1)Ruben Company purchased $100,000 of Evans Company bonds at 100 plus $1,500 in accrued interest. The bond interest rate is 8% and interest is paid semi-annually. The journal entry to record the receipt of interest on the next interest payment date would be:
a. Debit: Cash $4,000; Credit: Interest Receivable $1,500 and Interest Revenue $2,500
b. Debit: Cash $4,000; Credit: Interest Receivable $4,000
c. Debit: Cash $4,000; Credit: Interest Revenue $4,000
d. Debit: Cash $2,500; Credit: Interest Revenue $2,500
2) Temporary investments
a. are reported as current assets
b. include cash equivalents
c. do not include equity securities
d. all of the above
3) Investment is certificates of deposit and other securities that do not change in value are reported in the balance sheet as:
a. available-for-sale securities
b. cash and cash equivalents
c. equity investments
d. held to maturity securities
4) The master budget is an integrated set of budgets that tie together a company's operating, financing and investing activities into an integrated plan for the coming year.
a. true
b. false
6) Comprehensive income does not affect net income or retained earnings.
a. true
b. false