Question: What type of account is Discount on Notes Receivable?
Answer Choices:
A. contra – revenue account
B. contra – asset account
C. liability account
D. expense account
Answer: B. contra – asset account
Question: What type of account is Discount on Notes Receivable?
Answer Choices:
A. contra–revenue account
B. contra–asset account
C. liability account
D. expense account
Answer: B. contra–asset account
Question: C&S Corporation issued 2,300 shares of its $6 par value common stock for $16 per share. What amount would they record as additional paid-in capital in excess of par – common?
Answer Choices:
A. $2,300
B. $23,000
C. $36,800
D. $13,800
Answer: B. $23,000
Question: When a company carries forward a net operating loss (NOL), the income tax expense will be reduced in future years, but not income tax payable.
Answer Choices:
True
False
Answer: True
Question: L & J purchased common shares of Company A and B for $10,000 and $10,000, respectively, on 12/15. L & J intends to sell these securities within 30 days. At 12/31, Investments in Company A & B had a fair value of $9,000 and $15,000, respectively. L & J does not have significant influence over the investees. Assuming an existing $1,400 credit balance in Fair Value Adjustment – Equity Investments, what is the unrealized gain or loss for these securities and how is it reported?
Answer Choices:
A. Unrealized Gain of $1,400, reported as part of Net Income
B. Unrealized Gain of $1,400, reported as part of Other Comprehensive Income
C. Unrealized Gain of $5,400, reported as part of Other Comprehensive Income
D. Unrealized Gain of $5,400, reported as part of Net Income
Answer: D. Unrealized Gain of $5,400, reported as part of Net Income
Question: C&S Corporation issued 2,300 shares of its $6 par value common stock for $16 per share. What amount would they record as additional paid – in capital in excess of par – common?
Answer Choices:
A. $2,300
B. $23,000
C. $36,800
D. $13,800
Answer: B. $23,000
Question: Other comprehensive income includes income items that bypass the income statement.
Answer Choices:
True
False
Answer: True
Question: L & J purchased common shares of Company A and B for $10,000 and $10,000, respectively on 12/15. L & J intends to sell these securities within 30 days. At 12/31, Investments in Company A & B had a fair value of $9,000 and $15,000, respectively. L & J does not have significant influence over the investees. Assuming an existing $1,400 credit balance in Fair Value Adjustment – Equity Investments, what is the unrealized gain or loss for these securities and how is it reported?
Answer Choices:
A. Unrealized Gain of $1,400, reported as part of Net Income
B. Unrealized Gain of $1,400, reported as part of Other Comprehensive Income
C. Unrealized Gain of $5,400, reported as part of Other Comprehensive Income
D. Unrealized Gain of $5,400, reported as part of Net Income
Answer: D. Unrealized Gain of $5,400, reported as part of Net Income
Question: Danio Fisheries issued 260,000 shares of $10 par value stock. The book value of Danio’s common stockholders’ equity is equal to $40 million. On August 1, Danio Fisheries implements a two-for-one stock split. After the stock split, the par value per share is ________ and the total book value is ________.
Answer Choices:
A. $10; $20 million
B. $5; $80 million
C. $5; $40 million
D. $20; $40 million
Answer: C. $5; $40 million
Question: If a company has elected the fair value option, where are gains and losses resulting from adjusting these accounts to fair value reported?
Answer Choices:
A. Unrealized Gains are reported as part of Other Comprehensive Income while Unrealized losses are reported as part of Net Income
B. Unrealized Gains and Losses are both reported as part of Other Comprehensive Income
C. Unrealized Gains and Losses are both reported as part of Net Income
D. Unrealized Gains are reported as part of Net Income, while Unrealized Losses are reported as part of Other Comprehensive Income
Answer: C. Unrealized Gains and Losses are both reported as part of Net Income
Question: If a company has elected the fair value option, where are gains and losses resulting from adjusting these accounts to fair value reported?
Answer Choices:
A. Unrealized Gains are reported as part of Other Comprehensive Income while Unrealized losses are reported as part of Net Income.
B. Unrealized Gains and Losses are both reported as part of Other Comprehensive Income.
C. Unrealized Gains and Losses are both reported as part of Net Income.
D. Unrealized Gains are reported as part of Net Income, while Unrealized Losses are reported as part of Other Comprehensive Income.
Answer: C. Unrealized Gains and Losses are both reported as part of Net Income.
Question: What type of account is Discount on Notes Receivable?
Answer Choices:
A. Contra – revenue account
B. Contra – asset account
C. Liability account
D. Expense account
Answer: B. Contra – asset account
Question: TNT Corporation’s income tax payable is $230,000 and its tax rate is 25%. Assuming no book–tax differences, what is TNT’s net income? (Round your answer to the nearest whole dollar.)
Answer Choices:
A. $690,000
B. $920,000
C. $230,000
D. $57,500
Answer: A. $690,000
Question: Pepper Company owns 40% of the common stock and exercises significant influence over Salt Company. Pepper Company ________.
Answer Choices:
A. would decrease its investment account when Salt Company declares dividends
B. would file a consolidated financial statement with Salt Company
C. would record goodwill as investment income each year
D. would record dividends received from Salt Company as investment revenue
Answer: A. would decrease its investment account when Salt Company declares dividends
Question: Which of the following must be disclosed for available-for-sale securities?
Answer Choices:
A. amortized cost basis
B. the name of the investee and the percentage ownership
C. difference between the carrying value of the investment and the amount of underlying equity in net assets
D. market price
Answer: A. amortized cost basis
Question: Dante, Inc. reacquired 52,000 shares of its $1 par common stock for $19 per share on January 31. On March 1 they sold 7,000 treasury shares for $28 per share. On April 1 they sold 3,000 treasury shares for $17 per share. What is the necessary journal entry for March 1?
Answer Choices:
A. Cash 196,000
Treasury Stock 133,000
Addl. Paid – in Capital from Treasury Stock Transactions 63,000
B. Cash 51,000
Treasury Stock 51,000
C. Cash 196,000
Treasury Stock 119,000
Addl. Paid – in Capital from Treasury Stock Transactions 77,000
D. Cash 196,000
Treasury Stock 196,000
Answer: A. Cash 196,000; Treasury Stock 133,000; Addl. Paid-in Capital 63,000
Question: TNT Corporation’s income tax payable is $230,000 and its tax rate is 25%. Assuming no book–tax differences, what is TNT’s net income?
Answer Choices:
A. $690,000
B. $920,000
C. $230,000
D. $57,500
Answer: A. $690,000
Question: Other comprehensive income includes income items that bypass the income statement.
Answer Choices:
True
False
Answer: True
Question: Which of the following must be disclosed for available-for-sale securities?
Answer Choices:
A. amortized cost basis
B. the name of the investee and the percentage ownership
C. difference between the carrying value of the investment and the amount of underlying equity in net assets
D. market price
Answer: A. amortized cost basis
Question: Danio Fisheries issued 260,000 shares of $10 par value stock. The book value of Danio’s common stockholders’ equity is equal to $40 million. On August 1, Danio Fisheries implements a two-for-one stock split. After the stock split, the par value per share is _______ and the total book value is _______.
Answer Choices:
A. $10; $20 million
B. $5; $80 million
C. $5; $40 million
D. $20; $40 million
Answer: C. $5; $40 million