Accounting Question-1

Accounting Question-1 - 1. In the past period, customers...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1. In the past period, customers paid for operas that were performed in the current period. The required adjusting entry recognizes the A. revenue earned but not yet received, and records a receivable B. portion earned as revenue, and reduces the balance of a liability account C. portion of the asset consumed or expensed, and reduces the balance of an asset account D. expense incurred, and records a liability for future payment 2. Which of the following most likely explains why a corporation's stock trades at a very high price-earnings ratio? A. The corporation is large with very low risk B. Investors expect the corporation to have higher earnings in the future C. The corporation has very little long-term debt. D. The corporation has several classes of stock outstanding 3. A bond with a face value of $1,000 is quoted at 105-1/2. The bond is selling for A. $1,000.00 B. $1055.00 C. $1050.50 D. $1105.50 Explanation: Bonds are quoted at a percentage of their face value (or maturity value ). In this case, each bond is selling for $1,055.00 (=$1,000 × 1.055). 4. Liabilities are usually listed on the balance sheet A. in the order of smallest to largest.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
B. in alphabetical order C. in the order in which they were incurred. D. in the order in which they are expected to be repaid. 5. When a retailer purchases inventory under credit terms of 2/10, n/30, the retailer A. can deduct 2% from the invoice price by paying within 30 days of the invoice date B. can deduct 2% from the invoice price by paying on the 10th day of the month following the month of the invoice. C. can deduct 10% from the invoice price by paying within 2 days of the invoice date. D. can deduct 2% from the invoice price by paying within 10 days of the invoice date EXPLANATION:can deduct 2% from the invoice price by paying within 10 days of the invoice date 6. Consider the following: 8% cumulative preferred stock, $100 par value, authorized 50,000 shares, issued 20,000 shares-----$2,000,000 Additional paid-in capital, preferred stock---$500,000 Common stock, $1 par value, authorized 10 million shares, issued 5 million shares--- $5,000,000 Additional paid-in capital, common stock---$1,200,000Retained earnings---$3,200,000 Calculate the total paid-in capital of the corporation. A. $1,700,000
Background image of page 2
B. $11,900,000 C. $4,900,000 D. $8,700,000 Explanation: Total paid-in capital includes the par value of both classes of stock plus any additional paid-in capital from both classes of stock. The total paid-in capital is $8,700,000 (= $2,000,000 + $500,000 + $5,000,000 + $1,200,000). 7. Which of the following is NOT true about net income? A. The company can have a cash shortage and still have net income. B. Net income is an asset.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 9

Accounting Question-1 - 1. In the past period, customers...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online