Accounting 2 Midterm

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True

A company cannot report a gain or loss when buying or selling its own stock. True False

Stock Dividends is debited for $19,040

A company originally issued 16,000 shares of $8 par value common stock at $7 per share. The board of directors declares a 17​% stock dividend when the market price of the stock is $11 a share. Which of the following is included in the entry to record the declaration of a stock​ dividend? A. Stock Dividends is credited for $29,920. B. Stock Dividends is debited for $19,040 C. Paid−In Capital in Excess of Par—Common is credited for $19,040. D. Stock Dividends is debited for $29,920.

Cash Dividends is debited for $26,000

A corporation declares a dividend of $2.00 per share on 13,000 shares of common stock. Which of the following is included in the entry to record the​ declaration? A. Paid−In Capital in Excess of Par—Common is credited for $26,000 .B. Cash Dividends is debited for $26,000 C. Dividends Payable—Common is debited for $26,000. D. Cash Dividends is credited for $26,000.

The situation should be described in a note to the financial statements.

A corporation has been sued for product failures allegedly resulting in injuries to the individuals bringing the lawsuit. The​ company's lawyers believe it is more than​ remote, but less than​ probable, that the lawsuit will result in an actual liability. Which of the following actions should be taken by the​ company's management? A. The liability should be estimated and recorded as an expense. B. The possible liability should be ignored. C. The situation should be described in a note to the financial statements. D. Management should consider resigning.

Can be​ discarded, sold, or exchanged for another plant asset

A fully depreciated plant asset​ ________ A. is no longer reported on the balance sheet B. can no longer be used in the business C. is removed from the accounting records D. can be​ discarded, sold, or exchanged for another plant asset

The possible liability should not be shown in the financial statements.

A restaurant is being sued because a customer claims to have found a bug in her chili. The​ company's lawyers believe there is only a remote possibility that the lawsuit will result in an actual liability. Which of the following actions should be taken by the​ company's management? A. The situation should be described in a note to the financial statements. B. The possible liability should not be shown in the financial statements. C. The liability should be estimated and accrued as an expense. D. An expense must be matched to the period in which the incident occurred

accounts payable

Amounts owed for products or services purchased on account are called​ ________. A. unearned revenue B. accounts payable C. warranty payable D. accrued expense

A credit to FICA—OASDI Taxes Payable for $1,109.80

Angie Pereira and Ferro Schwartz are employees of Free​ Star, Inc. In February​ 2025, Angie's gross pay was $6,000​, and​ Ferro's gross pay was $11,900. All earnings are subject to FICA—OASDI Tax of 6.2​% and FICA—Medicare Tax of 1.45​%. Which of the following would be included in the entry to record the salaries expense for​ February? A. a credit to Salaries Expense for $1,109.80 B. a debit to Salaries Payable to employees for $1,109.80 C. a debit to FICA—Medicare Taxes Payable for $1,109.80 D. a credit to FICA—OASDI Taxes Payable for $1,109.80

the principal plus interest

At the maturity of a note​ payable, a borrower will pay​ ________. A. the principal amount only B. the principal plus interest C. the interest amount only D. the principal minus interest

payroll register

A​ ________ is a schedule that summarizes the​ earnings, withholdings, and net pay for each employee. A. cash ledger B. bin card C. payroll register D. bank reconciliation statement

Net income will be overstated.

A​ company's accountant capitalized a payment that should have been recorded as a revenue expenditure. How will this error affect the​ company's financial​ statements? A. Net income will be overstated. B. Assets will be understated C. Revenues will be understated. D. Liabilities will be understated.

