Question 1: The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called:
A. depletion.
B. deferral.
C. amortization.
D. depreciation.
Question 2: The market interest rate related to a bond is also called the:
A. stated interest rate.
B. effective interest rate.
C. contract interest rate.
D. straight-line rate.
Question 3: A company sold office furniture costing $16,500 with accumulated depreciation of $14,000 for $1,800 cash. The entry to record the sale would include:
A. a loss for $700.
B. an increase in accumulated depreciation for $14,000.
C. a total decrease in office furniture for $2,500.
D. a decrease in cash for $1,800.
Question 4: The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called:
A. depletion.
B. deferral.
C. amortization.
D. depreciation.
Question 5: Which of the following is not an intangible asset?
A. Goodwill
B. Trademark
C. Copyright
D. Long-term receivable
Question 6: A bond is simply a form of an interest-bearing note.
A. true
B. False
Question 7: What options does a business have while financing its operations?
A. Debt financing
B. Equity financing
C. Asset financing
D. Both debt financing and equity financing
Question 8: Expenditures made to extend an asset's life are called revenue expenditures.
A. True
B. False
Question 9: The exclusive right to use a certain name or symbol is called a:
A. franchise.
B. patent.
C. trademark.
D. copyright.
Question 10: The accounting term depreciation measures:
A. the decline in an asset's market value.
B. the amount of cash a company sets aside for asset replacement.
C. the amount of asset cost allocated to expense over periods benefited.
D. the anticipated loss if asset is sold in the used-asset market.
Question 11: If paid-in capital in excess of par-preferred stock is $80,000, preferred stock is $500,000, paid-in capital in excel of par-common stock is $50,000, common stock is $1,000,000, and retained earnings is $230,000, the total stockholders' equity is $1,860,000.
A. True
B. False
Question 12: A current liability is a debt that is reasonable expected to be paid:
A. between 6 months and 18 months.
B. out of currently recognized revenues.
C. within one year.
D. out of cash currently on hand.
Question 13: Which of the following is a reason to undergo a reverse stock split?
A. To reduce the stock's market price per share.
B. To increase total stockholders' equity.
C. To reduce total stockholders' equity.
D. To increase the market value of the stock per share.
Question 14: Stockholders' equity:
A. is usually equal to cash on hand.
B. includes paid-in capital and total liabilities.
C. includes retained earnings and paid-in capital.
D. is shown on the income statement.
Question 15: A current liability is a debt that is reasonable expected to be paid:
A. between 6 months and 18 months.
B. out of currently recognized revenues.
C. within one year.
D. out of cash currently on hand.
Question 16: Fixed assets are reported at their book value on the balance sheet.
In
A. True
B. False
Question 17: Which of the following expenditures would not be included in the cost of a fixed asset?
A. Freight costs
B. Vandalism
C. Sales taxes
D. Surveying fees
Question 18: The balance in Accumulated Depreciation account is deducted from the cost of fixed assets on the balance sheet.
A. True
B. False
Question 19: For the year that just ended, a company reports net income of $1,500,000. There are 500,000 shares authorized, 300,000 shares issued, and 250,000 shares of common stock outstanding. What is the earnings per share?
A.$5.00
B.$2.50
C.$6.00
D.$3.00
Question 20: Which of the following is a reason to undergo a reverse stock split?
A. To reduce the stock's market price per share.
B. To increase total stockholders' equity.
C. To reduce total stockholders' equity.
D. To increase the market value of the stock per share.