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CHAPTER 9, 10, 11 TRUE FALSE
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Questions in this quiz (60)
1ALL PLANT ASSETS (FIXED ASSETS) MUST BE DEPRECIATED FOR ACCOUNTING PURPOSES.
- ATrue
- BFalse
2WHEN PURCHASING LAND, THE COSTS FOR CLEARING, DRAINING, FILLING, AND GRADING SHOULD BE CHARGED TO A LAND IMPROVEMENTS ACCOUNT.
- ATrue
- BFalse
3WHEN PURCHASING DELIVERY EQUIPMENT, SALES TAXES AND MOTOR VEHICLE LICENSES SHOULD BE CHARGED TO DELIVERY EQUIPMENT.
- ATrue
- BFalse
4LAND IMPROVEMENTS ARE GENERALLY CHARGED TO THE LAND ACCOUNT.
- ATrue
- BFalse
5ONCE 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.
- ATrue
- BFalse
6THE BOOK VALUE OF A PLANT ASSET IS ALWAYS EQUAL TO ITS FAIR MARKET VALUE.
- ATrue
- BFalse
7RECORDING DEPRECIATION ON PLANT ASSETS AFFECTS THE BALANCE SHEET AND THE INCOME STATEMENT.
- ATrue
- BFalse
8THE DEPRECIABLE COST OF A PLANT ASSET IS ITS ORIGINAL COST MINUS OBSOLESCENCE.
- ATrue
- BFalse
9RECORDING DEPRECIATION EACH PERIOD IS AN APPLICATION OF THE EXPENSE RECOGNITION PRINCIPLE.
- ATrue
- BFalse
10THE ACCUMULATED DEPRECIATION ACCOUNT REPRESENTS A CASH FUND AVAILABLE TO REPLACE PLANT ASSETS.
- ATrue
- BFalse
11IN CALCULATING DEPRECIATION, BOTH PLANT ASSET COST AND USEFUL LIFE ARE BASED ON ESTIMATES.
- ATrue
- BFalse
12USING 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.
- ATrue
- BFalse
13SALVAGE VALUE IS NOT SUBTRACTED FROM PLANT ASSET COST IN DETERMINING DEPRECIATION EXPENSE UNDER THE DECLINING-BALANCE METHOD OF DEPRECIATION.
- ATrue
- BFalse
14THE 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.
- ATrue
- BFalse
15UNDER THE DOUBLE-DECLINING-BALANCE METHOD, THE DEPRECIATION RATE USED EACH YEAR REMAINS CONSTANT.
- ATrue
- BFalse
16THE IRS DOES NOT REQUIRE THE TAXPAYER TO USE THE SAME DEPRECIATION METHOD ON THE TAX RETURN THAT IS USED IN PREPARING FINANCIAL STATEMENTS.
- ATrue
- BFalse
17A 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.
- ATrue
- BFalse
18A CHANGE IN THE ESTIMATED SALVAGE VALUE OF A PLANT ASSET REQUIRES A RESTATEMENT OF PRIOR YEARS' DEPRECIATION.
- ATrue
- BFalse
19TO 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.
- ATrue
- BFalse
20ADDITIONS 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.
- ATrue
- BFalse
21A CURRENT LIABILITY MUST BE PAID OUT OF CURRENT EARNINGS
- ATrue
- BFalse
22CURRENT LIABILITIES ARE EXPECTED TO BE PAID WITHIN ONE YEAR OF THE OPERATING CYCLE, WHICHEVER IS LONGER
- ATrue
- BFalse
23THE RELATIONSHIP BETWEEN CURRENT LIABILITIES AND CURRENT ASSETS IS IMPORTANT IN EVALUATING A COMPANY'S ABILITY TO PAY OFF ITS LONG-TERM DEBT
- ATrue
- BFalse
24A COMPANY WHOSE CURRENT LIABILITIES EXCEED ITS CURRENT ASSETS MAY HAVE A LIQUIDITY PROBLEM
- ATrue
- BFalse
25NOTES PAYABLE USUALLY REQUIRE THE BORROWER TO PAY INTEREST
- ATrue
- BFalse
26NOTES PAYABLE ARE OFTEN USED INSTEAD OF ACCOUNTS PAYABLE
- ATrue
- BFalse
27A NOTE PAYABLE MUST ALWAYS BE PAID BEFORE AN ACCOUNT PAYABLE
- ATrue
- BFalse
28A $60,000, 8%, 9-MONTH NOTE PAYABLE REQUIRES AN INTEREST PAYMENT OF $3,600 AT MATURITY
- ATrue
- BFalse
29MOST NOTES ARE NOT INTEREST BEARING
- ATrue
- BFalse
30WITH AN INTEREST-BEARING NOTE, THE AMOUNT OF CASH RECEIVED UPON ISSUANCE OF THE NOTE GENERALLY EXCEEDS THE NOTE'S FACE VALUE
- ATrue
- BFalse
31INTEREST EXPENSE ON A NOTE PAYABLE IS ONLY RECORDED AT MATURITY
- ATrue
- BFalse
32INTEREST EXPENSE IS REPORTED UNDER OTHER EXPENSES AND LOSSES IN THE INCOME STATEMENT
- ATrue
- BFalse
33UNEARNED REVENUES SHOULD BE CLASSIFIED AS OTHER REVENUES AND GAINS ON THE INCOME STATEMENT
- ATrue
- BFalse
34THE HIGHER THE SALES TAX RATE, THE MORE PROFIT A RETAILER CAN EARN
- ATrue
- BFalse
35METROPOLITAN 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
- ATrue
- BFalse
36DURING 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
- ATrue
- BFalse
37CURRENT MATURITIES OF LONG-TERM DEBT REFERS TO THE AMOUNT OF INTEREST ON A NOTE PAYABLE THAT MUST BE PAID IN THE CURRENT YEAR
- ATrue
- BFalse
38THE CURRENT RATIO PERMITS ANALYSTS TO COMPARE THE LIQUIDITY OF DIFFERENT SIZED COMPANIES
- ATrue
- BFalse
39WORKING CAPITAL IS CURRENT ASSETS DIVIDED BY CURRENT LIABILITIES
- ATrue
- BFalse
40FICA TAXES WITHHELD AND FEDERAL INCOME INCOME TAXES WITHHELD ARE MANDATORY PAYROLL DEDUCTIONS
- ATrue
- BFalse
41A CORPORATION IS NOT AN ENTITY WHICH IS SEPARATE AND DISTINCT FROM ITS OWNERS.
