Acc 557 wk 7 : 15 m/c questions :
Week 7 Quiz Questions
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Multiple Choice Question 178 |
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To qualify as natural resources in the accounting sense, assets must be
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D |
physically extracted in operations. |
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Multiple Choice Question 122 |
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Sargent Corporation bought equipment on January 1, 2013. The equipment cost $180,000 and had an expected salvage value of $30,000. The life of the equipment was estimated to be 6 years. The book value of the equipment at the beginning of the third year using straight-line depreciation would be
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Multiple Choice Question 207 |
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Rooney Company incurred $420,000 of research and development cost in its laboratory to develop a patent granted on January 1, 2013. On July 31, 2013, Rooney paid $63,000 for legal fees in a successful defense of the patent. The total amount debited to Patents through July 31, 2013, should be:
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Multiple Choice Question 92 |
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Useful life is expressed in terms of use expected from the asset under the
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declining-balance method. |
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units-of-activity method. |
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Multiple Choice Question 114 |
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Moreno Company purchased equipment for $675,000 on January 1, 2012, and will use the double-declining-balance method of depreciation. It is estimated that the equipment will have a 3-year life and a $30,000 salvage value at the end of its useful life. The amount of depreciation expense recognized in the year 2014 will be
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Multiple Choice Question 158 |
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The book value of an asset will equal its fair market value at the date of sale if
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a gain on disposal is recorded. |
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the plant asset is fully depreciated. |
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no gain or loss on disposal is recorded. |
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a loss on disposal is recorded. |
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Multiple Choice Question 154 |
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If disposal of a plant asset occurs during the year, depreciation is
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not recorded if the asset is scrapped. |
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recorded for the fraction of the year to the date of the disposal. |
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recorded for the whole year. |
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not recorded for the year. |
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Multiple Choice Question 141 |
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A major disadvantage resulting from the use of bonds is that
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interest must be paid on a periodic basis. |
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bondholders have voting rights. |
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earnings per share may be lowered. |
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Multiple Choice Question 173 |
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A $600,000 bond was retired at 103 when the carrying value of the bond was $622,000. The entry to record the retirement would include a
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gain on bond redemption of $18,000. |
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gain on bond redemption of $4,000. |
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loss on bond redemption of $18,000. |
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loss on bond redemption of $12,000. |
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Multiple Choice Question 199 |
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The 2013 financial statements of Marker Co. contain the following selected data (in millions).
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Current Assets |
$75 |
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Total Assets |
140 |
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Current Liabilities |
40 |
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Total Liabilities |
95 |
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Cash |
8 |
The debt to total assets ratio is
On September 1, Joe’s Painting Service borrows $100,000 from National Bank on a 4-month, $100,000, 6% note. What entry must Joe’s Painting Service make on December 31 before financial statements are prepared?
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Interest Expense2,000 Notes Payable2,000
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Interest Expense2,000 Interest Payable2,000
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Interest Payable2,000 Interest Expense2,000
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Interest Expense6,000 Interest Payable6,000
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Multiple Choice Question 65 |
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The relationship of current assets to current liabilities is used in evaluating a company’s
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revenue-producing ability. |
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short-term debt paying ability. |
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Multiple Choice Question 160 |
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Each of the following accounts is reported as long-term liabilities except
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Discount on Bonds Payable. |
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Premium on Bonds Payable. |
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Multiple Choice Question 67 |
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In most companies, current liabilities are paid within
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the operating cycle through the creation of other current liabilities. |
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one year through the creation of other current liabilities. |
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one year or the operating cycle out of current assets. |
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the operating cycle out of current assets. |
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Multiple Choice Question 157 |
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Hernandez Corporation issues 3,000, 10-year, 8%, $1,000 bonds dated January 1, 2013, at 98. The journal entry to record the issuance will show a
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debit to Cash for $2,960,000. |
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debit to Cash of $3,000,000. |
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credit to Discount on Bonds Payable for $60,000. |
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credit to Bonds Payable for $3,040,000. |
