T/F

Question 9

1.         

For a current liability to exist, the following two tests must be met. The liability must be due usually within a year and must be paid out of current assets.

Answer

[removed] True

[removed] False

Question 10

1.         

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

Answer

[removed] True

[removed] False

Question 11

1.         

The proceeds of a discounted note are equal to the face value of the note.

Answer

[removed] True

[removed] False

Question 12

1.         

The tax rates for withholding Social Security and Medicare vary by state.

Answer

[removed] True

[removed] False

Question 13

1.         

FICA tax becomes a liability to the federal government at the time an employee's payroll is prepared.

Answer

[removed] True

[removed] False

Question 14

1.         

A partnership is like a corporation in that it is a legal entity separate from its owners. 

Answer

[removed] True

[removed] False

Question 15

1.         

Each partner in a partnership has a separate capital and withdrawal account.

Answer

[removed] True

[removed] False

Question 16

1.         

Partner A devotes full time and Partner B devotes one-half time to their partnership. If the partnership agreement is silent concerning the division of net income, Partner A will receive a $20,000 share of a net income of $30,000.

Answer

[removed] True

[removed] False

Question 17

1.         

When a partner withdraws from the partnership, the partnership dissolves.

Answer

[removed] True

[removed] False

Question 18

1.         

When a new partner is admitted to a partnership, all partnership assets should be revised to reflect current prices.

Answer

[removed] True

[removed] False

Question 19

1.         

The partner capital accounts may change due to capital additions, net income, or withdrawals.

Answer

[removed] True

[removed] False

Question 20

1.         

The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by the stockholder.

Answer

[removed] True

[removed] False

Question 21

1.         

The balance in Retained Earnings at the end of the period is created by closing entries.

Answer

[removed] True

[removed] False

Question 22

1.         

When a corporation issues stock at a premium, it reports the premium as an other income item on the income statement.

Answer

[removed] True

[removed] False

Question 23

1.         

A large retained earnings account means that there is cash available to pay dividends.

Answer

[removed] True

[removed] False

Question 24

1.         

When the board of director's declares a cash dividend, this action causes the corporation to incur a liability to pay the amount of the dividend.

Answer

[removed] True

[removed] False

Question 25

1.         

Bonds of major corporations are traded on bond exchanges.

Answer

[removed] True

[removed] False

Question 26

1.         

If the bondholder has the right to exchange a bond for shares of common stock, the bond is called a convertible bond.

Answer

[removed] True

[removed] False

Question 27

1.         

The face value of a term bond is payable at a single specific date in the future.

Answer

[removed] True

[removed] False

Question 28

1.         

When a corporation issues bonds, it executes a contract with the bondholders, known as a bond debenture.

Answer

[removed] True

[removed] False

Question 29

1.         

The times interest earned ratio (also referred to as the number of times interest charges are earned) is calculated by dividing Bonds Payable by Interest Expense.

Answer

[removed] True

[removed] False

Question 31

1.         

Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the

Answer

Question 32

1.         

Taking a physical count of inventory

Answer

Question 33

1.         

Under the _________ inventory method, accounting records maintain a continuously updated inventory value.

Answer

Question 34

1.         

The method of computing inventory that uses records of the selling prices of the merchandise is called

Answer

Question 35

1.         

Expenditures that add to the usefulness of fixed assets for more than one accounting period are

Answer

Question 36

1.         

A capital expenditure results in a debit to

Answer

Question 37

1.         

All of the following below are needed for the calculation of straight-line depreciation except

Answer

Question 38

1.         

Payroll journal entries are made with data from the

Answer

Question 39

1.         

Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax forms?

Answer

Question 40

1.         

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

Answer

Question 41

1.         

A pension plan which promises employees a fixed annual pension benefit, based on years of service and compensation, is called a(n)

Answer

Question 42

1.         

The remaining cash of a partnership (after creditors have been paid) upon liquidation is divided among partners according to their

Answer

Question 43

1.         

Paul and Roger are partners who share income in the ratio of 3:2. Their capital balances are $90,000 and $130,000 respectively. Income Summary has a credit balance of $50,000. What is Roger’s capital balance after closing Income Summary to Capital?

Answer

Question 44

1.         

In which section of the financial statements would Paid-In Capital from Sale of Treasury Stock be reported?

Answer

Question 45

1.         

Which of the following is not classified as paid-in capital on the balance sheet?

Answer

Question 46

1.         

Significant changes to stockholders’ equity are reported in

Answer

Question 47

1.         

If $1,000,000 of 8% bonds are issued at 105, the amount of cash received from the sale is

Answer

Question 48

1.         

If bonds are issued at a discount, it means that the

Answer

Question 49

1.         

Sinking Fund Investments would be classified on the balance sheet as

Answer

Question 50

1.         

Sinking Fund Income is reported in the income statement as

Answer