Par drops to $5.50​; total shares stay at 48,000

Ballpark has 48,000 shares of $11 par common stock outstanding. Ballpark announces a stock split of 4−for−1. What is the effect of the​ split? A. par drops to $5.50​; total shares stay at 48,000 B. par stays at $11.00​; total shares increase to 12,000 C. par drops to $2.75​; total shares increase to 192,000 D. par goes to $44.00​; total shares increase to

if they acquire another company at an amount higher than the market value of its net assets

Businesses record goodwill ____________________________ A. if they acquire another company at an amount higher than the market value of its net assets B. when they continue the business of an acquired company C. when they enjoy an outstanding reputation and loyalty with customers D. if their market value has increased significantly in the recent years

Warranty Expense 18,330 Estimated Warranty Payable 18,330

Classic Sales Corporation offers warranties on all their electronic goods. Warranty expense is estimated at 3​% of sales revenue. In​ 2024, the company had $611,000.00 of sales. In the same​ year, it paid out $9,000.00 of warranty payments. Which of the following is the entry needed to record the estimated warranty​ expense? A. Warranty Expense 9,000 Estimated Warranty Payable 9,000 B. Warranty Expense 18,330 Estimated Warranty Payable 18,330 C. Warranty Expense 18,330 Sales Revenue 18,330 D. Estimated Warranty Payable 9,000Cash 9,000

passed dividends on cumulative preferred stock

Dividends in arrears are​ ________. A. a liability on the balance sheet B. passed dividends on common stock C. passed dividends on cumulative preferred stock D. passed dividends on noncumulative preferred stock

Deducted to arrive at an​ employee's net pay

Federal income taxes are​ ________. A. deducted to arrive at an​ employee's gross pay B. added to arrive at an​ employee's net pay C. deducted to arrive at an​ employee's net pay D. not borne by the employee

Salaries and Wages Payable 65,500 Cash 65,500

For the month of​ September, Seawide​ Sales, Inc. recorded gross pay of $70,750. The net pay for the month amounted to $65,500. The salaries are paid on October 5. Which of the following is the journal entry for the payment of​ salaries? A. Salaries and Wages Expense 65,500 Cash 65,500 B. Salaries and Wages Payable 70,750 Cash 70,750 C. Salaries and Wages Payable 65,500 Cash 65,500 D. Cash 70,750 Salaries and Wages Expense 70,750

modification for new use

Freeman Company owns a delivery truck. Which of the following​ costs, associated with the​ truck, will be capitalized and​ depreciated? A. normal engine repair B. replacement of tires C. modification for new use D. oil change and lubrication

The Treasury Stock account would decrease by $23,800.

If Tolan resold 1,700 shares of treasury stock for $17.5 per​ share, which of the following statements would be​ true? A. The Retained Earnings account would increase by $29,750. B. The Treasury Stock account would decrease by $47,600. C. The Paid−In Capital in Excess of Par—Common account would increase by $1,700. D. The Treasury Stock account would decrease by $23,800.

record an impairment loss

In​ 2024, a company purchased a small business for​ $250,000. The market value of the small​ business's assets was​ $400,000, and the market value of the liabilities was​ $200,000. The company recorded goodwill of​ $50,000 at the time of acquisition. At the end of​ 2025, it measured goodwill and found it had a remaining fair value of only​ $20,000. At year−end ​2025, the company will​ ________. A. record an impairment loss B. record a gain in goodwill C. record accumulated depletion D. record a loss on sale of assets

FICA

It is mandatory for both the employer and employee to pay​ ________. A. federal unemployment tax B. FICA C. employee income tax D. SUTA

Estimated Warranty Payable 18,000 Merchandise Inventory 18,000

Masterpiece Sales Corporation offers warranties on all their electronic goods. Warranty expense is estimated at 4​% of sales revenue. In​ 2025, the company had $608,000.00 in sales. In the same​ year, Masterpiece Sales replaced defective goods with goods that had a cost of $18,000.00. Which of the following is the entry needed to record the replacement of the defective​ goods? A. Estimated Warranty Payable 18,000 Merchandise Inventory 18,000 B. Warranty Expense 24,320 Merchandise Inventory 24,320 C. Warranty Expense 24,320 Estimated Warranty Payable 24,320 D. Warranty Expense 18,000 Estimated Warranty Payable 18,000

Nice will record neither a gain nor a loss.

