Practice_Test_Questions_ch10and11blank2011-1

Practice_Test_Questions_ch10and11blank2011-1 - Practice...

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Practice TEST Questions Ch 10 and 11 1. All leases are classified as either a. capital leases or long-term leases. b. capital leases or operating leases. c. operating leases or current leases, d. long-term leases or current leases. 2. Raven Company borrowed $100,000 cash on September 1, 2010, and signed a one-year 12% interest-bearing note payable. The required adjusting entry at the end of the accounting period, December 31, 2010, would be: a. Interest expense 4,000 Interest payable 4,000 b. Interest expense 12,000 Interest payable 12,000 c. Notes payable 100,000 Interest expense 12,000 Cash 112,000 d. Interest payable 4,000 Interest expense 4,000 3. The federal government requires a. only the employer to pay FICA taxes b. only the employee to pay FICA taxes c. both the employer and the employee to pay FICA taxes d. neither the employer nor the employee to pay FICA taxes e. only corporations to pay FICA taxes 4. Conway Company issued $50,000 bonds payable, 9% annual interest, maturity in ten years. The bonds were sold at 96. Conway uses straight-line amortization. The amount of interest expense each full year would be a. $4,700 b. $4,300 c. $4,500 d. $4,680 e. None of the above is correct 5. The amortization of bond premium by the issuer will a. increase interest expense b. decrease interest expense c. have no effect on interest expense d. determine the cash paid for interest e. None of the above is correct
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6. If a bond payable is sold (issued) at a discount, the amount of the carrying value (the long-term liability) reported on the subsequent balance sheets a. remains constant b increases each year c. decreases each year d. changes from year to year depending upon the market rate of interest each year. e. None of the above is correct 7. Common stockholders have the right to a. sell their stock b. share in any dividends distributed to common stockholders. c. have the first opportunity to purchase any additional shares of common stock issued by the corporation. d. vote at stockholders’ meetings. e. All of the above are true. 8. Which of the following represents the shares currently in the hands of investors? a. Authorized shares b. Issued shares c. Outstanding shares d. Unissued shares e. Treasury shares 9. If Golts Corporation sells and issues 100 shares of its $10 par value common stock at $11 per share, the entry to record the sale will not include a a. Debit to cash of $1,100 b. Credit to contributed capital in excess of par of $100 c. Credit to common stock of $1,000 d. Credit to retained earnings of $100 e. All of the above would be included
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This note was uploaded on 12/05/2011 for the course ACCT 207 taught by Professor Hudchinson during the Fall '08 term at University of Delaware.

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Practice_Test_Questions_ch10and11blank2011-1 - Practice...

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