Stats

During the year, Reid & Wright Learning Center, Inc., spent $500,000 on training and capitalized the entire amount, intending to write it off over 5 years. This accounting treatment is ______.

incorrect. The company should treat the entire amount as an expense during the year

If a bond is sold at a discount, Interest Expense reported on the Income Statement in subsequent years __________.

increases each year

If a bond is sold at a premium, Cash Paid for Interest reported on the Statement of Cash Flows in subsequent years __________.

stays the same each year

What is book value (or net book value) of plant and equipment and on which financial statement is it reported?

Book value is the difference between historical cost and Accumulated Depreciation, and it is reported on the balance sheet.

Central Perk, Inc. issued 10,000 shares of no-par value common stock at $10 per share. The proper entry to record this issuance of shares is to debit _______.

Cash and credit Common Stock for $100,000

Which of the following is NOT an intangible asset?

Human resources

Which statement best describes the proper accounting treatment for long-term assets classified as Plant and Equipment?

Record them as assets and then depreciate them over an estimated useful life.

Common stock's par value is ______.

a minimal amount specified in the corporate charter

Before common dividends can be paid, the ______ preferred stock must be paid ______.

cumulative; dividends in arrears

The purchase of treasury stock ______.

decreases total assets and decreases shareholders' equity

When a shareholder sells its shares to another person for more than its original cost, the corporation ______.

does not make a journal entry

Retained Earnings of $100,000 represents a corporation's cumulative earnings ______ and is reported on the ______.

kept; balance sheet and statement of shareholders' equity