Nice International originally issued 104,000 shares of common stock at a price of $23 per share. A year​ later, it distributed a 10​% stock dividend to shareholders. At the time of the stock​ dividend, the share price had increased to $29 per share. Which of the following statements is​ true? A. Nice will record a loss of $62,400. B. Nice will record a gain of $62,400. C. Nice will record sales revenues of $239,200. D. Nice will record neither a gain nor a loss.

Debit Unearned Revenue $6,267​, and credit Service Revenue $6,267.

On April​ 1, 2025, Orbit Services received $9,400 in advance of performing the services from a customer for three months of service — ​April, May and June. What would be the journal entry to adjust the accounts at the end of​ May? (Do not round any intermediate​ calculations, and round your final answer to the nearest​ dollar.) A. Debit Unearned Revenue $6,267​, and credit Service Revenue $6,267. B. Debit Service Revenue $3,133​, and credit Unearned Revenue $3,133. C. Debit Service Revenue $6,267​, and credit Accounts Receivable $6,267. D. Debit Unearned Revenue $9,400​, and credit Service Revenue $9,400.

Debit Cash​ $3,500, and credit Unearned Revenue​ $3,500.

On August 31 of the current​ year, Allright Services received​ $3,500 in advance of performing the service. Which journal entry is needed to record the receipt of​ cash? A. Debit Unearned Revenue​ $3,500, and credit Cash​ $3,500 .B. Debit Cash​ $3,500, and credit Service Revenue​ $3,500. C. Debit Cash​ $3,500, and credit Unearned Revenue​ $3,500. D. Debit Unearned Revenue​ $3,500, and credit Service Revenue​ $3,500.

Credit Common Stock—$8 Par Value for $80,000 and credit Paid−In Capital in Excess of Par—Common $410,000

On December​ 2, 2024,​ Eshares, Inc. purchases land. In payment for the​ land, Eshares, Inc. issues 10,000 shares of common stock with $8 par value. The land has been appraised at a market value of $490,000. Which of the following is included in the journal entry to record this​ transaction? A. credit Common Stock—$8 Par Value for $80,000 and credit Paid−In Capital in Excess of Par—Common $410,000 B. debit Common Stock—$8 Par Value for $80,000 and debit Paid−In Capital in Excess of Par—Common $410,000 C. credit Common Stock—$8 Par Value for $490,000 D. debit Cash $490,000

Debit Dividends Payable—Common $105,000​, and credit Cash $105,000.

On November​ 1, 2024,​ Nada, Inc. declared a dividend of $5.25 per share on common stock.​ Nada, Inc. has 20,000 shares of common stock outstanding and no preferred stock. The date of record is November​ 15, and the payment date is November​ 30, 2024. Which of the following is the journal entry needed on November​ 30, 2024? A. Debit Cash Dividends $105,000​, and credit Dividends Payable—Common $105,000. B. Debit Cash $105,000​, and credit Dividends Payable—Common $105,000. C. Debit Cash Dividends $105,000​, and credit Cash $105,000 .D. Debit Dividends Payable—Common $105,000​, and credit Cash $105,000.

Debit Cash Dividends $89,250​, and credit Dividends Payable—Common $89,250.

On November​ 1, 2024,​ Uno, Inc. declared a dividend of $4.25 per share.​ Uno, Inc. has 21,000 shares of common stock outstanding and no preferred stock. Which of the following is the journal entry needed to record the declaration of the​ dividend? A. Debit Cash $89,250​, and credit Dividends Payable—Common $89,250. B. Debit Cash Dividends $89,250​, and credit Dividends Payable—Common $89,250. C. Debit Cash Dividends $89,250​, and credit Cash $89,250. D. Debit Dividends Payable—Common $89,250​, and credit Retained Earnings $89,250.

