Principles Managerial accounting

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Corporations are subject to fewer state and federal regulations than partnerships or proprietorships.

False

Creditors have a legal claim on the personal assets of the owners of a corporation if the corporation does not pay its debts.

False

Most of the largest U.S. corporations are privately held corporations.

False

The board of directors of a corporation legally owns the corporation.

False

The net income of a corporation is not taxed as a separate entity.

False

The transfer of stock from one owner to another requires the approval of either the corporation or other stockholders.

False

Declared and paid a cash dividend of $13,000.

Financing Activity

Issued $50,000 par value common stock for cash.

Financing Activity

Paid 17000 cash dividend to preferred stockholders

Financing activity; Not applicable

Paid 4000 cash dividend to common stockholders

Financing activity; Not applicable

Received 100000 from issuing bonds payable

Financing activity; Not applicable

Which of the following adjustments to convert net income to net cash provided by operating activities is not added to net income?

Gain on disposal of equipment

The order of presentation of activities on the statement of cash flows is

Operating, investing, and financing

If Ivanhoe company issues 4300 shares of $5 par value common stock for 150500, the account

Paid-in capital in excess of par will be credited for 129000

Which one of the following affects cash during a period?

Payments of accounts payable

The two ways that a corporation can be classified by ownership are

Publicly held & privately held

suppose that the board of directors of target declared a cash dividend on November 15, 2025 to be paid on December 15, 2025 to stockholders owning the stock on November 30, 2025. Given these facts, the date of November 30, 2025 is referred to as the

Record date

Interest payable account increased 5000

Operating activity; Added to net income

Inventory increased 2000

Operating activity; Subtracted from net income

The information to prepare the statement of cash flows comes from all of the following sources except

Adjusted trial balance

Which one of the following is not necessary in order for a corporation to pay a cash dividend?

Approval of stockholders

The date on which a cash dividend becomes a binding legal obligation is on the

Declaration date

Computing cash flows from operating activities by starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the

Indirect method

Sold a long-term investment with a cost of $15,000 for $15,000 cash.

Investing Activity

Acquired equipment for 16000 cash

Investing activity; Not applicable

Received 26000 from sale of plant assets

Investing activity; Not applicable

Generally, the most important category on the statement of cash flows is cash flows from

Operating activites

Accounts receivable account decreased 10000

Operating activity; Added to net income

Depreciation expense was 80000

Operating activity; Added to net income

Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000.

Noncash Activity

Purchased a machine for $30,000, giving a long-term note in exchange.

Noncash Activity

Acquired land by issuing common stock to seller

Noncash Transaction; Not applicable

Collected $16,000 of accounts receivable.

Operating Activity

Paid $18,000 on accounts payable.

Operating Activity

A corporation is an entity separate and distinct from its owners.

True

As a legal entity, a corporation has most of the rights and privileges of a person.

True

Corporations may buy, own, and sell property; borrow money; enter into legally binding contracts; and sue and be sued.

True

The chief accounting officer of a corporation is the controller.

True

Which of the following transactions does not affect cash during a period?

Write-off of an uncollectible account

Treasury stock is

a corporation's own stock, which has been reacquired and held for future use.

The acquisition of land by issuing common stock is

a noncash transaction that is not reported in the body of a statement of cash flows

Continuous life

advantage

Ease of transfer of ownership

advantage

Separate legal entity

advantage

ability to acquire capital

advantage

seperation of ownership and management

advantage

The acquisition of treasury stock by a corporation

decreases its total assets and total stockholders' equity.

Government Regulation

disadvantage

Taxable entity resulting in additional taxes

disadvantage

issuance of capital stock

financing activity

payment of dividends

financing activity

retirement of bonds

financing activity

purchase of land

investing activity

sale of building at book value

investing activity

Financing activities involve

issuing debt

Exchange land for patent

noncash investing and financing activity

conversion of bonds into common stock

noncash investing and financing activity

issuance of bonds for land

noncash investing and financing activity

Unlimited liability of owners

not applicable

amortization of patent

operating activity

depreciation of plant assets

operating activity

loss on disposal of plant assets

operating activity


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