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					1. In which section of the balance sheet would Treasury Stock be reported? a)fixed assets b)long-term
liabilities c)stockholders equity d)intangible assets


2. In which section of the financial statements would Paid-in Capital from Sale of Treasury Stock be
reported? a)other expense on income statement b)intangible asset on balance sheet c)stockholders
equity on balance sheet d)other income on income statement


3. All of the following are normally found in a corporation's stockholders' equity section except
a)common stock b)paid-in capital in excess of par c)dividends in arrears d)retained earnings


4. The entry to record the issuance of stock certificates for a common stock dividend that had been
declared would include a debit to a)common stock b)paid-in capital in excess of par-common stock
c)stock dividends distributable d)cash


5. Which of the following statements is not true about a 2-for-1 split? a) Par value per share is
reduced to half of what it was before the split. b) Total contributed capital increases. c) The market
price will probably decrease. d) A stockholder with ten shares before the split owns twenty shares
after the split.


6. When a stock dividend is declared, which of the following accounts is credited? a)common stock
b)dividend payable c)stock dividends distributable d)retained earnings


7. A bond indenture is a) a contract between the corporation issuing the bonds and the underwriters
selling the bonds b) the amount due at the maturity date of the bonds c) a contract between the
corporation issuing the bonds and the bond trustee, who is acting on behalf of the bondholders. d) the
amount for which the corporation can buy back the bonds prior to the maturity date


8. When the corporation issuing the bonds has the right to repurchase the bonds prior to the maturity
date for a specific price, the bonds are a)convertible bonds b)unsecured bonds c)debenture bonds
d)callable bonds


9. When the maturities of a bond issue are spread over several dates, the bonds are called a)serial
bonds b)bearer bonds c)debenture bonds d)term bonds


10. If the market rate of interest is 8%, the price of 6% bonds paying interest semiannually with a
face value of $100,000 will be a) Equal to $100,000 b) Greater than $100,000 c) Less than $100,000
d) Greater than or less than $100,000, depending on the maturity date of the bonds
11. The interest rate specified in the bond indenture is called the a)discount rate b)contract rate
c)market rate d)effective rate


12. The journal entry a company records for the issuance of bonds when the contract rate and the
market rate are the same is a) debit Bonds Payable, credit Cash b) debit Cash and Discount on Bonds
Payable, credit Bonds Payable c) debit Cash, credit Premium on Bonds Payable and Bonds Payable d)
debit Cash, credit Bonds Payable


13. If the market rate of interest is greater than the contractual rate of interest, bonds will sell a) at a
premium b)at face value c)at a discount d) only after the stated rate of interest is increased.


14. Cash paid to purchase long-term investments would be reported in the statement of cash flows in
a) the cash flows from operating activities section b) the cash flows from financing activities section c)
the cash flows from investing activities section d) a separate schedule


15. Which of the following is a noncash investing and financing activity? a) payment of a cash dividend
b) payment of a six-month note payable c) purchase of merchandise inventory on account d) issuance
of common stock to acquire land




16. Which of the following below increases cash? a) depreciation expense b) acquisition of treasury
stock c) borrowing money by issuing a six-month note d) the declaration of a cash dividend


17. Which one of the following below would not be classified as an operating activity? a) interest
expense b)income taxes c)payment of dividends d)selling expenses




18. Cash paid for equipment would be reported in the statement of cash flows in a) the cash flows
from operating activities section b) the cash flows from financing activities section c) the cash flows
from investing activities section d) a separate schedule


19. On the statement of cash flows, the cash flows from financing activities section would include a)
receipts from the sale of investments b) payments for the acquisition of investments c) receipts from a
note receivable d) receipts from the issuance of capital stock

				
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