quiz chapter 5

current liabilities Câu hỏi 8 The cost of a product warranty should be included as an expense in the _____.. Cost of merchandise sold Câu hỏi 12 Which of the following accounts is report

Câu hỏi 1

_ liabilities may arise from past transactions if certain events occur in the future

Select one:

a Current

b Long-term

c Noncurrent

d Contingent

Câu hỏi 2

A company sold 200 shares of common stock with a par value of $5 at a price of $12 per share Which section of the statement of cash flows will contain this transaction?

Select one:

a Investing activities

b Operating activities

c Sale of stock will not appear on the statement of cash flows

d Financing activities

Câu hỏi 39

Contingent liabilities that are probable but cannot be reasonably estimated are disclosed in the _

Select one:

a current liabilities section of the balance sheet

b retained earnings section of the statement of stockholders' equity

c long term-liabilities section of the balance sheet

d notes to the financial statements

Câu hỏi 4

Current liabilities are _

Select one:

a due and payable within one year

b due but not receivable for more than one year

c due but not payable for more than one year

d due and receivable within one year

Câu hỏi 5

Emerald Co has 50,000 shares at $12 par common stock outstanding If the company decides to buy 20%

of its shares for $15 per share, the total stockholders' equity will _

Select one:

a increase by $750,000

b decrease by $150,000

c decrease by $120,000

d increase by $600,000

Câu hỏi 6

Glow Co reacquired 60,000 shares of its common stock at $25 per share The balance of the treasury stock account is reported on the balance sheet as a(n) _

Select one:

a increase in long-term liabilities

b reduction of fixed assets

c increase in current liabilities

d reduction of stockholders' equity

Câu hỏi 7

Liabilities due beyond one year are classified as _

Select one:

a contingent liabilities

b long-term liabilities

c fixed liabilities

d current liabilities

Câu hỏi 8

The cost of a product warranty should be included as an expense in the _

Select one:

a period the cash is collected for a product sold on account

b future period when the product is repaired or replaced

c future period when the cost of repairing the product is paid

d period of the sale of the product

Câu hỏi 9

The major subdivisions of the stockholders' equity section of the balance sheet are _

Select one:

a Issued capital and authorized capital

b Common stock and preferred stock

c Expenses and incomes

d Paid-in capital and retained earnings

Câu hỏi 10

Treasury stock is reported in the _ section of the balance sheet

Select one:

a contingent liabilities

b stockholders' equity

c investment

d current liabilities

Câu hỏi 11

Where is interest expense listed on the income statement?

Select one:

a Other expense section

b Operating expenses

c Interest expense is listed on the balance sheet, not the income statement

d Cost of merchandise sold

Câu hỏi 12

Which of the following accounts is reported in the noncurrent liabilities section of the corporate balance sheet?

Select one:

a Cash

b Bonds payable

c Common stock

d Dividends payable

Câu hỏi 13

Which of the following factors affects the accounting for contingent liabilities?

Select one:

a The likelihood of occurring and measurement

b Financial and economic conditions

c The coupon rate and market rate of interest

d Investor's expectations

Câu hỏi 14

Which of the following is a reason for a corporation to buy back its own stock?

Select one:

a To increase liquidity

b To increase solvency

c To increase the shares outstanding

d To reissue as bonuses to employees

Câu hỏi 15

Which of the following transactions decreases the profitability of a company?

Select one:

a Issuing a note payable

b Declaring cash dividend

c Recording payroll tax expense

d Purchasing treasury stock

Câu hỏi 16

Which of the following will be classified as a current liability?

Select one:

a Bonds payable

b Unearned rent

c Mortgage loan

d Two-year notes payable

Câu hỏi 17

Bonds payable due in the following year are reported on the balance sheet as long-term liabilities

Select one:

True

False

Câu hỏi 18

During the first year of operations, a company granted warranties on its products The estimated cost of the product warranty liability at the end of the year is $12,750 The product warranty expense of $12,750 should be recorded in the year the related product sale is made

Select one:

True

False

Câu hỏi 19

During the first year of operations, employees earned vacation pay of $50,000 The vacations will be taken during the second year The vacation pay expense should be recorded in the first year of operations

Select one:

True

False

Câu hỏi 20

Earnings per common share are one factor that influence the decision to use debt financing or equity financing

Select one:

True

False

Câu hỏi 21

For proper matching of revenues and expenses, the estimated cost of fringe benefits must be recognized

as an expense of the period during which the employee earns the benefits

Select one:

True

False

Câu hỏi 22

In order to record a contingent liability, the liability must be probable and reasonably estimated

Select one:

True

False

Câu hỏi 23

Liabilities that are due and payable beyond one year or paid out of noncurrent assets are termed long-term liabilities

Select one:

True

False

Câu hỏi 24

Obligations that depend on future events and are based on past transactions are contingent liabilities

Select one:

True

False

Câu hỏi 25

The issuance of common stock affects both paid-in capital and retained earnings

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Select one:

True

False

Câu hỏi 26

The main source of paid-in capital is from issuing stock

Select one:

True

False

Câu hỏi 27

The two main sources of stockholders' equity are investments contributed by stockholders and net income retained in the business

Select one:

True

False

Câu hỏi 28

Treasury stock is a contra-equity account

Select one:

True

False

Câu hỏi 29

Which of the following items should not appear in the Long-Term Liability section of the balance sheet?

Select one:

a Pension obligations

b Accrued income taxes

c Bonds payable

d Capital lease with a ten-year term

Câu hỏi 30

A current liability is a debt that is reasonably expected to be paid

Select one:

a out of cash currently on hand

b between 6 months and 18 months

c within one year

d out of currently recognized revenues

Câu hỏi 31

A pension plan that requires the employer to make annual pension contributions, with no promise to employees regarding future pension payments, is termed

Select one:

a unfunded

b defined contribution

c funded

d defined benefit

Câu hỏi 32

Blast sells portable CD players and each unit carries a one-year replacement warranty The cost of repair defects under the warranty is estimated at 10% of the sales price During May, Blast sells 650 portable CD players for $50 each For what amount in May would Blast debit Product Warranty Expense?

Select one:

a $1,300

b $650

c $3,250

d $1,625

Câu hỏi 33

Zennia Company provides its employees with varying amounts of vacation per year, depending on the length of employment The estimated amount of the current year’s vacation cost is $135,000 On

December 31, the end of the current year, the current month’s accrued vacation pay is

Select one:

a $135,000

b $0

c $11,250

d $67,500

Câu hỏi 34

Wright Company sells merchandise with a one-year warranty This year, sales consisted of 2,000 units It

is estimated that warranty repairs will average $15 per unit sold, and 30% of the repairs will be made this year and 70% next year In this year's income statement, Wright should show warranty expense of

Select one:

a $0

b $30,000

c $21,000

d $9,000

Câu hỏi 35

Amounts withheld from each employee for social security and Medicare vary by state

Select one:

True

False

Câu hỏi 36

During the first year of operations, a company granted warranties on its products at an estimated cost of

$8,500 The product warranty expense should be recorded in the years of the expenditures to repair the products covered by the warranty payments

Select one:

True

False

Câu hỏi 37

During the first year of operations, employees earned vacation pay of $35,000 The vacations will be taken during the second year The vacation pay expense should be recorded in the second year as the vacations are taken by the employees

Select one:

True

False

Câu hỏi 38

Interest expense is reported in the operating expense section of the income statement

Select one:

True

False

Câu hỏi 39

Medicare taxes are paid by both the employee and the employer

Select one:

True

False

Câu hỏi 40

Receiving payment prior to delivering goods or services causes a current liability to be incurred

Select one:

True

False