chap 4,10 bonus quiz acct

Common stock usually has all of the following features except

a.the conversion privilege.

A company's control environment is primarily influenced by all of the following except

a.the experiential background of internal auditors.

Which of the following is not included in Cash and Cash Equivalents on a company's balance sheet?

d.a bank certificate of deposit for 1 year

Common Stock, $7 par, 200,000 shares authorized $700,000 Additional Paid-In Capital—Common Stock 160,000 Retained Earnings ?? Treasury Stock, 2,000 shares at cost 15,000 Total Stockholders' Equity $975,000 What is the amount of retained earnings?

$130,000

7% Cumulative, Nonparticipating Preferred Stock, $100 par, 500 shares authorized, issued, and outstanding, callable at par value $50,000 Common Stock, $12 par, 100,000 shares authorized 600,000 Additional Paid-In Capital-Common Stock 25,000 Retained Earnings 825,000 The company's total capital stock is

$675,000.

Company's balance according to the general ledger $15,000 Outstanding checks 2,500 Bank service charge 15 A customer's NSF check returned by the bank 100 What is the company's adjusted cash balance at April 30?

14,885

On January 1, 2020, a company issued 10,000 shares of 10%, $10 par value cumulative preferred stock. No dividends were declared in 2020 or 2021. In 2022, the company declared a dividend of $200,000. How much of the 2022 dividend should be paid to common stockholders?

170,000

Bank statement balance $5,000 Unadjusted cash balance from the company records ? Deposit in transit 1,000 Outstanding checks 500 Bank service charges 50 Interest earned on the bank account 10 Customer's NSF check returned by the bank 25 In addition, a check issued was recorded in the accounting records as $1,200 but the correct amount as recorded by the bank was only $1,000. What is the company's adjusted cash balance at May 31?

5,500

A customer's check for $25 that had been deposited into the company's checking account the previous month was returned stamped 'NSF' by the bank. Which of the following journal entries is required in the company's books?

Account Receivable 25 Cash 25

Suppose a corporation issues 5,000 shares of $1 par common stock for $30 per share. In addition to the increase in cash, what effect does this transaction have on the accounting equation?

Additional paid-in capital-common stock increases by $145,000.

Common Stock, $5 par, 100,000 shares issued and outstanding $500,000 Additional Paid-In Capital-Common Stock 100,000 Retained Earnings 725,000 Total Stockholders' Equity $1,325,000 A 10% stock dividend was declared and paid when the market price per share was $12. Immediately after the stock dividend, the components of stockholders' equity section were:

CS- $550,000, cap-cs $170,000, RE-$605,000

Which of the following statements is false regarding the issuance of stock versus bonds to raise capital for a corporation?

The declaration of dividends reduces the amount of the corporation's taxable income.

Which of the following statements best describes the term "outstanding check" from a company's point of view?

a.A check written by the company but not yet presented to the bank for payment

Assume that all of the 20,000 shares of stock that were issued as of December 31, prior year, were issued for $42 per share. On March 1, current year, the company reacquired 4,000 shares of its common stock for $50 per share. Suppose the company reissued 1,000 shares of its treasury stock on June 1, current year, for $44 each. Which of the following is true regarding the entry required to record this transaction?

a.A credit to treasury stock is required for $50,000.

Par value represents the

a.arbitrary amount that establishes a minimum price for the stock when it is first issued.

Lanthier's Heating & Air company began business on June 1. The articles of incorporation authorize issuance of 10,000 shares of $2 par common stock and 5,000 shares of $8 par, 6% cumulative preferred stock. On June 5, the company issued 2,400 shares of common stock for $20 per share. What effect does the entry to record the stock issuance have on total stockholders' equity?

a.increase of $48,000

Which of the following is an example of a credit memo?

a.notice of interest earned on a checking account

Once the bank reconciliation is completed, an adjusting entry in the company's books needs to be made for each of the following items except _____.

a.outstanding checks

How are cash equivalents reported or disclosed in financial statements?

b.They are included with cash as a current asset on the balance sheet.

Which of the following is true for a corporation that issues 1,000 shares of $2 par common stock at $5 per share?

b.Total stockholders' equity will increase by $5,000.

Lasik Vision, Inc. began business on June 1, prior year. The corporate charter authorized issuance of 1,000 shares of no-par common stock and 4,000 shares of $6 par, 6% cumulative preferred stock. As of the beginning of the current year, 200 shares of common stock had been issued and none of the preferred stock had been issued. If the company issues 400 shares of common stock on March 1, current year, for $10 per share, the journal entry would include a

c.$4,000 credit to common stock.

Error corrections that involve restatement of prior period income must be reported

c.as a prior period adjustment on the statement of changes in retained earnings.

Which of the following is a reconciling item on the bank side of a bank reconciliation?

c.outstanding checks only

Bank statement balance $29,600 Unadjusted cash balance according to company records ? Deposit in transit 2,200 Outstanding checks 3,100 Bank service charges 200 Interest earned on the bank account 100 Customer's NSF check returned by the bank 300 What is the company's adjusted cash balance at March 31?

d.$28,700

Which of the following statements is true pertaining to participating preferred stock?

d.It includes the right to share in dividends in excess of the regular annual dividend.

Allowing only certain employees to order goods and services on behalf of the company is an example of what internal control activity?

d.clearly defined authority and responsibility

Which of the following is not a generally recognized internal control activity?

d.reducing the cost of hiring seasonal employees

Cash balance according to the general ledger ? Bank statement balance $18,500 Outstanding checks 2,700 Customer's bounced check 350 Bank service charges 100 Deposits in transit 1,000 Interest earned on the checking account 60 How will the outstanding checks be handled on a bank reconciliation?

d.subtract from the bank statement balance

Dividends in arrears are required to be reported in

d.the footnotes accompanying the financial statements.

Which of the following is a transposition error?

writing $89 as $98