Accounting Final

Preferred stockholders generally have the same basic rights as common stockholders EXCEPT for:

-Higher Dividends -Payed First

Stockholders' equity consists of:

-Paid-in (or contributed) capital -Retained earnings

Which of the following would be considered a contingent liability?

-Pending Legal Action -Warranty Reserves

A journal entry for the sale of a $10 par-common stock for $18 per share would include a:

A credit to Paid-in Capital in Excess of Par-Common Stock

If the market rate of interest is greater than the bonds stated rate of interest, the bond will be issued at:

A discount

Comparative reports in which each item is expressed as a percentage of a base amount without dollar amounts are called:

Common-size staements

When an analyst compares a business with a similar business is is referred to as:

Competitors

An obligation dependent upon an event that has not yet occurred is an example of a _____.

Contingent Liability

Bonds that can be exchanged for stock are called:

Convertible Bonds

Which of the following are considered to be legal entities that exist separate and distinct from their owners?

Corporation

Which of the following business types dominates by the amount of business transacted?

Corporation

Budget Auto signed a $45,000 8% 30-year installment note on November 1, 2012. The note requires semiannual payments of $750 plus interest on May 1 and November 1 each year. How will Budget Auto classify this loan on its December 31, 2013 Balance sheet?

Current Portion of Long-term debt= $750 Long-Term Debt=$44,250

Operating cash flow affect:

Current assets and current liabilties

Which of the following dates do NOT require a journal entry?

Date of record

The entry to record Empire Machinery, Inc. selling 800 shares of $6 par common stock at $8 per share would be to:

Debit Cash $6400 Credit Common Stock $4800 Credit Paid-In Capital in excess par-common stock $1600

Stockholders will be issued ___ physically or electronically.

Dividends

Which of the following is NOT an advantage of a corporation?

Double Taxation

Which of the following is an advantage of a corporation?

Ease of funding

Which analysis deals with the percentage of changes in certain items over a period of years?

Trend Analysis

Bonds that are backed only by the credit of the issuing company are:

Unsecured Bonds

Debenture bonds are the same as:

Unsecured Bonds

At least one "class" of stock MUST have:

Voting rights

The purpose of the statement of cash flows is to show:

Why the cash amount changed from the beginning of the period to the end of the period.

States value is assigned:

by the directors

Which would be subtracted from net income in the operating section of an indirect cash flow statement?

An increase in inventory

The number of shares of stock that a corporation is given the right to sell is called:

Authorized Stock

Bonds that may be retired at a prearranged price are called:

Callable Bonds

The accuracy of the statement of cash flows can be verified by computing the change in the balance of the:

Cash and cash equivalent accounts

Which of the following is NOT a part of operating activities:

Cash dividends paid to stockholders

Liberty Auto reported Net Sales of $258,000, Cost of Goods Sold of $110,500, Operating Expenses of $62,400, and Income Tax Expense of 21,600. Liberty Autos net income percentage was:

Gross profit on Sales/Net Sales

A comparison of the amounts from the same item in the financial statement of two or more periods is called:

Horizontal Analysis

Transactions involving the purchase and sale of long-term assets, lending money and collecting the principal on loans are called:

Investing activities

Financing activities affect:

Long-term liabilities and equity accounts.

Bonds that mature all at the same time are called:

Term Bonds

For vertical analysis purposes, the base item on the income statement is:

On a balance sheet, a percentage of total assets, liabilities, or owner's equity is used

If a bonds stated rate of interest is equal to the marker rate of interest, the bond will be issued at:

Par

An example of a cash inflow from financing activities is:

Paying cash dividends

Stockholders receiving their proportionate share of any assets left after a company goes out of business is an example of which stockholder right?

Preemptive Rights

The amount that a borrower must pay back to the bondholders on the maturity date is the:

Principle

The basic unit of stock is called a(n):

Sare

A business wanting to incorporate must file articles of incorporation with the:

Secretary of State

Bonds that are backed by collateral are:

Secured Bonds

Which of the following is NOT a part of investing activities?

Selling goods and servies

Bonds from the same bond issue that mature at different times are called:

Serial Bonds

Stock that is held by s stockholder is called:

Share

Which of the following business types is largest by number?

Sole Proprietorship

The rate of interest that is printed on the bond is called the ___ rate of interest.

Stated.

The___ is the financial statement associated with the operating, investing and financing activities of a corporation.

Statement of cash flows

The cost of purchasing long-term assets such as buildings and land are:

Subtracted from investing activities