Chap 13/Review

If bonds are issued at 101, this means that a. a $1,000 bond sold for $1,010. b. the bonds sold at a discount. c. a $1,000 bond sold for $101. d. the bond rate of interest is 101% of the market rate of interest.

the bond rate of interest is 101% of the market rate of interest.

Earnings per share is an indication of how much

the company earned for each share of outstanding common stock.

Bonds are sold at a premium if

the market rate of interest was more than the stated rate at the time of issue.

When a company declares a 2-for-1 stock split,

there is no effect on total owners' equity.

Current liabilities are defined as those liabilities which will be satisfied

within one year or within the operating cycle, whichever is longer.

Operating assets with no physical properties are called

Intangible Assets

On the issuance date, the Bonds Payable account had a balance of $50,000,000 and the Premium on Bonds Payable had a balance of $1,000,000. What was the issue price of the bonds?

51,000,000

On the balance sheet, the cumulative amount of plant and equipment already expensed is reported in an account called

Accumulated Depreciation

Which of the following is not a component of stockholders' (owners') equity on the Balance Sheet?

All are reported in the stockholders' equity section

Current Ratio

Current Assets/Current Liabilities

Which of the following terms is used to identify the process of expense recognition for buildings and equipment? A. Amortization B. Depletion C. Depreciation D. Revision

Depreciation

ROI

Earnings - Initial Investment/ Initial Investment

Which of the following is classified as Property, Plant and Equipment? A. Furniture B. Copyright C. Trademark D. Patent

Furniture

The Discount on Bonds Payable account is shown on the balance sheet as

Long-term liabilities

ROE

Net Income/ Average Stockholders' Equity

To determine the current market price of the stock, one should review the

None

Which of the following accounts is not classified as a current liability?

Note Payable (due in 3 years)

P/E

Price Per Share/ Earnings Per Share

Gross Profit

Sales - Cost of Goods Sold

Which of the following considerations is most important for a stockholder when evaluating whether to purchase stock in a company?

Will earnings per share be distributed to stockholders?

The primary reason for a stock split is to

decrease the market value of the stock.

The Retained Earnings account balance for a large corporation is $10,000,000. This amount represents

earnings that have not been distributed to shareholders.

Authorized stock represents the

maximum number of shares that can be issued.

EPS

net income / average outstanding common shares

Peppermint, Inc. wants to measure the relationship between profitability and the investment made by shareholders. Peppermint should use the

return on stockholders' equity.