will be credited for $9k
Common Stock will be debited for $6k
Land will be debited for $6k
Paid-in capital in excess of par will be credited for $3k
81
5 million tons of ore are acquired for $12 million. If 275,000 tons are mined, what is the JE?
Dr. Accumulated Depletion $660k; Cr. Depletion Exp $660k
Dr. Accumulated Depletion $115k; Cr. Depletion Exp $115k
Dr. Depletion Exp $660k; Cr. Accumulated Depletion $660k
Dr. Depletion Exp $115k; Cr. Accumulated Depletion $115k
82
Which of the following is not a source of paid-in capital?
Common Stock
Preferred Stock
All are examples of paid-in capital
Paid-in capital from sale of Treasury Stock
83
In the absence of an agreement, how is income or loss distributed among the partners?
Equally
In the same ratio as salary allowances
The ratio of initial capital investments
In the same ratio as interest allowances
84
PS NI = $110k; Sal Allow: $40k to A, $25k to B; Int Allow $30k to A, $20k to B; rest split equally.
Partner B's share of the income is $42.5k
Partner B's share of the income is $25k
Partner B's share of the income is $45k
Partner B's share of the income is $55k
85
Equipment cost $50k, residual value $4k, 8 year useful life; What is NBV after year 3?
$18,750
$17,250
$31,250
$32,750
86
5k, 6%, $100 shares of PS; 12k shares of CS; $40k of Dividends declared; What is the PS div?
$10k
$40k
$25k
$30k
87
Who has ultimate control over a corporation?
The Executive Management
The stockholders
The employees
The Board of Directors
88
A new partner contributes AR of $15,000; $1,000 of AR is worthless, and a new AfDA of 500 is est.
Dr. AR $14,000; Cr. AfDA 500 & Capital $13,500
Dr. AR $14,500k; Cr AfDA $1k & Capital $13,500
Dr. AR $13,500; Cr. Capital $13,500
Dr. AR $15,000; Cr AfDA $1,500 & Capital $13,500
89
7.5k, 6%, $100 shares of PS; 15k shares of CS; $60k of Dividends declared; What is is Div Per Share of CS?
$2.5/share of CS
$4/share CS
$3/share of CS
$1/share CS
90
A corp. w/ 100k shares of $50/sh par CS issues a 4 for 1 stock split. # of shares outstanding?
400
100
25
200
91
The stockholders' equity section on the balance sheets consists of:
Paid-in capital & retained earnings
Premiums & discounts on bonds payable
Paid-in capital and par value
Retained earnings & cash
92
Based on the info below, what is Dividends per Share of CS?
$0.80
$1.70
$1.55
$0.90
93
When a company sales equipment at a price > its book value, which of the following is booked?
Dr. Loss
Dr. Gain
Cr. Gain
Cr. Loss
94
The # of shares a corporation may sell according to its charter is referred to as:
Preferred Stock
Outstanding Stock
Authorized stock
Issued Stock
95
Why wouldn't a corporation buy back its own stock?
Maintain market value for company stock
Allow management to assume voting rights
Avoid a hostile take-over
Have shares available for employee compensation
96
Comparative financial statements in which each amount is expressed as a % of a base amount:
Is called percentage comparative statements
Is called common-size comparative statements
Is called general-purpose financial statements
Is called asset comparative statements
97
Mutual agency means:
The partnership has a limited life.
Partners are taxed on partnership withdrawals.
All partners must agree before the partnership can act.
A partner can bind the partnership into business contracts.
98
How will losses effect a partner's capital account?
They will be a debit to decrease the capital account.
They will be a credit to decrease the capital account.
They will be a debit to increase the capital account.
They will be a credit to increase the capital account.
99
Net Pay is:
Used in determining gross pay
Deductions withheld by the employer
Total compesation earned before any deductions
Total compensation earned less any deductions

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