No journal entry is made on the date of record.

On November​ 1, 2025,​ Juno, Inc. declared a dividend of​ $3.00 per share on common stock.​ Juno, Inc. has​ 10,000 shares of common stock outstanding and​ 20,000 shares of preferred stock. The date of record is November​ 15, and the payment date is November​ 30, 2025. Regarding the date of​ record, which of the following statements is​ true? A. The company transfers cash to a brokerage firm on the date of record. B. The liability must be recorded on the date of record .C. Cash is disbursed to shareholders on the date of record. D. No journal entry is made on the date of record.

Determines who owns the shares of stock

On the date of record for a​ dividend, the company​ ________ A. determines who owns the shares of stock B. issues new shares of stock C. records the dividend payable amount D. disburses dividend payments to stockholders

declaration date

On the​ ________, cash dividends become a liability of a corporation. A. declaration date B. payment date C. last day of the fiscal year D. date of record

are held by the stockholders

Outstanding stock represents shares of stock that​ ________. A. are held by the stockholders B. have been authorized by state law C. have been issued but may or may not be held by stockholders D. give the owners certain advantages

amounts received from stockholders in exchange for stock

Paid−incapital consists of​ ________. A. amounts received from customers B. amounts received from stockholders in exchange for stock C. earnings generated by the corporation D. amounts raised by issuing bonds or preferred stocks

receive a dividend preference over common stockholders

Preferred stockholders​ ________. A. are guaranteed to receive an annual dividend payment B. receive a set percentage of corporation net income C. receive a dividend preference over common stockholders D. are guaranteed that they will not have a loss on their investment

debit to Cash for $208,000 and a credit to Common Stock—No−Par Value for $208,000

Pumpkin Corporation issued 8,000 shares of common stock on January​ 1, 2024. The stock has no par value and was issued at $26 per share. The journal entry for this transaction includes a​ ________. A. debit to Cash for $208,000 and a credit to Paid−In Capital in Excess of Par—Common for $208,000 B. credit to Cash for $208,000 and a debit to Common Stock—No−Par Value for $208,000 C. debit to Cash for $208,000 and a credit to Common Stock—No−Par Value for $208,000 D. credit to Cash for $208,000​, a debit to Paid−In Capital in Excess of Par—Common for $8,000​, and a debit to Common Stock—No−Par Value for

Gross pay minus all deductions such as income tax withheld equals net pay.

Regarding gross and net​ pay, which of the following statements is​ correct? A. Employers are required to deposit net pay into the​ employee's bank account. B. Net pay represents the total salaries and wages expense to the employer. C. Gross pay minus all deductions such as income tax withheld equals net pay. D. For most​ businesses, gross pay equals net pay.

If any impairment​ occurs, the company records a loss in the period in which the intangible asset was acquired.

Regarding impairment of intangible​ assets, which of the following statements is​ incorrect? A. Intangible assets are impaired when there has been a permanent decline in the value of the asset. B. Impairment occurs when the fair value of an intangible asset is less than the book value. C. Intangible assets with an indefinite life are tested for impairment annually. D. If any impairment​ occurs, the company records a loss in the period in which the intangible asset was acquired.

Debit Stock Dividends $302,400​, credit Common Stock Dividend Distributable $18,900 and credit Paid−In Capital in Excess of Par—Common $283,500

