ACT 210 final - 1.The declaration of a stock dividend will:...

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1.The declaration of a stock dividend will: A) increase paid-in capital. B) change the total of stockholders' equity. C) increase total liabilities. D) increase total assets Answer: B) and D) 2. Herman Corporation had net income of $160,000 and paid dividends of $40,000 to common stockholders and $20,000 to preferred stockholders in 2007. Herman Corporation's common stockholders' equity at the beginning and end of 2007 was $450,000 and $550,000, respectively. Herman Corporation's payout ratio for 2007 is: A) $5 per share. B) 25%. C) 20%. D) 12.5%. Answer: B) 3. Moss County Bank agrees to lend the Sadowski Brick Company $200,000 on January 1. Sadowski Brick Company signs a $200,000, 6%, 9-month note. What is the adjusting entry required if Sadowski Brick Company prepares financial statements on June 30? A) B) C) D) however the answer is : With the info you provided 6 percent of 200000 is 12000 thus the interest unless its 6percent per month is 12000 4. The relationship between current assets and current liabilities is A) useful in determining income. B) useful in evaluating a company's liquidity. C) called the matching principle. D) useful in determining the amount of a company's long-term debt. Answer is B) 5. Which of the following is not true of a corporation? A) It may buy, own, and sell property. B) It may sue and be sued. C) The acts of its owners bind the corporation. D) It may enter into binding legal contracts in its own name Answer is C) 6. Identify the effect the declaration of a stock dividend has on the par value per share and book value per share.
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A) Par Value per Share: Increase, Book Value per Share: Decrease B) Par Value per Share: No effect, Book Value per share: Increase C) Par Value per Share: Decrease, Book Value per Share: Decrease D) Par Value per Share: No effect, Book Value per share: Decrease Answer is D) 7. Generally, convertible bonds do not pay interest. A) True B) False Answer is B) 8. Which one of the following items is not a consideration when recording periodic depreciation expense on plant assets? A) Salvage value. B) Estimated useful life. C) Cash needed to replace the plant asset. D) Cost Answer is C) 9. The declining-balance method of depreciation produces a(n) A) decreasing depreciation expense each period. B) increasing depreciation expense each period. C) declining percentage rate each period. D) constant amount of depreciation expense each period Answer is B) 10.Interest expense on an interest-bearing note is A) always equal to zero. B) accrued over the life of the note. C) only recorded at the time the note is issued. D) only recorded at maturity when the note is paid Answer is D) 11. A gain or loss on disposal of a plant asset is determined by comparing the A) replacement cost of the asset with the asset's original cost. B) book value of the asset with the asset's original cost.
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ACT 210 final - 1.The declaration of a stock dividend will:...

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