If bonds are issued at a discount, it means that the:
A.
market interest rate is lower than the stated interest rate.
B.
market interest rate is higher than the stated interest rate.
C.
bond is convertible.
D.
financial strength of the issuer is weak.
Answer
market interest rate is higher than the stated interest rate.
Leno Company sells goods to the Fallon Company for $15,000. It offers credit terms of 5/10, n/30. If Fallon Company pays the invoice within the discount period, Leno Company will record a debit to Cash in the amount of:
A.$15,750.
B.$15,000.
C.$750.
D.$14,250.
Answer
D.$14,250.
Given the following data, what is cost of goods sold as determined by the FIFO method?
Sales 270
units
Beginning inventory 240
units at $5 per unit
Purchases 108
units at $10 per unit
Answer
1500
On October 1, 2018, Golde Company paid $17,400 for one year of insurance for the period, October 1, 2018 through September 30, 2019. Which of the following will be part of the adjusting entry on December 31, 2018?
A.
Debit Prepaid Insurance for $13,050
B.
Debit Insurance Expense for $13,050
C.
Debit Insurance Expense for $4,350
D.
Debit Prepaid Insurance for $ 4350
Answer
C.
Debit Insurance Expense for $4,350
On December 31, Sulfur Corporation has the following data available:
Net Income $170,000
Market price of one share of common stock $5
Preferred dividends 40,000
Weighted−average number of shares of common stock outstanding 40,000 shares
Total common stockholders' equity at the beginning of the year 440,000
Total common stockholders' equity at the end of the year 270,000
What is the earnings per share? (Round the final answer to two decimal places.)
A.3.25
B.2.59
C.2.09
D.0.48
Answer
3.25
On December 1, 2019, Carrie's Day Care receives $1,800 in advance for an agreement to care for Susan's children for the months of December, January, and February. Carrie's Day Care will make an adjusting entry on December 31, 2019 to:
A.
credit Revenue for $1,800.
B.debit Unearned Revenue for $600.
C.credit Prepaid Revenue for $1,200.
D.credit Revenue for $1,200.
Answer
B.debit Unearned Revenue for $600.
When evaluating the collectability of accounts receivable:
A.the direct write−off method uses the Allowance for Uncollectible Accounts to record bad debts.
B.
the allowance method uses estimates developed from the company's collection experience.
C.
the Allowance for Uncollectible Accounts is an operating expense in the selling, general and administrative category.
D.
the Uncollectible−Account Expense is a contra account.
Answer
B.
the allowance method uses estimates developed from the company's collection experience.
On a statement of cash flows, activities that affect long−term assets are classified as:
A.
investing activities.
B.
stockholders' equity activities.
C.
operating activities.
D.
financing activities.
Answer
A.
investing activities.
A $4,000, 9% bond is sold at 98. When the bond is issued, the Cash account will be increased by:
Answer
3920
Madison Bank lends Neenah Paper Company $90,000 on January 1, 2017. Neenah signs a $90,000, 11%, 6−month note. The journal entry made by Neenah on January 1, 2017 will debit:
A.
Cash for $90,000 and credit Notes Payable for $90,000.
B.
Cash for $80,100 and credit Note Payable for $80,100.
C.Interest Expense for $9,900 and credit Cash for $9,900.
D.Interest Expense for $9,900 and credit Interest Payable for $9,900.
Answer
Cash for $90,000 and credit Notes Payable for $90,000.
Andy Company had a cash balance on May 1 of $30,000. At the end of May, the cash balance has increased to $28,000. During the month of May, Andy received cash of $48,000 from various sources. Based on this information, cash payments for the month of May were:
A.$78,000.
B.$50,000.
C.$28,000.
D.$30,000.
Answer
B.$50,000.
On May 1, a business provided legal services to a client and billed the client $4,100. The client promised to pay the business in one month. Which journal entry should the business record on May 1?
A.Debit Accounts Receivable for $4,100 and credit Service Revenue for $4,100.
B.Debit Cash for $4,100 and credit Retained Earnings for $4,100.
C.Debit Cash for $4,100 and credit Service Revenue for $4,100.
D.Debit Accounts Payable for $4,100 and credit Service Revenue for $4,100.
Answer
Debit Accounts Receivable for $4,100 and credit Service Revenue for $4,100.
