Question 1

Centex,Inc.issued 50,000 shares of its $1 par value common stock for $20 per share.The journal entry to record the stock issue would include which of the following?

Accepted Answer

A)  A credit to cash for $1,000,000.
B)  A credit to additional paid-in capital for $1,000,000.
C)  A credit to additional paid-in capital for $50,000.
D)  A credit to common stock for $50,000.E) A) and B)
F) C) and D)

Question 2

Which of the following events will cause retained earnings to increase?

Accepted Answer

A)  Dividends declared by the Board of Directors.
B)  Net income reported for the period.
C)  Net loss reported for the period.
D)  Issuance of stock in exchange for cash.E) A) and D)
F) None of the above

Question 3

Which of the following statements about stockholders' equity is false?

Accepted Answer

A)  Stockholders' equity is the shareholders' residual interest in the company resulting from the difference in assets and liabilities.
B)  Stockholders' equity accounts are increased with credits.
C)  Stockholders' equity results only from contributions of the owners.
D)  The purchase of land for cash has no effect on stockholders' equity.E) None of the above
F) C) and D)

Question 4

Which of the following statements is true?

Accepted Answer

A)  Contributed capital is a noncurrent asset.
B)  Current liabilities are debts expected to be paid within the next year.
C)  Current assets are resources of a company that might include cash and copyrights.
D)  Patents,copyrights,and research and development expense are classified as intangible assets on the balance sheet.E) A) and B)
F) None of the above

Question 5

Which of the following would be classified as investing cash flows on a statement of cash flows? 
1.Acquiring a building by signing a long-term mortgage payable.
2.Lending cash to others.
3.Issuing stock for cash.
4.Purchasing long-term assets for cash.
5.Selling stock investments for cash.

Accepted Answer

A)  1,4,5.
B)  1,2,4.
C)  1,3,5.
D)  2,4,5.E) All of the above
F) B) and D)

Question 6

Which of the following would result when a company purchases a factory building using cash?

Accepted Answer

A)  A noncurrent asset and an investing cash flow are created.
B)  A noncurrent asset and a financing cash flow are created.
C)  A current asset and an investing cash flow are created.
D)  A current asset and a financing cash flow are created.E) None of the above
F) B) and D)

Question 7

A company's January 1,2019 balance sheet reported total assets of $120,000 and total liabilities of $40,000.During January 2019,the following transactions occurred: (A) the company issued stock and collected cash totaling $30,000; (B) the company paid an account payable of $6,000; (C) the company purchased supplies for $1,000 with cash; (D) the company purchased land for $60,000,paying $10,000 with cash and signing a note payable for the balance.What is total stockholders' equity after the transactions above?

Accepted Answer

A)  $30,000.
B)  $110,000.
C)  $80,000.
D)  $194,000.E) B) and C)
F) A) and C)

Question 8

Which of the following correctly describes retained earnings?

Accepted Answer

A)  It is the cumulative earnings of a company.
B)  It represents the investments by stockholders in a company.
C)  It equals total assets minus total liabilities.
D)  It is the cumulative earnings of a company less dividends declared.E) A) and B)
F) C) and D)

Question 9

Which of the following journal entries is correct when common stock is sold for cash at a price greater than par value?

Accepted Answer

A)   
B)   
C)   
D)   E) C) and D)
F) B) and D)

Question 10

Which of the following transactions will not change a company's total stockholders' equity?

Accepted Answer

A)  Reporting of net income.
B)  Issuing stock to stockholders in exchange for cash.
C)  The declaration of a cash dividend.
D)  The purchase of a factory building.E) A) and B)
F) A) and C)

Question 11

Common stock and additional-paid in capital represent the financing sources from shareholders.

Accepted Answer

A) True 
 B)False

Question 12

Current liabilities are defined as obligations to be paid within six months.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is being applied when,under certain conditions,the value recorded for an asset is adjusted to a different amount?

Accepted Answer

A)  Comparability
B)  Timeliness
C)  Mixed-attribute
D)  UnderstandabilityE) B) and D)
F) All of the above

Question 14

Superior has provided the following information for its recent year of operation: The common stock account balance at the beginning of the year was $20,000 and the year-end balance was $25,000.
The additional paid-in capital account balance increased $2,500 during the year.
The retained earnings balance at the beginning of the year was $75,000 and the year-end balance was $91,000.
Net income was $26,000.
-
How much were Superior's dividend declarations during its recent year of operation?

Accepted Answer

A)  $10,000.
B)  $42,000.
C)  $26,000.
D)  The dividend declarations cannot be determined from the information provided.E) None of the above
F) C) and D)

Question 15

A corporation has $80,000 in total assets,$36,000 in total liabilities,and a $12,000 credit balance in retained earnings.What is the balance in the contributed capital accounts?

Accepted Answer

A)  $56,000.
B)  $44,000.
C)  $48,000.
D)  $32,000.E) None of the above
F) A) and D)

Question 16

In what order would the following assets be listed on a balance sheet?

