Question 1

Alpha Company issued 1,000 shares of $10 par value common stock to stockholders,in exchange for $15,000 cash.Which of the following correctly describes the impact of this transaction on Alpha's financial statements?

Accepted Answer

A)  A $15,000 investment is reported as a long-term investment.
B)  Stockholders have invested $25,000 as stockholders' equity.
C)  Common stock is reported at $15,000 in stockholders' equity.
D)  Additional paid-in capital of $5,000 is reported in stockholders' equity.E) A) and B)
F) A) and C)

Question 2

Complete the following schedule for Blue Eye Company.

Accepted Answer

The answer of Complete the following schedule for Blue Eye...

Question 3

For each of the following accounts,indicate whether the account is an asset (A),liability (L),or stockholders' equity (SE)and whether the account has a normal debit (Dr)or normal credit (Cr)balance.
1.Retained Earnings
2.Supplies
3.Additional paid-in capital
4.Accounts payable
5.Accounts receivable
6.Property and equipment
7.Wages payable
8.Prepaid expenses

Accepted Answer

1.SE,Cr.
2.A,Dr.
3.S...

Question 4

Selling stock to investors for cash would result in which of the following?

Accepted Answer

A)  A debit to additional paid-in capital and a credit to cash.
B)  A credit to both cash and additional paid-in capital.
C)  A debit to cash and a credit to common stock.
D)  A debit to cash and a credit to the investment account.E) C) and D)
F) A) and B)

Question 5

The dual effects concept implies that every transaction has at least two effects on the accounting equation.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following reflects the impact of a transaction where $200,000 cash was invested by stockholders in exchange for stock?

Accepted Answer

A)  Assets and retained earnings each increased $200,000.
B)  Assets and revenues each increased $200,000.
C)  Stockholders' equity and revenues each increased $200,000.
D)  Stockholders' equity and assets each increased $200,000.E) A) and B)
F) B) and D)

Question 7

The recording of a journal entry precedes the posting to the general ledger.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following direct effects on the accounting equation is not  possible as a result of a single business transaction which impacts only two accounts?

Accepted Answer

A)  An increase in a liability and a decrease in an asset.
B)  An increase in stockholders' equity and an increase in an asset.
C)  An increase in an asset and a decrease in an asset.
D)  A decrease in stockholders' equity and a decrease in an asset.E) A) and B)
F) C) and D)

Question 9

For each of the transactions listed below,indicate whether it is an investing (I)or financing (F)activity on the statement of cash flows.Also,indicate if the transaction increases (+)or decreases (-)cash.

Accepted Answer

The answer of For each of the transactions listed below,indicate...

Question 10

Which of the following is not  considered to be a recordable transaction?

Accepted Answer

A)  Signing a contract to have an outside cleaning service clean offices nightly.
B)  Paying employees their wages.
C)  Selling stock to investors.
D)  Buying equipment and agreeing to pay a note payable and interest at the end of a year.E) A) and B)
F) None of the above

Question 11

The current ratio measures the ability of a company to pay its short-term obligations with short-term assets.

Accepted Answer

A) True 
 B)False

Question 12

The Alex Company,a consulting firm,recorded the following selected business transactions during May,2019.Indicate whether each transaction would increase,decrease,or have no effect on the total assets of the company.

Accepted Answer

1.Increase.
2.No eff...

Question 13

Which of the following would result when a company lends cash to a customer in exchange for a ten-month note receivable?

Accepted Answer

A)  A noncurrent asset and an investing cash flow are created.
B)  A noncurrent asset and a financing cash flow are created.
C)  A current asset and a financing cash flow are created.
D)  A current asset and an investing cash flow are created.E) All of the above
F) B) and C)

Question 14

Which of the following journal entries is correct when a business entity issues common stock,above par value,to stockholders in exchange for cash?

Accepted Answer

A)   
B)   
C)   
D)   E) C) and D)
F) B) and C)

Question 15

The Pioneer Company has provided the following account balances: Cash $38,000;
Short-term investments $4,000;
Accounts receivable $48,000;
Supplies $6,000;
Long-term notes receivable $2,000;
Equipment $96,000;
Factory Building $180,000;
Intangible assets $6,000;
Accounts payable $30,000;
Accrued liabilities payable $4,000;
Short-term notes payable $14,000;
Long-term notes payable $92,000;
Common stock $180,000;
Retained earnings $60,000.
-
What are Pioneer's total current liabilities?

Accepted Answer

A)  $44,000.
B)  $34,000.
C)  $48,000.
D)  $140,000.E) A) and B)
F) A) and C)

Question 16

Which of the following transactions would result in an increase in the current ratio?

Accepted Answer

A)  Collection of cash from an account receivable.
B)  Selling shares of stock to stockholders in exchange for cash.
C)  Purchasing a building with cash.
D)  Declaration of a cash dividend by the board of directors.E) All of the above
F) A) and B)

Question 17

Which of the following statements is correct?

Accepted Answer

A)  Assets normally have a credit balance and are increased with debits.
B)  Assets normally have a debit balance and are increased with credits.
C)  Liability accounts normally have debit balances and are increased with debits.
D)  Stockholders' equity accounts normally have credit balances and are increased with credits.E) B) and C)
F) A) and B)

Question 18

How is the current ratio calculated and what does it measure?

