FK ACCT

Accumulated Depletion is a(n): A) contra-asset account. B) contra-revenue account. C) contra-liability account. D) expense account

A) contra-asset account.

The journal entry to record the sale of a bond at a discount will include a: A)debit to the discount on bonds payable account. B)credit to the discount on bonds payable account. C)debit to bonds payable. D)credit to cash.

A)debit to the discount on bonds payable account.

Unearned revenue is a type of current liability. A. True B. False

A. True

When a bond premium is amortized over time, the carrying value of the bonds decreases over time. A. True B. False

A. True

The time period for classifying a liability as current is one year or the operating cycle, whichever is A. longer. B. shorter. C. probable. D. possible

A. longer.

Treasury stock has a: A) debit balance, the same as other equity accounts. B) debit balance, the opposite of other equity accounts. C) credit balance, the same as other equity accounts. D) credit balance, the opposite of other equity account

B) debit balance, the opposite of other equity accounts.

The entry to record the declaration of a cash dividend includes a: A) debit to Retained Earnings and a credit to Dividends Payable B) debit to Dividends Payable and a credit to Cash C) debit to Retained Earnings and a credit to Cash D) debit to Cash and a credit to Dividends Payable

B) debit to Dividends Payable and a credit to Cash

The declaration of a cash dividend: A) reduces assets and increases liabilities B) increases liabilities and decreases stockholders' equity C) increases stockholders' equity and reduces liabilities D) increases liabilities and increases stockholders' equity

B) increases liabilities and decreases stockholders' equity

The journal entry to record accrued interest on a short-term note payable must include a debit to: A)Interest Expense and a credit to Notes Payable. B)Interest Expense and a credit to Interest Payable. C)Interest Payable and a credit to Interest Expense. D)Interest Payable and a credit to Notes Payable

B)Interest Expense and a credit to Interest Payable.

In calculating cash flows from operating activities using the indirect method, a loss on the sale of equipment will appear as a(n) A)subtraction from net income. B)addition to net income. C)addition to cash flow from investing activities. D)subtraction from cash flow from investing activities

B)addition to net income.

When inventory prices are falling, the LIFO costing method will generally result in a: A)lower gross profit than under FIFO. B)higher gross profit than under FIFO. C)lower inventory value than under FIFO. D)lower owners' equity balance than under FIFO

B)higher gross profit than under FIFO.

The carrying amount of bonds issued at a discount is calculated by: A)subtracting the sum of Discount on Bonds Payable and Interest Payable from Bonds Payable. B)subtracting Discount on Bonds Payable from Bonds Payable. C)subtracting Interest Expense from Bonds Payable. D)subtracting Interest Payable from Bonds Payable

B)subtracting Discount on Bonds Payable from Bonds Payable.

What is depreciation? A. A valuation approach B. A cost allocation method C. A cash accumulation approach D. An adjustment to market value over time

B. A cost allocation method

Which one of the following is not a typical current liability? A. Sales taxes payable B. Bonds payable C. Unearned revenue D. FICA taxes payable

B. Bonds payable

. Sales taxes are an expense to the retailer. A. True B. False

B. False

If the contractual rate of interest is lower than the market rate of interest, bonds will sell at a premium. A. True B. False

B. False

The journal entry to record accrued interest on a short-term note payable must include a: A) debit to Interest Payable and a credit to Interest Expense B) debit to Interest Expense and a credit to Notes Payable C) debit to Interest Expense and a credit to Interest Payable D) debit to Interest Payable and a credit to Notes Payable

C) debit to Interest Expense and a credit to Interest Payable

Bonds that the issuer may pay off at a prearranged price whenever the issuer chooses before the maturity date are: A)convertible bonds. B)debenture bonds. C)callable bonds. D)serial bond

C)callable bonds.

At the end of the year, a company makes a journal entry to accrue the interest expense on a short-term note payable. As a result of this transaction: A)current liabilities increase and current assets decrease. B)current liabilities increase and equity increases. C)current liabilities increase and equity decreases. D)current liabilities decrease and equity decreases

C)current liabilities increase and equity decreases.

Depreciation is: A)a process of valuation. B)the setting aside of cash to replace assets as they wear out. C)the allocation of a plant asset's cost to expense over its life. D)not calculated for assets that are appreciating in value

C)the allocation of a plant asset's cost to expense over its life.

Which of the following represents the maximum number of shares a corporation can issue? A. Outstanding shares B. Issued shares C. Authorized shares D. Treasury shares

C. Authorized shares

When a bond is sold at a premium, at what amount is it reported on the balance sheet? A. Premium value B. Interest value C. Carrying value D. Market value

C. Carrying value

When recording payroll, A. gross earnings are recorded as salaries and wages payable. B. net pay is recorded as salaries and wages expense. C. payroll deductions are recorded as liabilities. D. net pay is recorded as salaries and wages expense and payroll deductions are recorded as liabilities.

C. payroll deductions are recorded as liabilities.

Limited liability of a corporation means that: A) shareholders are not responsible for the decisions of management. B) the corporation is not required to earn net income. C) the corporation is not required to pay dividends. D) a shareholders' potential loss is limited to their investment in the corporation

D) a shareholders' potential loss is limited to their investment in the corporation

The amount of stockholders' equity that the corporation has earned through profitable operation of the business and has not given back to stockholders is: A) outstanding stock. B) legal capital. C) treasury stock. D) retained earnings

D) retained earnings

The depreciation process attempts to match the: A) salvage value of the asset and the future market value of the asset. B) book value and the current market value of the asset. C) cost of the asset and the cash required to replace the asset. D) revenues earned by the asset and the cost of the asset

D) revenues earned by the asset and the cost of the asset

To be classified as a current liability, how or when must a debt be expected to be paid? A. Out of existing current assets B. By creating other current liabilities C. Beyond one year D. Either out of existing current assets or by crediting other current liabilities

D. Either out of existing current assets or by crediting other current liabilities

Sales taxes recorded at the time the sale takes place as A. an expense. B. unearned revenue. C. a revenue. D. a liability.

D. a liability.