ach_test_6 - Achievement Test 6 7 Chapters 11-13 Financial...

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Name _________________________ Financial Accounting Instructor ______________________ Section # _______ Date _________ Part I II III IV V VI VII Total Points 36 6 6 10 12 10 20 100 Score PART I — MULTIPLE CHOICE (32 points) Instructions Designate the best answer for each of the following questions. ____ 1. A disadvantage of the corporate form of business is a. its status as a separate legal entity. b. continuous existence. c. government regulation. d. ease of transfer of ownership. ____ 2. James Corporation issued 2,000 shares of $5 par value common stock for $20 per share. The entry to record this transaction includes a credit to Paid-in Capital in Excess of Par for a. $40,000. b. $30,000. c. $10,000. d. $20,000. ____ 3. Toran Manufacturing declared an 10% stock dividend when it had 150,000 shares of $5 par value common stock outstanding. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to a. Retained Earnings of $180,000. b. Paid-in Capital in Excess of Par for $105,000. c. Common Stock for $180,000. d. Retained Earnings for $75,000. ___ 4. Richer Company paid $21,000 to buy 4,000 shares of its $6 par value common stock for the treasury. The stock was originally sold for $25,000. The entry to record the purchase includes a a. debit to Treasury Stock for $21,000. b. credit to Treasury Stock for $25,000. c. debit to Treasury Stock for $25,000. d. credit to Common Stock for $21,000.
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Test Bank for Financial Accounting: Tools for Business Decision Making, Fourth Edition AT6-2 ____ 5. The purchase of treasury stock a. increases total assets and decreases total stockholders' equity. b. decreases total assets and increases total stockholders' equity. c. increases total assets and increases total stockholders' equity. d. decreases total assets and decreases total stockholders' equity. ____ 6. If a loss of $10,000 is incurred in selling (for cash) equipment having a book value of $50,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is a. $10,000. b. $50,000. c. $40,000. d. $65,000. _____ 7. Ross Paints reported sales of $350,000, total assets of $150,000, total stock-holders' equity of $60,000, current assets of $50,000, current liabilities of $30,000, and cash of $15,000. In a vertical analysis of the balance sheet, cash would be shown as a. 25%. b. 10%. c. 30%. d. 20%. ____ 8. Common size analysis is one technique of a. ratio analysis. b. horizontal analysis. c. liquidity analysis. d. vertical analysis. ____ 9. The purchase of an office building by issuing long-term notes payable should be reported as a a. cash outflow in the financing section of the statement of cash flows. b. cash outflow in the investing section of the statement of cash flows.
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ach_test_6 - Achievement Test 6 7 Chapters 11-13 Financial...

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