Risingstar Corporation currently has 126,000 shares outstanding of $1 par value common stock. The stock was originally issued for $14 per share. On March​ 15, the board of directors declares a 15​% stock dividend when the stock is selling for $16 per share. Which of the following is the correct journal entry to record this​ transaction? (Do not round intermediate​ calculations.) A. debit Paid−In Capital in Excess of Par—Common $302,400 and credit Retained Earnings $302,400 B. debit Stock Dividends $302,400​, credit Common Stock Dividend Distributable $18,900 and credit Paid−In Capital in Excess of Par—Common $283,500 C. debit Common Stock Dividend Distributable $18,900​, debit Paid−In Capital in Excess of Par—Common for $283,500 and credit Retained Earnings $302,400 D. debit Stock Dividends $302,400 and credit Common Stock Dividend Distributable B

board of directors of the company

Stock dividends are declared by the​ ________. A. board of directors of the company B. stockholders of the company C. chief executive officer of the company D. chief financial officer of the company

affects only​ stockholders' equity accounts

The distribution of a stock dividend​ ________. A. affects only​ stockholders' equity accounts B. decreases assets and increase liabilities C. decreases both assets and liabilities D. increases both dividends payable and cash

debit to Dividends Payable for $24,375

The entry to record the payment of a previously declared dividend of $1.25 per share on 19,500 shares of common stock includes a​ ________. A. debit to Cash Dividends for $24,375 B. debit to Cash $24,375 C. debit to Dividends Payable for $24,375 D. credit to Cash Dividends for $24,375

Residual value

The expected value of an asset at the end of its useful life is known as​ ________ A. residual value B. market value C. book value D. carrying value

in the same period that the company records the revenue related to that warranty

The matching principle requires businesses to report Warranty Expense​ ________. A. in the long−term assets section of the balance sheet B. in the period after the related revenue is recorded C. in the period prior to which the company records the revenue related to that warranty D. in the same period that the company records the revenue related to that warranty

the amount assigned by a company to a share of its stock

The par value of stock is​ ________. A. the current selling price of stock B. the highest price for which a share can sell C. the price paid if the corporation purchases its own stock back D. the amount assigned by a company to a share of its stock

decreases assets and​ stockholders' equity

The purchase of treasury stock​ ________. A. decreases assets and​ stockholders' equity B. increases assets and​ stockholders' equity C. decreases assets and increases​ stockholders' equity D. increases assets and decreases​ stockholders' equity

Internally generated equity that is earned by profitable operations that is not distributed to stockholders

The retained earnings of a corporation is​ ________. A. externally generated equity that is acquired from banks and other creditors B. internally generated equity that is received from employee stock purchases C. internally generated equity that is earned by profitable operations that is not distributed to stockholders D. externally generated equity that is contributed by shareholders

paid−in capital and retained earnings

The two basic sources of​ stockholders' equity are​ ________. A. common stock and preferred stock B. paid−in capital and retained earnings C. common stock and bonds D. no−par and stated value stock

Copyright

The type of intangible asset related to the exclusive right to reproduce and sell a book or intellectual property is a​ ________. A. Franchise B. Patent C. Copyright D. Trademark

a contra equity account

Treasury stock is​ ________. A. an asset account B. a contra equity account C. a liability account D. a contra asset account

Decreases the number of shares outstanding

Treasury stock​ ________. A. increases the number of shares outstanding B. increases the number of shares issued C. decreases the number of shares outstanding D. decreases the number of shares issued

oil change and lubrication

Westin Delivery Service owns a delivery truck. Which of the following​ costs, associated with the​ truck, will be treated as revenue​ expenditure? A. oil change and lubrication B. modification for new use C. addition to storage capacity D. major engine overhaul

Interest Payable is credited

When a business records accrued interest expense on a note​ payable, ________. A.Interest Payable is credited B. Cash is debited C. Note Payable is credited D. Interest Expense is credited

remains unchanged

When the corporation declares a stock​ dividend, a​ stockholder's percentage ownership in the stock of the corporation​ ________. A. will increase B. can increase or decrease C. will decrease D. remains unchanged

Sales Tax Payable

Which of the following accounts is credited by the seller when tax is collected on retail​ sales? A. Payroll Tax B. Sales Tax Payable C. Unearned Revenue D. Accounts Payable

Cash dividend declared

Which of the following actions will decrease the amount of Total​ Stockholders' Equity? A. stock split B. repayment of bond principal C. stock dividend declared D. cash dividend declared

the units−of−production method

Which of the following depreciation methods allocates a varying amount of depreciation to expense each year based on an​ asset's usage? A. the annuity method B. the straight−line method C. the units−of−production method D. the double−declining−balance method

The double−declining−balance method

Which of the following depreciation methods always allocates a higher amount of depreciation in earlier years than in later​ years? A. the double−declining−balance method B. the straight−line method C. the units−of−production method D. the first−​in, first−out method

It is used in the operations of a business.

