Week 7 Quiz Questions
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Multiple Choice Question 178 |
To qualify as natural resources in the accounting sense, assets must be
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A |
replaceable. |
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B |
underground. |
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C |
of a mineral nature. |
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D |
physically extracted in operations. |
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Multiple Choice Question 122 |
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Sargent Corporation bought equipment on January 1, 2013. The equipment cost $180,000 and had an expected salvage value of $30,000. The life of the equipment was estimated to be 6 years. The book value of the equipment at the beginning of the third year using straight-line depreciation would be
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A |
$180,000. |
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B |
$130,000. |
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C |
$150,000. |
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D |
$50,000. |
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Multiple Choice Question 207 |
Rooney Company incurred $420,000 of research and development cost in its laboratory to develop a patent granted on January 1, 2013. On July 31, 2013, Rooney paid $63,000 for legal fees in a successful defense of the patent. The total amount debited to Patents through July 31, 2013, should be:
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A |
$420,000. |
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B |
$63,000. |
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C |
$483,000. |
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D |
$357,000. |
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Multiple Choice Question 92 |
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Useful life is expressed in terms of use expected from the asset under the
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A |
straight-line method. |
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B |
declining-balance method. |
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C |
units-of-activity method. |
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D |
none of these. |
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Multiple Choice Question 114 |
Moreno Company purchased equipment for $675,000 on January 1, 2012, and will use the double-declining-balance method of depreciation. It is estimated that the equipment will have a 3-year life and a $30,000 salvage value at the end of its useful life. The amount of depreciation expense recognized in the year 2014 will be
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A |
$75,000. |
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B |
$51,660. |
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C |
$45,000. |
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D |
$81,660. |
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Multiple Choice Question 158 |
The book value of an asset will equal its fair market value at the date of sale if
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A |
a gain on disposal is recorded. |
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B |
the plant asset is fully depreciated. |
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C |
no gain or loss on disposal is recorded. |
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D |
a loss on disposal is recorded. |
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Multiple Choice Question 154 |
If disposal of a plant asset occurs during the year, depreciation is
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A |
not recorded if the asset is scrapped. |
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B |
recorded for the fraction of the year to the date of the disposal. |
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C |
recorded for the whole year. |
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D |
not recorded for the year. |
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Multiple Choice Question 141 |
A major disadvantage resulting from the use of bonds is that
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A |
interest must be paid on a periodic basis. |
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B |
bondholders have voting rights. |
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C |
taxes may increase. |
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D |
earnings per share may be lowered. |
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Multiple Choice Question 173 |
A $600,000 bond was retired at 103 when the carrying value of the bond was $622,000. The entry to record the retirement would include a
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A |
gain on bond redemption of $18,000. |
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B |
gain on bond redemption of $4,000. |
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C |
loss on bond redemption of $18,000. |
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D |
loss on bond redemption of $12,000. |
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Multiple Choice Question 199 |
The 2013 financial statements of Marker Co. contain the following selected data (in millions).
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Current Assets |
$75 |
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Total Assets |
140 |
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Current Liabilities |
40 |
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Total Liabilities |
95 |
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Cash |
8 |
The debt to total assets ratio is
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A |
67.9%. |
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B |
256%. |
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C |
28.6%. |
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D |
96.4%. |
On September 1, Joe’s Painting Service borrows $100,000 from National Bank on a 4-month, $100,000, 6% note. What entry must Joe’s Painting Service make on December 31 before financial statements are prepared?
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A |
Interest Expense2,000 Notes Payable2,000 |
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B |
Interest Expense2,000 Interest Payable2,000 |
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C |
Interest Payable2,000 Interest Expense2,000 |
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D |
Interest Expense6,000 Interest Payable6,000 |
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Multiple Choice Question 65 |
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The relationship of current assets to current liabilities is used in evaluating a company’s
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A |
long-range solvency. |
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B |
operating cycle. |
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C |
revenue-producing ability. |
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D |
short-term debt paying ability. |
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Multiple Choice Question 160 |
Each of the following accounts is reported as long-term liabilities except
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A |
Discount on Bonds Payable. |
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B |
Bonds Payable. |
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C |
Premium on Bonds Payable. |
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D |
Interest Payable. |
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Multiple Choice Question 67 |
In most companies, current liabilities are paid within
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A |
the operating cycle through the creation of other current liabilities. |
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B |
one year through the creation of other current liabilities. |
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C |
one year or the operating cycle out of current assets. |
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D |
the operating cycle out of current assets. |
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Multiple Choice Question 157 |
Hernandez Corporation issues 3,000, 10-year, 8%, $1,000 bonds dated January 1, 2013, at 98. The journal entry to record the issuance will show a
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A |
debit to Cash for $2,960,000. |
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B |
debit to Cash of $3,000,000. |
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C |
credit to Discount on Bonds Payable for $60,000. |
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D |
credit to Bonds Payable for $3,040,000. |