CHAPTER 9, 10, 11 TRUE FALSE

Question 1 of 60

Medal-premium 1

ALL PLANT ASSETS (FIXED ASSETS) MUST BE DEPRECIATED FOR ACCOUNTING PURPOSES.

Select one of the following:

  • True
  • False

Question 2 of 60

Medal-premium 1

WHEN PURCHASING LAND, THE COSTS FOR CLEARING, DRAINING, FILLING, AND GRADING SHOULD BE CHARGED TO A LAND IMPROVEMENTS ACCOUNT.

Select one of the following:

  • True
  • False

Question 3 of 60

Medal-premium 1

WHEN PURCHASING DELIVERY EQUIPMENT, SALES TAXES AND MOTOR VEHICLE LICENSES SHOULD BE CHARGED TO DELIVERY EQUIPMENT.

Select one of the following:

  • True
  • False

Question 4 of 60

Medal-premium 1

LAND IMPROVEMENTS ARE GENERALLY CHARGED TO THE LAND ACCOUNT.

Select one of the following:

  • True
  • False

Question 5 of 60

Medal-premium 1

ONCE COST IS ESTABLISHED FOR A PLANT ASSET, IT BECOMES THE BASIS OF ACCOUNTING FOR THE ASSET UNLESS THE ASSET APPRECIATES IN VALUE, IN WHICH CASE, MARKET VALUE BECOMES THE BASIS FOR ACCOUNTABILITY.

Select one of the following:

  • True
  • False

Question 6 of 60

Medal-premium 1

THE BOOK VALUE OF A PLANT ASSET IS ALWAYS EQUAL TO ITS FAIR MARKET VALUE.

Select one of the following:

  • True
  • False

Question 7 of 60

Medal-premium 1

RECORDING DEPRECIATION ON PLANT ASSETS AFFECTS THE BALANCE SHEET AND THE INCOME STATEMENT.

Select one of the following:

  • True
  • False

Question 8 of 60

Medal-premium 1

THE DEPRECIABLE COST OF A PLANT ASSET IS ITS ORIGINAL COST MINUS OBSOLESCENCE.

Select one of the following:

  • True
  • False

Question 9 of 60

Medal-premium 1

RECORDING DEPRECIATION EACH PERIOD IS AN APPLICATION OF THE EXPENSE RECOGNITION PRINCIPLE.

Select one of the following:

  • True
  • False

Question 10 of 60

Medal-premium 1

THE ACCUMULATED DEPRECIATION ACCOUNT REPRESENTS A CASH FUND AVAILABLE TO REPLACE PLANT ASSETS.

Select one of the following:

  • True
  • False

Question 11 of 60

Medal-premium 1

IN CALCULATING DEPRECIATION, BOTH PLANT ASSET COST AND USEFUL LIFE ARE BASED ON ESTIMATES.

Select one of the following:

  • True
  • False

Question 12 of 60

Medal-premium 1

USING THE UNITS-OF-ACTIVITY METHOD OF DEPRECIATING FACTORY EQUIPMENT WILL GENERALLY RESULT IN MORE DEPRECIATION EXPENSE BEING RECORDED OVER THE LIFE OF THE ASSET THAN IF THE STRAIGHT-LINE METHOD HAD BEEN USED.

Select one of the following:

  • True
  • False

Question 13 of 60

Medal-premium 1

SALVAGE VALUE IS NOT SUBTRACTED FROM PLANT ASSET COST IN DETERMINING DEPRECIATION EXPENSE UNDER THE DECLINING-BALANCE METHOD OF DEPRECIATION.

Select one of the following:

  • True
  • False

Question 14 of 60

Medal-premium 1

THE DECLINING-BALANCE METHOD OF DEPRECIATION IS CALLED AN ACCELERATED DEPRECIATION METHOD BECAUSE IT DEPRECIATES AN ASSET IN A SHORTER PERIOD OF TIME THAN THE ASSET'S USEFUL LIFE.

Select one of the following:

  • True
  • False

Question 15 of 60

Medal-premium 1

UNDER THE DOUBLE-DECLINING-BALANCE METHOD, THE DEPRECIATION RATE USED EACH YEAR REMAINS CONSTANT.

