Accounting Quiz 3
Accounting Quiz 3
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(Multiple Choice)
Which of the following items is included in property, plant, and equipment? A. Buildings and machinery which are idle. |
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2. | (Multiple Choice)
In a lump sum purchase of land, building, and equipment, the components were appraised at $10,000, $20,000, and $30,000, respectively. If $50,000 was paid for the package, how much is assigned to the equipment? A. $0. |
3. | (Multiple Choice)
The journal entry to record $100 annual of annual depreciation on a three-year old truck would require: A. a credit to Accumulated Depreciation for $300. |
4. | (Multiple Choice)
A graph is set up with “depreciation expense” on the vertical axis and “time” on the horizontal axis. Assuming linear relationships, how would the graphs for straight-line and double-declining balance depreciation, respectively be drawn? A. Vertically and sloping down to the right. |
5. | (Multiple Choice)
A new truck is purchased on January 1, 20X6. The truck cost $10,000, has a 5-year life, and a $2,000 residual value. Given a December 31 year-end, and use of the double-declining balance method, how much is 20X9 depreciation expense? A. $160. |
6. | (Multiple Choice)
Which of the following equations would best represent a formula for calculating units-of-output depreciation for a period? A. Cost divided by total expected output. |
7. | (Multiple Choice)
The USA tax code provides special tax provisions related to “deprecation.” Which of these is not a valid statement? A. GAAP depreciation is generally at a faster rate than tax. |
8. | (Essay)
Diamond Industries acquired a new machine at a cost of $62,000. Service life was estimated to be eight years and total units of output to be 200,000. Estimated residual value was $8,000. Compute depreciation for the second year in the life of the machine using the straight-line method. |
9. | (Multiple Choice)
Costs related to property, plant, and equipment which are incurred subsequent to acquisition should be added to an asset’s depreciable base if the: A. the service life of an asset is prolonged. |
10. | (Multiple Choice)
A major overhaul was completed on a truck that resulted in an extension in its useful life from three to five years. The proper entry to reflect this transaction includes a: A. debit to Accumulated Deprecation. |
11. | (Multiple Choice)
A machine that cost $9,000 with a book value of $2,000 is sold for $1,100, and an entry is made. Which of the following is true about the entry? A. Accumulated Depreciation is debited for $2,000. |
12. | (Multiple Choice)
In an exchange transaction, the term boot means: A. The transaction was at a loss. |
13. | (Multiple Choice)
When should an implied loss be recognized on the exchange of assets? A. When the exchange has commercial substance. |
14. | (Multiple Choice)
Which of the following terms best relates to intangible assets? A. Depreciation. |
15. | (Multiple Choice)
The inclusion of goodwill in the financial statements of a company indicates: A. that the company has a favorable reputation with its customers. |
16. | (Essay)
On January 1, 20X1, Burrus Company purchased for $76,000, equipment having a service life of ten years and an estimated residual value of $4,000. Burrus has recorded monthly depreciation of the equipment on the straight-line method. On December 31, 20X9, the equipment was sold for $15,000. What is the amount of gain to be recognized as a result of this sale? |
17. | (Multiple Choice)
Current liabilities are obligations that will be paid: A. with cash. |
18. | (Multiple Choice)
On July 1, A company borrows $100,000 on a 5% note, due in one year. What adjusting entry is needed on December 31? A. No entry is needed. |
19. | (Multiple Choice)
The account Discount on Notes Payable: A. is a contingent liability account. |
20. | (Multiple Choice)
Contingent liabilities should be recorded in the accounts when: A. it is probable that the future event will occur. |
21. | (Multiple Choice)
A balance in the Warranty Liability account: A. indicates that the books have not yet been closed. |
22. | (Multiple Choice)
Federal income taxes should not be withheld from: A. amounts paid to independent contractors. |
23. | (Multiple Choice)
Leonard recorded gross pay of $250,000. This is subject to employee’s portion of social security and Medicare taxes of $16,750, unemployment taxes of $3,000, and federal tax withholdings of $46,000. How much is payroll tax expense? A. $0. |
24. | (Essay)
On July 1, 20X7, Vasquez Publishing Company sold 1,000 two-year subscriptions to a monthly magazine. The subscriptions sold for $18 each. The first issue was mailed at the end of July. What is the proper balance sheet disclosure regarding this transaction for Vasquez at December 31, 20X7? |
25. | (Multiple Choice)
Which of the following is not a feature of the corporate form of organization? A. Limited liability. |
26. | (Multiple Choice)
Stringer Corporation issued 5,000 shares of $2 par value common stock. The issue price was $7.50 per share. The entry to record this transaction includes a: A. debit to Cash for $10,000. |
27. | (Multiple Choice)
Normally, the payment of a previously declared dividend will result in: A. a decrease in liabilities. |
28. | (Multiple Choice)
Dividends in arrears: A. pertain to cumulative preferred stock. |
29. | (Multiple Choice)
Which of the following statements about treasury stock is true? A. Excess of the sales price over cost should be credited to retained earnings. |
30. | (Multiple Choice)
Reissuing treasury stock at more than its cost will trigger a credit to: A. Gain. |
31. | (Multiple Choice)
Which of the following transactions would cause a change in total stockholders’ equity? A. A stock dividend. |
32. | (Multiple Choice)
The statement of stockholders’ equity includes information about: A. Beginning equity account balances. |
33. | (Essay)
In its initial capital stock transaction, the Board of Directors of Manning Corporation approved the issuance of 5,000 shares of $5 par value common stock, which were sold on the same day for $60 per share. The board was authorized to issue 10,000 shares of this class of stock. What is the balance in the Common Stock account after recording this stock issuance? |