Big One - 40 TRUE/FALSE 1 The process of determining the...

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. 40 TRUE/FALSE 1. The process of determining the present value is referred to as discounting the present amount. True False 2. A prior period adjustment always includes a credit to Retained Earnings. True False 3. An aging schedule shows a required balance in Allowance for Doubtful Accounts of $9,600. If there is a credit balance in the allowance account of $2,500 prior to adjustment, the adjustment amount is $7,100. True False 4. Intercompany comparison refers to comparison with other companies to provide insight into competitive position. True False 5. In a defined contribution plan, the employer's contribution to the plan is defined by the terms of the plan. True False 6. The book value of an asset equals its cost less accumulated depreciation. True False 7. FICA taxes are commonly referred to as social security taxes. True False 8. In addition to the adjusted trial balance, information for the statement of cash flows is taken from comparative balance sheets and the current income statement. True False 9. Gains on exchanges of similar assets are deferred to future periods. True False 10. Each entry in the single-column purchases journal results in a debit to Merchandise Inventory and a credit to Accounts Payable. True False 11. The sale of bonds above face value causes the total cost of borrowing to be more than the bond interest paid. True False 12. The cost method derives its name from the fact that the Treasury Stock account is maintained at the cost of shares purchased. True False 13. The principal amount of a 9%, 3-year, note receivable is $300,000 and is dated January 1, 2006. The interest revenue to be recognized on December 31, 2006 is $9,000. True False 14. An unearned revenue arises when payment is accepted in advance of the goods being delivered. True False 15. The separation of the payroll activities of hiring, timekeeping, preparing payroll, and paying the payroll weakens internal control over the payroll transactions. True False 16. Issued shares of stock less outstanding shares equals treasury stock. True False 17. A statement of cash flows starts with net income and adds (or deducts) items that did not affect cash to arrive at net cash provided by operating activities if the indirect method is used. True False 18. Vertical analysis determines the percentage increase or decrease that has taken place over a period of time. True False
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19. One limitation of financial statement analysis is that the financial statements contain estimates. True False 20. The maturity date of a 60-day note dated May 1 is July 1. True False 21. Ordinary repairs are expenditures to increase the operating efficiency, productive capacity, or expected useful life of the asset. True False 22. When bonds are issued at face value, the debit to Cash is equal to the credit to Bonds Payable. True False 23. To compute the present value of a bond, both the interest payments and the principal amount must be discounted. True False 24. Federal and state unemployment taxes are deducted from an employee's gross pay to
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This note was uploaded on 04/04/2009 for the course ACC 321 taught by Professor Ahmedmokhtar during the Spring '09 term at Ain Shams University.

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Big One - 40 TRUE/FALSE 1 The process of determining the...

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