Which of the following is a characteristic of a plant​ asset, such as a​ building? A. It will have a negligible value at the end of its useful life. B. It is available for sale to customers in the ordinary course of business. C. It is used in the operations of a business. D. It has a short useful life.

To decrease the market price at which the stock is trading

Which of the following is a reason for a company to announce a stock​ split? A. to reward investors B. to increase total​ stockholders' equity C. to provide the shareholders with something of​ value, when the company cannot afford a cash dividend D. to decrease the market price at which the stock is trading

Neither a stock split nor a stock dividend will affect total assets or total liabilities.

Which of the following is a true statement regarding the effect of a stock split and stock dividend on total assets or​ liabilities? A. A stock split will increase total​ assets, but a stock dividend will not. B. Both a stock split and a stock dividend will increase total liabilities. C. Both a stock split and a stock dividend will decrease total assets. D. Neither a stock split nor a stock dividend will affect total assets or total liabilities.

Stockholders receive their proportionate share of any assets remaining after the corporation pays its debts and liquidates.

Which of the following is a true​ statement? A. Stockholders are guaranteed annual dividends. B. Stockholders may authorize a business contract on behalf of the corporation. C. Stockholders may vote only if they physically attend the annual​ stockholders' meeting. D. Stockholders receive their proportionate share of any assets remaining after the corporation pays its debts and liquidates.

limited liability of stockholders

Which of the following is an advantage of the corporate form of​ business? A. less degree of government regulation B. separation of ownership and management C. limited liability of stockholders D. low start−up costs

depletion

Which of the following is an expense that results from the usage of a natural​ resource? A. amortization B. depreciation C. depletion D. obsolescence

Cash is debited for $330,000.

Which of the following is included in the entry to record the issuance of 15,000 shares of $7 par value common stock at $22 per share for​ cash? A. Paid−In Capital in Excess of Par—Common is debited for $225,000. B. Common Stock is credited for $330,000 .C. Cash is debited for $330,000. D. Common Stock is debited for $105,000.

Treasury Stock—Common is debited for $420,000.

Which of the following is included in the entry to record the​ corporation's purchase of 40,000 shares of its common stock for $10.5 per​ share? A. Paid−In Capital from Treasury Stock Transactions is credited for $25,000. B. Treasury Stock—Common is debited for $420,000. C. Common Stock—$5 Par Value is credited for $200,000. D. Retained Earnings is debited for $420,000.

federal unemployment tax

Which of the following is paid by the employer​ only? A. employee income tax B. OASDI tax C. federal unemployment tax D. Medicare tax

Bonuses

Which of the following is pay over and above base​ salary, usually paid for exceptional​ performance? A. bonuses B. FICA C. wages D. benefits

federal income tax

Which of the following is required to be deducted from​ employees' paychecks? A. FUTA B. SUTA C. charitable contributions D. federal income tax

A patent must be capitalized and amortized over 20 years or less.

Which of the following is the correct accounting treatment for a​ patent? A. A patent must be capitalized and amortized over 20 years or less. B. A patent must be depreciated or​ impaired, but not amortized. C. A patent must be shown as a current asset on the balance sheet. D. A patent must be​ expensed, not​ capitalized, in the period in which it is purchased.

The liability should be estimated and recorded.