Accepted Answer

The current ratio is current assets divi...

Question 19

Many valuable internally-developed intangible assets such as trademarks and copyrights are not reported on a company's balance sheet.

Accepted Answer

A) True 
 B)False

Question 20

Accounts payable would be reported within which of the following financial statements?

Accepted Answer

A)  Statement of cash flows.
B)  Income statement.
C)  Balance sheet.
D)  Statement of stockholders' equity.E) C) and D)
F) A) and B)

Exam 2: Investing and Financing Decisions and the Accounting System

Complete the following schedule for Blue Eye Company.

Correct Answer
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Which of the following would result when a company lends cash to a customer in exchange for a ten-month note receivable?

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
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How is the current ratio calculated and what does it measure?

Correct Answer
verified
The current ratio is current assets divi...
View Answer

Which of the following transactions would result in an increase in the current ratio?

Correct Answer
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Alpha Company issued 1,000 shares of $10 par value common stock to stockholders,in exchange for $15,000 cash.Which of the following correctly describes the impact of this transaction on Alpha's financial statements?

Correct Answer
verified

Accounts payable would be reported within which of the following financial statements?

Correct Answer
verified

Which of the following is not considered to be a recordable transaction?

Correct Answer
verified

Which of the following journal entries is correct when a business entity issues common stock,above par value,to stockholders in exchange for cash?

Correct Answer
verified

The current ratio measures the ability of a company to pay its short-term obligations with short-term assets.

Correct Answer
verified

Correct Answer
verified

The dual effects concept implies that every transaction has at least two effects on the accounting equation.

Correct Answer
verified

Which of the following reflects the impact of a transaction where $200,000 cash was invested by stockholders in exchange for stock?

Correct Answer
verified

For each of the transactions listed below,indicate whether it is an investing (I)or financing (F)activity on the statement of cash flows.Also,indicate if the transaction increases (+)or decreases (-)cash.

Correct Answer
verified

Selling stock to investors for cash would result in which of the following?

Correct Answer
verified

Many valuable internally-developed intangible assets such as trademarks and copyrights are not reported on a company's balance sheet.

Correct Answer
verified

The Alex Company,a consulting firm,recorded the following selected business transactions during May,2019.Indicate whether each transaction would increase,decrease,or have no effect on the total assets of the company.

Correct Answer
verified
1.Increase.
2.No eff...
View Answer

The recording of a journal entry precedes the posting to the general ledger.

Correct Answer
verified

Which of the following direct effects on the accounting equation is not possible as a result of a single business transaction which impacts only two accounts?

Correct Answer
verified

Correct Answer
verified
1.SE,Cr.
2.A,Dr.
3.S...
View Answer

Exam 2: Investing and Financing Decisions and the Accounting System

Complete the following schedule for Blue Eye Company.

Correct AnswerverifiedShow Answer

Which of the following would result when a company lends cash to a customer in exchange for a ten-month note receivable?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

How is the current ratio calculated and what does it measure?

Correct AnswerverifiedThe current ratio is current assets divi...View AnswerShow Answer

Which of the following transactions would result in an increase in the current ratio?

Correct AnswerverifiedShow Answer

Alpha Company issued 1,000 shares of $10 par value common stock to stockholders,in exchange for $15,000 cash.Which of the following correctly describes the impact of this transaction on Alpha's financial statements?

Correct AnswerverifiedShow Answer

Accounts payable would be reported within which of the following financial statements?

Correct AnswerverifiedShow Answer

Which of the following is not considered to be a recordable transaction?

Correct AnswerverifiedShow Answer

Which of the following journal entries is correct when a business entity issues common stock,above par value,to stockholders in exchange for cash?

Correct AnswerverifiedShow Answer

The current ratio measures the ability of a company to pay its short-term obligations with short-term assets.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The dual effects concept implies that every transaction has at least two effects on the accounting equation.

Correct AnswerverifiedShow Answer

Which of the following reflects the impact of a transaction where $200,000 cash was invested by stockholders in exchange for stock?

Correct AnswerverifiedShow Answer

For each of the transactions listed below,indicate whether it is an investing (I)or financing (F)activity on the statement of cash flows.Also,indicate if the transaction increases (+)or decreases (-)cash.

Correct AnswerverifiedShow Answer

Selling stock to investors for cash would result in which of the following?

Correct AnswerverifiedShow Answer

Many valuable internally-developed intangible assets such as trademarks and copyrights are not reported on a company's balance sheet.

Correct AnswerverifiedShow Answer

The Alex Company,a consulting firm,recorded the following selected business transactions during May,2019.Indicate whether each transaction would increase,decrease,or have no effect on the total assets of the company.

Correct Answerverified1.Increase.2.No eff...View AnswerShow Answer

The recording of a journal entry precedes the posting to the general ledger.

Correct AnswerverifiedShow Answer

Which of the following direct effects on the accounting equation is not possible as a result of a single business transaction which impacts only two accounts?

Correct AnswerverifiedShow Answer

Correct Answerverified1.SE,Cr.2.A,Dr.3.S...View AnswerShow Answer

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The current ratio is current assets divi...
View Answer

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1.Increase.
2.No eff...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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1.SE,Cr.
2.A,Dr.
3.S...
View Answer