Select one of the following:

  • True
  • False

Question 16 of 60

Medal-premium 1

THE IRS DOES NOT REQUIRE THE TAXPAYER TO USE THE SAME DEPRECIATION METHOD ON THE TAX RETURN THAT IS USED IN PREPARING FINANCIAL STATEMENTS.

Select one of the following:

  • True
  • False

Question 17 of 60

Medal-premium 1

A CHANGE IN THE ESTIMATED USEFUL LIFE OF A PLANT ASSET MAY CAUSE A CHANGE IN THE AMOUNT OF DEPRECIATION RECOGNIZED IN THE CURRENT AND FUTURE PERIODS, BUT NOT TO PRIOR PERIODS.

Select one of the following:

  • True
  • False

Question 18 of 60

Medal-premium 1

A CHANGE IN THE ESTIMATED SALVAGE VALUE OF A PLANT ASSET REQUIRES A RESTATEMENT OF PRIOR YEARS' DEPRECIATION.

Select one of the following:

  • True
  • False

Question 19 of 60

Medal-premium 1

TO DETERMINE A NEW DEPRECIATION AMOUNT AFTER A CHANGE IN ESTIMATE OF A PLANT ASSET'S USEFUL LIFE, THE ASSET'S REMAINING DEPRECIABLE COST IS DIVIDED BY ITS REMAINING USEFUL LIFE.

Select one of the following:

  • True
  • False

Question 20 of 60

Medal-premium 1

ADDITIONS AND IMPROVEMENTS TO A PLANT ASSET THAT INCREASE THE ASSET'S OPERATING EFFICIENCY, PRODUCTIVE CAPACITY, OR EXPECTED USEFUL LIFE ARE GENERALLY EXPENSED IN THE PERIOD INCURRED.

Select one of the following:

  • True
  • False

Question 21 of 60

Medal-premium 1

A CURRENT LIABILITY MUST BE PAID OUT OF CURRENT EARNINGS

Select one of the following:

  • True
  • False

Question 22 of 60

Medal-premium 1

CURRENT LIABILITIES ARE EXPECTED TO BE PAID WITHIN ONE YEAR OF THE OPERATING CYCLE, WHICHEVER IS LONGER

Select one of the following:

  • True
  • False

Question 23 of 60

Medal-premium 1

THE RELATIONSHIP BETWEEN CURRENT LIABILITIES AND CURRENT ASSETS IS IMPORTANT IN EVALUATING A COMPANY'S ABILITY TO PAY OFF ITS LONG-TERM DEBT

Select one of the following:

  • True
  • False

Question 24 of 60

Medal-premium 1

A COMPANY WHOSE CURRENT LIABILITIES EXCEED ITS CURRENT ASSETS MAY HAVE A LIQUIDITY PROBLEM

Select one of the following:

  • True
  • False

Question 25 of 60

Medal-premium 1

NOTES PAYABLE USUALLY REQUIRE THE BORROWER TO PAY INTEREST

Select one of the following:

  • True
  • False

Question 26 of 60

Medal-premium 1

NOTES PAYABLE ARE OFTEN USED INSTEAD OF ACCOUNTS PAYABLE

Select one of the following:

  • True
  • False

Question 27 of 60

Medal-premium 1

A NOTE PAYABLE MUST ALWAYS BE PAID BEFORE AN ACCOUNT PAYABLE

Select one of the following:

  • True
  • False

Question 28 of 60

Medal-premium 1

A $60,000, 8%, 9-MONTH NOTE PAYABLE REQUIRES AN INTEREST PAYMENT OF $3,600 AT MATURITY

Select one of the following:

  • True
  • False

Question 29 of 60

Medal-premium 1

MOST NOTES ARE NOT INTEREST BEARING

Select one of the following:

  • True
  • False

Question 30 of 60

Medal-premium 1

WITH AN INTEREST-BEARING NOTE, THE AMOUNT OF CASH RECEIVED UPON ISSUANCE OF THE NOTE GENERALLY EXCEEDS THE NOTE'S FACE VALUE