Which of the following is the proper treatment for a contingency that is probable but the exact amount of which is not​ known? The amount can be estimated. A. The liability should be estimated and recorded. B. The liability should be reported in the notes to the financial statements. C. The liability should be ignored. D. The liability should be doubled following conservatism.

It is a potential liability that depends on a future event.

Which of the following is true of a contingent​ liability? A. It is a potential liability that depends on a future event. B. It is a liability resulting from a lawsuit settled in court. C. It is an actual liability that depends on a past event. D. It is an actual liability that is difficult to estimate.

The earnings of a corporation may be subject to double taxation.

Which of the following is true of a​ corporation? A. The stockholders of a corporation have unlimited liability for the​ corporation's debt. B. A corporation cannot be privately held. C. A corporation has a limited life. D. The earnings of a corporation may be subject to double taxation.

Dividends are a distribution of​ cash, stock, or other property to stockholders

Which of the following is true of​ dividends? A. Dividends are a distribution of​ cash, stock, or other property to stockholders. B. Dividend payments increase​ stockholders' equity. C. Dividend payments decrease paid−in capital. D. Dividends increase assets and decrease total​ stockholders' equity of a corporation.

Goodwill is not amortized

Which of the following is true of​ goodwill? A. Goodwill is not amortized. B. Both created and acquired goodwill must be recorded in the books. C. Goodwill must be capitalized when acquired and amortized over seven years or less D. Goodwill must be expensed when acquired.

The​ asset's remaining depreciable book value will be spread over the​ asset's new useful life.

Which of the following is true when the estimate of an​ asset's useful life is​ changed? A. The​ asset's remaining depreciable book value will be spread over the​ asset's new useful life. B. The depreciation expense in the prior years is restated C. Prior​ years' financial statements must be restated. D. The new estimate is ignored until the last year of the​ asset's life.

patents, copyrights, trademarks

Which of the following items should be​ amortized? A. natural resources B. tangible​ property, plant, and​ equipment, other than land C. goodwill D. patents, copyrights, trademarks

The balance in Common Stock remains the same.

Which of the following occurs when a 2−for−1 stock split is​ declared? A. The balance in Common Stock remains the same. B. The balance in Common Stock is reduced to half the original amount. C. The balance in Common Stock doubles. D. The balance in Paid−in Capital in Excess of Par—Common doubles.

Stockholders' equity decreases.

Which of the following occurs when a cash dividend is​ declared? A. Liabilities decrease. B. Assets increase C. Liabilities remain unchanged D. Stockholders' equity decreases.

The number of outstanding shares increases to 60,000.

Which of the following occurs when the board of directors declares a 3−for−1 stock split on 20,000 outstanding shares of $22 par common​ stock? A. The par value of the stock remains the same .B. The number of outstanding shares remains at 20,000. C. The number of outstanding shares increases to 60,000. D. The par value of the stock increases to $44 per share.

Matching principle

Which of the following requires businesses to record​ depreciation? A. going concern principle B. matching principle C. revenue recognition principle D. cost principle

Cost to clear the land of old buildings

Which of the following should be included in the cost of​ land? A. cost of installing signage B. cost of installing fences C. cost to clear the land of old buildings D. cost to build sidewalks on the land

FICA—OASDI taxes

Which of the following taxes has a ceiling on the amount of annual earnings subject to​ tax? A. federal income tax B. FICA—OASDI taxes C. FICA—Medicare taxes D. sales tax

A debit to Sales Tax Payable

Which of the following would be included in the journal entry to record the payment of sales tax​ payable? A. a credit to Sales Tax Payable B. a credit to Sales Tax Expense C. a debit to Sales Tax Payable D. a debit to Sales Tax Expense

Commission

________ is pay stated as a percentage of a sale amount. A. Bonus B. Commission C. Salary D. Wage

Wage

​________ is a pay amount stated at an hourly rate. A. Wage B. Commission C. Salary D. Bonus


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