- ATrue
- BFalse
42A CORPORATION CAN BE ORGANIZED FOR THE PURPOSE OF MAKING A PROFIT OR IT MAY BE NOT-FOR-PROFIT.
- ATrue
- BFalse
43A CORPORATION ACTS UNDER ITS OWN NAME RATHER THAN IN THE NAME OF ITS STOCKHOLDERS.
- ATrue
- BFalse
44IF A CORPORATION PAYS TAXES ON ITS INCOME, THEN STOCKHOLDERS WILL NOT HAVE TO PAY TAXES ON THE DIVIDENDS RECEIVED FROM THAT CORPORATION.
- ATrue
- BFalse
45A CORPORATION MUST BE INCORPORATED IN EACH STATE IN WHICH IT DOES BUSINESS.
- ATrue
- BFalse
46A STICKHOLDER HAS THE RIGHT TO VOTE IN THE ELECTION OF THE BOARD OF DIRECTORS.
- ATrue
- BFalse
47A PROXY IS A LEGAL DOCUMENT THAT INSTRUCTS A STOCKHOLDER'S AGENT HOW TO VOTE SHARES OF STOCK FOR THE STOCKHOLDER.
- ATrue
- BFalse
48AS SOON AS A CORPORATION IS AUTHORIZED TO ISSUE STOCK, AN ACCOUNTING JOURNAL ENTRY SHOULD BE MADE RECORDING THE TOTAL VALUE OF THE SHARES AUTHORIZED.
- ATrue
- BFalse
49THE PAR VALUE OF COMMON STOCK MUST ALWAYS BE EQUAL TO ITS MARKET VALUE ON THE DATE THE STOCK IS ISSUED.
- ATrue
- BFalse
50WHEN NO-PAR VALUE STOCK DOES NOT HAVE A STATED VALUE, THE ENTIRE PROCEEDS FROM THE ISSUANCE OF THE STOCK BECOMES LEGAL CAPITAL.
- ATrue
- BFalse
51A 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.
- ATrue
- BFalse
52THE MARKET VALUE OF A CORPORATION'S STOCK IS DETERMINED BY THE NUMBER OF SHARES THAT THE CORPORATION HAS BEEN AUTHORIZED TO ISSUE.
- ATrue
- BFalse
53STOCK CAN BE ISSUED ONLY IN EXCHANGE FOR CASH.
- ATrue
- BFalse
54THE PAR VALUE OF STOCK ISSUED FOR NON-CASH ASSETS IS NEVER A FACTOR IN DETERMINING THE COST OF THE ASSETS RECEIVED.
- ATrue
- BFalse
55THE ACQUISITION OF TREASURY STOCK BY A CORPORATION INCREASES TOTAL ASSETS AND TOTAL STOCKHOLDERS' EQUITY.
- ATrue
- BFalse
56TREASURY STOCK SHOULD NOT BE CLASSIFIED AS A CURRENT ASSET.
- ATrue
- BFalse
57TREASURY 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.
- ATrue
- BFalse
58TREASURY STOCK IS A CONTRA STOCLHOLDERS' EQUITY ACCOUNT.
- ATrue
- BFalse
59THE NUMBER OF COMMON SHARES OUTSTANDING CAN NEVER BE GREATER THAN THE NUMBER OF SHARES ISSUED.
- ATrue
- BFalse
60PREFERRED STOCK HAS CONTRACTUAL PREFERENCE OVER COMMON STOCK IN CERTAIN AREAS.
- ATrue
- BFalse
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- Description
- Quiz on CHAPTER 9, 10, 11 TRUE FALSE, created by Natalie Balzert on 05/11/2014.
- Author
- Natalie Balzert
- Language
- English
- Views
- 651
- History
- Created on 5 Nov 2014 · updated on 3 Feb 2018
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