Accounting Final
In preparing a statement of cash flows, a conversion of bonds into common stock will be reported in...
a separate schedule or note to the financial statements
Premium you ___________ to bonds payable, discount you __________.
add, subtract
What is generally not used in preparing a statement of cash flows?
adjusted trial balance
If an investor company buys stock in another company to hold for investment (representing less than 20% of the investee stock) and they do not plan to sell the stocks in the near future, that investment would be classified as an?
available-for-sale equity investment
Which of the following is not true of stock dividends? a) stock dividends have no effect on assets or liabilites b) stock dividends increase dividends payable and reduce cash c) stock dividends affect only stockholders equity accounts
b
Each of the following is a liquidity ratio except the a) acid-test ratio b) horizontal analysis c) debt to assets ratio d) inventory turnover
c
Of the following which is NOT a cash outflow from an investing activity? a) purchase of long-term investments b) loans made to another party c) purchase of treasury stock d) purchase of land
c
Which one of the following is NOT a characteristic generally evaluated in analyzing financial statements? a) liquidity b) Profitability c) marketability d) solvency
c
Which of the following will decrease the amount of Total stockholders' equity?
cash dividend
If a company has both inflow and outflow of cash related to property, plant, and equipment the....
cash inflow and cash outflow should be reported separately in the investing activities section.
In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is...
deducted from net income
What describes the financing activities as shown in the statement of cash flows?
includes transactions affecting the capitalization of the business
When equipment is sold for cash, the amount received is reflected as a cash...
inflow in the investing section
What occurs when a company records accrued interest expense on a note payable?
interest payable is credited
The formula for horizontal analysis of changes since the base period is the current year amount
minus the base year amount divided by the base year amount
The market rate on which cash payments to bondholders are based is:
stated rate
On July 1, 2012, Karp Company purchased corporate bonds with a face value of $10,000 as a trading investment. The bonds were a 10 year issue with stated rate of 2% and paid a semi-annual interest payment on June 30 and December 31 of each year. Karp purchased the bonds at a discount and paid $9,200. On December 31, Karp company received its first semi-annual interest payment. How much was the amount of the payment?
$100
Vision Company purchased treasury stock with a cost of $16,000 during 2017. During the year, the company paid dividends of $20,000 and issued bonds payable for proceeds of $860,000. Cash flows from financing activities for 2017 total:
$824,000
If bonds with a face value of $100,000 are sold at 88, the amount of cash proceeds is:
$88,000
Assume the following sales data for a company: 2016 $877,500 2015 $675,000 If 2015 is the base year, what is the percentage increase in sales from 2015 to 2016?
30%
Using the information from above, assume that on November 1, AmerChem paid out dividends of $0.45 per share. Which of the following describes the journal entry needed on the books of Argon Company to record the receipt of the dividends?
Debit cash, credit dividend revenue
A company originally issued 10,000 shares of $5 par value common stock at $7 per share. The board of directors declares a 10% stock dividend when the market price of the stock is $9 a share. Which of the following is included in the entry to record the stock dividend?
Retained earnings is debited for $9,000
On November 15, 2011 Beta Company purchased 500 shares of Aquarium Suppliers Corporation for a short term investment of $60 per share. (Aquarium suppliers has 1,000,000 shares of common stock issued and outstanding) At December 31,2011, the market value of Aquarium Suppliers was $52 per share. How would these facts be reflected on the financial statements of Beta Company?
The Income Statement would include the Unrealized holding loss
What occurs when a bond's stated interest rate is less than the market rate?
The bond will be issued at a discount
Which section from the statement of cash flows includes activities that affect net income on the income statement?
The operating section
Which of the following would be included in the entry to record a 2-for-1 stock split?
There is not journal entry to record a stock split
On May 1, 2017 Metro Company has bonds with the following balances: Bonds Payable = $50,000 credit Discount on Bonds Payable = $1,140 debit balance If Metro retires the bonds for $52,000, what will be the effect on the income statement?
There will be a loss on retirement of $3,140
What would be included in the entry to record the corporation's purchase of 10,000 shares of its common stock for $7.50 per share?
Treasury stock would be debited for $75,000
Vertical Analysis is also called
common size analysis
Creditor and stockholder transactions are considered _______________ activities.
financing
indicate where the issuance of common stock for cash would appear (if at all) on the indirect statement of cash flows
financing activities section
Free cash flow equals cash provided by
operations less capital expenditures and cash dividends
The Sunny Company sold equipment for cash . The income statement shows a loss on sale of $5,000. The net book value of the asset prior to sale was $24,000. What is the cash effect of the transaction?
positive cash flow of $19,000 in investing activities
A technique for evaluating financial statements that expresses the relationship among selected items of financial statement data is:
ratio analysis
What would describe operating income?
the income or loss generated from the normal operations of the business
Which section from the statement of cash flows includes activities that increase and decrease long-term assets?
the investing section
Why would companies not invest in securities of other companies?
to reduce administrative expenses
Argon Company has excess cash which it wishes to invest for about 6 months. On October 1, 2011, Argon purchases 1,000 shares of AmeriChem stock for $20 per share for cash. (AmeriChem has 800,000 shares of common stock outstanding.) How will this asset be reported on Argon's balance sheet?
under currents assets