Select one of the following:

  • True
  • False

Question 31 of 60

Medal-premium 1

INTEREST EXPENSE ON A NOTE PAYABLE IS ONLY RECORDED AT MATURITY

Select one of the following:

  • True
  • False

Question 32 of 60

Medal-premium 1

INTEREST EXPENSE IS REPORTED UNDER OTHER EXPENSES AND LOSSES IN THE INCOME STATEMENT

Select one of the following:

  • True
  • False

Question 33 of 60

Medal-premium 1

UNEARNED REVENUES SHOULD BE CLASSIFIED AS OTHER REVENUES AND GAINS ON THE INCOME STATEMENT

Select one of the following:

  • True
  • False

Question 34 of 60

Medal-premium 1

THE HIGHER THE SALES TAX RATE, THE MORE PROFIT A RETAILER CAN EARN

Select one of the following:

  • True
  • False

Question 35 of 60

Medal-premium 1

METROPOLITAN SYMPHONY SELLS 200 SEASON TICKETS FOR $50,000 THAT REPRESENTS A FIVE CONCERT SEASON. THE AMOUNT OF UNEARNED TICKET REVENUE AFTER THE SECOND CONCERT IS $20,000

Select one of the following:

  • True
  • False

Question 36 of 60

Medal-premium 1

DURING THE MONTH, A COMPANY SELLS GOODS FOR A TOTAL OF $108,000 WHICH INCLUDES SALES TAXES OF $8,000; THEREFORE, THE COMPANY SHOULD RECOGNIZE $100,000 IN SALES REVENUES AND $8,000 IN SALES TAX EXPENSE

Select one of the following:

  • True
  • False

Question 37 of 60

Medal-premium 1

CURRENT MATURITIES OF LONG-TERM DEBT REFERS TO THE AMOUNT OF INTEREST ON A NOTE PAYABLE THAT MUST BE PAID IN THE CURRENT YEAR

Select one of the following:

  • True
  • False

Question 38 of 60

Medal-premium 1

THE CURRENT RATIO PERMITS ANALYSTS TO COMPARE THE LIQUIDITY OF DIFFERENT SIZED COMPANIES

Select one of the following:

  • True
  • False

Question 39 of 60

Medal-premium 1

WORKING CAPITAL IS CURRENT ASSETS DIVIDED BY CURRENT LIABILITIES

Select one of the following:

  • True
  • False

Question 40 of 60

Medal-premium 1

FICA TAXES WITHHELD AND FEDERAL INCOME INCOME TAXES WITHHELD ARE MANDATORY PAYROLL DEDUCTIONS

Select one of the following:

  • True
  • False

Question 41 of 60

Medal-premium 1

A CORPORATION IS NOT AN ENTITY WHICH IS SEPARATE AND DISTINCT FROM ITS OWNERS.

Select one of the following:

  • True
  • False

Question 42 of 60

Medal-premium 1

A CORPORATION CAN BE ORGANIZED FOR THE PURPOSE OF MAKING A PROFIT OR IT MAY BE NOT-FOR-PROFIT.

Select one of the following:

  • True
  • False

Question 43 of 60

Medal-premium 1

A CORPORATION ACTS UNDER ITS OWN NAME RATHER THAN IN THE NAME OF ITS STOCKHOLDERS.

Select one of the following:

  • True
  • False

Question 44 of 60

Medal-premium 1

IF A CORPORATION PAYS TAXES ON ITS INCOME, THEN STOCKHOLDERS WILL NOT HAVE TO PAY TAXES ON THE DIVIDENDS RECEIVED FROM THAT CORPORATION.

Select one of the following:

  • True
  • False

Question 45 of 60

Medal-premium 1

A CORPORATION MUST BE INCORPORATED IN EACH STATE IN WHICH IT DOES BUSINESS.

Select one of the following:

  • True
  • False

Question 46 of 60

Medal-premium 1

A STICKHOLDER HAS THE RIGHT TO VOTE IN THE ELECTION OF THE BOARD OF DIRECTORS.

Select one of the following:

  • True
  • False

Question 47 of 60

Medal-premium 1

A PROXY IS A LEGAL DOCUMENT THAT INSTRUCTS A STOCKHOLDER'S AGENT HOW TO VOTE SHARES OF STOCK FOR THE STOCKHOLDER.

Select one of the following:

  • True
  • False

Question 48 of 60

Medal-premium 1

AS SOON AS A CORPORATION IS AUTHORIZED TO ISSUE STOCK, AN ACCOUNTING JOURNAL ENTRY SHOULD BE MADE RECORDING THE TOTAL VALUE OF THE SHARES AUTHORIZED.

Select one of the following:

  • True
  • False

Question 49 of 60

Medal-premium 1

THE PAR VALUE OF COMMON STOCK MUST ALWAYS BE EQUAL TO ITS MARKET VALUE ON THE DATE THE STOCK IS ISSUED.

Select one of the following:

  • True
  • False

Question 50 of 60

Medal-premium 1

WHEN NO-PAR VALUE STOCK DOES NOT HAVE A STATED VALUE, THE ENTIRE PROCEEDS FROM THE ISSUANCE OF THE STOCK BECOMES LEGAL CAPITAL.

Select one of the following:

  • True
  • False

Question 51 of 60

Medal-premium 1

A CORPORATION CAN ISSUE MORE SHARES THAN IT IS AUTHORIZED IN ITS CHARTER, IF THE BOARD OF DIRECTORS APPROVES OF AN INCREASE IN THE NUMBER OF AUTHORIZED SHARES.

Select one of the following:

  • True
  • False

Question 52 of 60

Medal-premium 1

THE MARKET VALUE OF A CORPORATION'S STOCK IS DETERMINED BY THE NUMBER OF SHARES THAT THE CORPORATION HAS BEEN AUTHORIZED TO ISSUE.

Select one of the following:

  • True
  • False

Question 53 of 60

Medal-premium 1

STOCK CAN BE ISSUED ONLY IN EXCHANGE FOR CASH.

Select one of the following:

  • True
  • False

Question 54 of 60

Medal-premium 1

THE PAR VALUE OF STOCK ISSUED FOR NON-CASH ASSETS IS NEVER A FACTOR IN DETERMINING THE COST OF THE ASSETS RECEIVED.

Select one of the following:

  • True
  • False

Question 55 of 60

Medal-premium 1

THE ACQUISITION OF TREASURY STOCK BY A CORPORATION INCREASES TOTAL ASSETS AND TOTAL STOCKHOLDERS' EQUITY.

Select one of the following:

  • True
  • False

Question 56 of 60

Medal-premium 1

TREASURY STOCK SHOULD NOT BE CLASSIFIED AS A CURRENT ASSET.

Select one of the following:

  • True
  • False

Question 57 of 60

Medal-premium 1

TREASURY STOCK PURCHASED FOR $25 PER SHARE THAT IS REISSUED AT $20 PER SHARE, RESULTS IN A LOSS ON SALE OF TREASURY STOCK BEING RECOGNIZED ON THE INCOME STATEMENT.

Select one of the following:

  • True
  • False

Question 58 of 60

Medal-premium 1

TREASURY STOCK IS A CONTRA STOCLHOLDERS' EQUITY ACCOUNT.

Select one of the following:

  • True
  • False

Question 59 of 60

Medal-premium 1

THE NUMBER OF COMMON SHARES OUTSTANDING CAN NEVER BE GREATER THAN THE NUMBER OF SHARES ISSUED.

Select one of the following:

  • True
  • False

Question 60 of 60

Medal-premium 1

PREFERRED STOCK HAS CONTRACTUAL PREFERENCE OVER COMMON STOCK IN CERTAIN AREAS.

Select one of the following:

  • True
  • False
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CHAPTER 9, 10, 11 TRUE FALSE

Natalie Balzert
Quiz by , created about 2 years ago

Quiz on CHAPTER 9, 10, 11 TRUE FALSE, created by Natalie Balzert on 05/11/2014.

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Natalie Balzert
Created by Natalie Balzert about 2 years ago
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