A.
market interest rate is lower than the stated interest rate.
B.
market interest rate is higher than the stated interest rate.
C.
bond is convertible.
D.
financial strength of the issuer is weak.
Answer
market interest rate is higher than the stated interest rate.
Leno Company sells goods to the Fallon Company for $15,000. It offers credit terms of 5/10, n/30. If Fallon Company pays the invoice within the discount period, Leno Company will record a debit to Cash in the amount of:
A.$15,750.
B.$15,000.
C.$750.
D.$14,250.
Answer
D.$14,250.
Given the following data, what is cost of goods sold as determined by the FIFO method?
Sales 270
units
Beginning inventory 240
units at $5 per unit
Purchases 108
units at $10 per unit
Answer
1500
On October 1, 2018, Golde Company paid $17,400 for one year of insurance for the period, October 1, 2018 through September 30, 2019. Which of the following will be part of the adjusting entry on December 31, 2018?
A.
Debit Prepaid Insurance for $13,050
B.
Debit Insurance Expense for $13,050
C.
Debit Insurance Expense for $4,350
D.
Debit Prepaid Insurance for $ 4350
Answer
C.
Debit Insurance Expense for $4,350
On December 31, Sulfur Corporation has the following data available:
Net Income $170,000
Market price of one share of common stock $5
Preferred dividends 40,000
Weighted−average number of shares of common stock outstanding 40,000 shares
Total common stockholders' equity at the beginning of the year 440,000
Total common stockholders' equity at the end of the year 270,000
What is the earnings per share? (Round the final answer to two decimal places.)
A.3.25
B.2.59
C.2.09
D.0.48
Answer
3.25
On December 1, 2019, Carrie's Day Care receives $1,800 in advance for an agreement to care for Susan's children for the months of December, January, and February. Carrie's Day Care will make an adjusting entry on December 31, 2019 to:
A.
credit Revenue for $1,800.
B.debit Unearned Revenue for $600.
C.credit Prepaid Revenue for $1,200.
D.credit Revenue for $1,200.
Answer
B.debit Unearned Revenue for $600.
When evaluating the collectability of accounts receivable:
A.the direct write−off method uses the Allowance for Uncollectible Accounts to record bad debts.
B.
the allowance method uses estimates developed from the company's collection experience.
C.
the Allowance for Uncollectible Accounts is an operating expense in the selling, general and administrative category.
D.
the Uncollectible−Account Expense is a contra account.
Answer
B.
the allowance method uses estimates developed from the company's collection experience.
On a statement of cash flows, activities that affect long−term assets are classified as:
A.
investing activities.
B.
stockholders' equity activities.
C.
operating activities.
D.
financing activities.
Answer
A.
investing activities.
A $4,000, 9% bond is sold at 98. When the bond is issued, the Cash account will be increased by:
Answer
3920
Madison Bank lends Neenah Paper Company $90,000 on January 1, 2017. Neenah signs a $90,000, 11%, 6−month note. The journal entry made by Neenah on January 1, 2017 will debit:
A.
Cash for $90,000 and credit Notes Payable for $90,000.
B.
Cash for $80,100 and credit Note Payable for $80,100.
C.Interest Expense for $9,900 and credit Cash for $9,900.
D.Interest Expense for $9,900 and credit Interest Payable for $9,900.
Answer
Cash for $90,000 and credit Notes Payable for $90,000.
Andy Company had a cash balance on May 1 of $30,000. At the end of May, the cash balance has increased to $28,000. During the month of May, Andy received cash of $48,000 from various sources. Based on this information, cash payments for the month of May were:
A.$78,000.
B.$50,000.
C.$28,000.
D.$30,000.
Answer
B.$50,000.
On May 1, a business provided legal services to a client and billed the client $4,100. The client promised to pay the business in one month. Which journal entry should the business record on May 1?
A.Debit Accounts Receivable for $4,100 and credit Service Revenue for $4,100.
B.Debit Cash for $4,100 and credit Retained Earnings for $4,100.
C.Debit Cash for $4,100 and credit Service Revenue for $4,100.
D.Debit Accounts Payable for $4,100 and credit Service Revenue for $4,100.
Answer
Debit Accounts Receivable for $4,100 and credit Service Revenue for $4,100.
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