Accepted Answer

A)  Cash,Short-term Investments,Accounts Receivable,Inventory.
B)  Cash,Intangible Assets,Accounts Receivable,Property and Equipment.
C)  Cash,Accounts Receivable,Property and Equipment,Inventory.
D)  Cash,Inventory,Intangible Assets,Accounts Receivable.E) A) and B)
F) None of the above

Question 17

The trial balance is a listing of account balances that are found in the general ledger.

Accepted Answer

A) True 
 B)False

Question 18

Common stock and additional paid-in capital are both reported on the balance sheet as components of shareholders' equity.

Accepted Answer

A) True 
 B)False

Question 19

The current assets section of a balance sheet includes both inventory and prepaid expenses.

Accepted Answer

A) True 
 B)False

Question 20

Current assets include accounts receivable and prepaid expenses.

Accepted Answer

A) True 
 B)False

Exam 2: Investing and Financing Decisions and the Accounting System

Which of the following would result when a company purchases a factory building using cash?

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

Common stock and additional paid-in capital are both reported on the balance sheet as components of shareholders' equity.

Correct Answer
verified

Which of the following events will cause retained earnings to increase?

Correct Answer
verified

Current liabilities are defined as obligations to be paid within six months.

Correct Answer
verified

Centex,Inc.issued 50,000 shares of its $1 par value common stock for $20 per share.The journal entry to record the stock issue would include which of the following?

Correct Answer
verified

The current assets section of a balance sheet includes both inventory and prepaid expenses.

Correct Answer
verified

Current assets include accounts receivable and prepaid expenses.

Correct Answer
verified

Which of the following transactions will not change a company's total stockholders' equity?

Correct Answer
verified

Correct Answer
verified

Which of the following statements about stockholders' equity is false?

Correct Answer
verified

Which of the following journal entries is correct when common stock is sold for cash at a price greater than par value?

Correct Answer
verified

Common stock and additional-paid in capital represent the financing sources from shareholders.

Correct Answer
verified

The trial balance is a listing of account balances that are found in the general ledger.

Correct Answer
verified

A corporation has $80,000 in total assets,$36,000 in total liabilities,and a $12,000 credit balance in retained earnings.What is the balance in the contributed capital accounts?

Correct Answer
verified

Correct Answer
verified

Which of the following is being applied when,under certain conditions,the value recorded for an asset is adjusted to a different amount?

Correct Answer
verified

Which of the following would be classified as investing cash flows on a statement of cash flows? 1.Acquiring a building by signing a long-term mortgage payable. 2.Lending cash to others. 3.Issuing stock for cash. 4.Purchasing long-term assets for cash. 5.Selling stock investments for cash.

Correct Answer
verified

In what order would the following assets be listed on a balance sheet?

Correct Answer
verified

Which of the following correctly describes retained earnings?

Correct Answer
verified

Exam 2: Investing and Financing Decisions and the Accounting System

Which of the following would result when a company purchases a factory building using cash?

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Common stock and additional paid-in capital are both reported on the balance sheet as components of shareholders' equity.

Correct AnswerverifiedShow Answer

Which of the following events will cause retained earnings to increase?

Correct AnswerverifiedShow Answer

Current liabilities are defined as obligations to be paid within six months.

Correct AnswerverifiedShow Answer

Centex,Inc.issued 50,000 shares of its $1 par value common stock for $20 per share.The journal entry to record the stock issue would include which of the following?

Correct AnswerverifiedShow Answer

The current assets section of a balance sheet includes both inventory and prepaid expenses.

Correct AnswerverifiedShow Answer

Current assets include accounts receivable and prepaid expenses.

Correct AnswerverifiedShow Answer

Which of the following transactions will not change a company's total stockholders' equity?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements about stockholders' equity is false?

Correct AnswerverifiedShow Answer

Which of the following journal entries is correct when common stock is sold for cash at a price greater than par value?

Correct AnswerverifiedShow Answer

Common stock and additional-paid in capital represent the financing sources from shareholders.

Correct AnswerverifiedShow Answer

The trial balance is a listing of account balances that are found in the general ledger.

Correct AnswerverifiedShow Answer

A corporation has $80,000 in total assets,$36,000 in total liabilities,and a $12,000 credit balance in retained earnings.What is the balance in the contributed capital accounts?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is being applied when,under certain conditions,the value recorded for an asset is adjusted to a different amount?

Correct AnswerverifiedShow Answer

Which of the following would be classified as investing cash flows on a statement of cash flows? 1.Acquiring a building by signing a long-term mortgage payable. 2.Lending cash to others. 3.Issuing stock for cash. 4.Purchasing long-term assets for cash. 5.Selling stock investments for cash.

Correct AnswerverifiedShow Answer

In what order would the following assets be listed on a balance sheet?

Correct AnswerverifiedShow Answer

Which of the following correctly describes retained earnings?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified