Acct. Quiz #5

Accumulated depreciation would be shown on which financial statement? A) Balance sheet B) Income statement C) Statement of cash flows D) None of these choices are correct.

A) Balance sheet

Which of the depreciation methods is called an accelerated depreciation method? A) Straight-line method B) Double-declining-balance method C) Units-of-activity method D) All of these choices are correct.

B) Double-declining-balance method

Which industry has the highest percentage of fixed assets to total assets? A) Software B) Food retail C) Heavy industry D) Merchandise retail

B) Food retail

Cost less accumulated depreciation equals A) depreciable cost. B) book value. C) residual value. D) None of these choices are correct.

B) book value.

A journal entry to record the issuance of preferred stock above par would include a A) credit to Cash. B) credit to Paid-In Capital in Excess of Par. C) debit to Preferred Stock. D) debit to Paid-In Capital in Excess of Par.

B) credit to Paid-In Capital in Excess of Par.

The journal entry to record costs related to extraordinary repairs would include a __________ to __________. A) credit; Accumulated Depreciation B) debit; Accumulated Depreciation C) debit; Cash D) credit; the respective asset account

B) debit; Accumulated Depreciation

All of the following are considered advantages of the corporate form of business except A) limited liability. B) double taxation. C) continuous life. D) None of these choices are correct.

B) double taxation

If a purchased item is long-lived but not used in normal operations, the asset is classified and recorded as a(n) A) fixed asset. B) investment. C) expense. D) contra asset.

B) investment.

A $20 par value stock in a 2:1 stock split will yield a new par value of A) $40. B) $30. C) $10 D) no change.

C) $10

On February 10, the corporation purchases back 2,000 shares of its own common stock for $50 per share. The entry to record the purchase would include a A) debit to Cash for $100,000. B) credit to Treasury Stock for $100,000. C) debit to Treasury Stock for $100,000. D) debit to Common Stock for $100,000.

C) debit to Treasury Stock for $100,000.

The entry to record the sale of equipment at book value would include a __________ to __________. A) debit; Loss on Sale of Equipment B) credit; Cash C) debit; Accumulated Depreciation D) credit; Accumulated Depreciation

C) debit; Accumulated Depreciation

The declaration date journal entry for a cash dividend would include A) a debit to Cash. B) a credit to Cash. C) a credit to Cash Dividends Payable. D) None of these choices are correct as no entry is needed on this date.

C) a credit to Cash Dividends Payable.

The exclusive right to publish and sell a literary, artistic, or musical composition is granted by a A) patent. B) trademark. C) copyright. D) franchise.

C) copyright.

The entry to record the amortization of a patent would include a debit to __________ and a credit to __________. A) Amortization Expense; Patents B) Amortization Expense; Accumulated Amortization C) Patents; Accumulated Amortization D) Patents Expense; Accumulated Amortization

A) Amortization Expense; Patents

The journal entry to record depletion would include a _____ to _____. A) debit; Depletion Expense B) credit; Depletion Expense C) debit; Accumulated Depreciation D) credit; Natural Resource Expense

A) debit; Depletion Expense

The __________ is the date the board of directors formally authorizes the payment of the dividend. A) declaration date B) record date C) payment date D) None of these choices are correct.

A) declaration date

A debit balance in Retained Earnings is known as a A) deficit. B) surplus. C) net loss. D) None of these choices are correct.

A) deficit.

The difference between a fixed asset's initial cost and residual value is known as its A) depreciable cost. B) book value. C) accumulated depreciation. D) net revenue.

A) depreciable cost.

A stock dividend __________ the assets, liabilities, or total stockholders' equity of a corporation. A) does not change B) increases C) decreases D) None of these choices are correct.

A) does not change

If the stock is issued for a price that is more than its par value, the stock A) has been sold at a premium. B) has been sold at a discount. C) has been sold at its stated value. D) is converted to no-par stock.

A) has been sold at a premium.

Which is a characteristic of a fixed asset? A) Short-term and impermanent. B) Only leased, not owned, by the company but used in normal operations. C) Exist physically so they are tangible assets. D) Offered for sale as part of normal operations.

C) Exist physically so they are tangible assets.

Assume that equipment acquired at a cost of $10,000 is fully depreciated. On June 30, the equipment is discarded. The entry to record the discard would be to debit __________ and credit __________. A) Equipment; Accumulated Depreciation—Equipment B) Accumulated Depreciation—Equipment; Equipment C) Equipment; Depreciation Expense—Equipment D) Accumulated Depreciation—Equipment; Depreciation Expense—Equipment

B) Accumulated Depreciation—Equipment; Equipment

On March 10, Blarney Corporation issued for cash 10,000 shares of no-par common stock at $40. The journal entry to record this transaction would include a A) debit to Cash for $10,000. B) credit to Cash for $400,000. C) credit to Common Stock for $400,000. D) credit to Common Stock for $100,000.

C) credit to Common Stock for $400,000.

All of the following fixed assets are depreciated EXCEPT A) building. B) truck. C) land. D) equipment.

C) land.

A corporation may reacquire (purchase) its own stock for which of the following reasons? A) To provide shares for resale to employees B) To reissue as bonuses to employees C) To support the market price of the stock D) All of these choices are correct.

D) All of these choices are correct.

Which of the following is a characteristic of natural resources? A) Removed for sale B) Naturally occurring C) Removed and sold over more than one year D) All of these choices are correct.

D) All of these choices are correct.

__________ are distributions of a corporation's earnings to stockholders. A) Profits B) Revenues C) Stocks D) Dividends

D) Dividends

The ultimate authority of a corporation belongs to the A) CEO. B) board of directors. C) CFO. D) None of these choices are correct.

D) None of these choices are correct.

Which industry has the lowest percentage of fixed assets to total assets? A) Entertainment B) Social media C) Transportation D) Software

D) Software

All of the following are considered fixed assets EXCEPT A) building. B) truck. C) land. D) accounts receivable.

D) accounts receivable.