The Maturity Date Note Receivable

The Maturity Date Note Receivable

1. The maturity date of a note receivable: (Points : 2) a. Is the day of the credit saleb. Is the day the note was signedc. Is the day the note is due to be paidd. Is the date of the first paymente. Is the last day of the month2. Most employees and employers are required to pay: (Points : 2) a. Local payroll taxesb. State payroll taxesc. Federal payroll taxesd. Both B and C onlye. Local, state and federal payroll taxes3. Sales taxes payable: (Points : 2) a. Is an estimated liabilityb. Is a contingent liabilityc. Is a current liability for retailersd. Is a business expensee. Is a long-term liability4. Pepsis accounts receivable turnover was 9.9 for this year and 11.0 for last year. Cokes turnover was 9.3 for this year and 9.3 for last year. These results imply that: (Points : 2) a. Coke has the better turnover for both yearsb. Pepsi has the better turnover for both yearsc. Cokes turnover is improvingd. Cokes credit policies are too loosee. Coke is collecting its receivables more quickly than Pepsi in both years5. Depreciation: (Points : 2) a. Measures the decline in market value of an assetb. Measures physical deterioration of an assetc. Is the process of allocating to expense the cost of a plant assetd. Is an outflow of cash from the use of a plant assete. Is applied to land6. Times interest earned is calculated by: (Points : 2) a. Multiplying interest expense times incomeb. Dividing interest expense by income before interest expensec. Dividing income before interest expense and any income tax by interest expensed. Dividing interest and income tax expense by income before interest and income tax expense7. The interest accrued on $3,600 at 7% for 60 days is: (Points : 2) a. $36b. $42c. $252d. $180e. $420Calculation: xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx8. Plant assets are: (Points : 2) a. Tangible assets used in the operation of a business that have a useful life of more than one accounting periodb. Current assetsc. Held for saled. Intangible assets used in the operations of a business that have a useful life of more than one accounting periode. Tangible assets used in the operation of business that have a useful life of less than on accounting period9. Total asset turnover is calculated by dividing: (Points : 2) a. Gross profit by average total assetsb. Average total assets by gross profitc. Net sales by average total assetsd. Average total assets by net salese. Net assets by total assets10. If the times interest ratio: (Points : 2) a. Increases, then risk increasesb. Increases, then risk decreasesc. Is greater than 1.5, then the company is in defaultd. Is less than 1.5, the company is carrying too little debt11. The matching principle requires: (Points : 2) a. That expenses be ignored if their effect on the financial statements are less important than revenues to the financial statement userb. The use of the direct write-off method for bad debtsc. The use of the allowance method of accounting for bad debtsd. That bad debts be disclosed in the financial statementse. That bad debts not be written off12. A company had a bulldozer destroyed by fire. The bulldozer originally cost $125,000. The accumulated depreciation on it was $60,000. The proceeds from the insurance company were $90,000. The company should recognize: (Points : 2) a. A loss of $25,000b. A gain of $25,000c. A loss of $65,000d. A gain of $65,000e. A gain of $90,000Calculation: xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx13. A machine originally had an estimated useful life of 5 years, but after 3 complete years, it was decided that the original estimate of useful life should have been 10 years. At that point the remaining cost to be depreciated should be allocated over the remaining: (Points : 2) a. 2 yearsb. 5 yearsc. 7 yearsd. 8 yearse. 10 years14. A company had a fixed interest expense of $6,000, its income before interest expense and any income taxes was $18,000 and its net income was $8,400. The companys times interest earned ratio is equals to (Points : 2) a. 0.33b. 0.71c. 1.40d. 3.00e. 12,000Calculation: xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 15. On October 10, 2010, Printfast Company sells a commercial printer for $2,350 with a one year warranty that covers parts. Warranty expense is project to be 4% of sales. On February 28, 2011, the printer requires repairs. The cost of the parts for the repair is $80 and Printfast pays their technician $150 to perform the repair. What is the warranty liability at the end of 2010? (Points : 2) a. $49.00b. $84.80c. $94.00d. $0, there is no liability at the end of 2010e. $230.00Calculation: xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx16. A premium on common stock: (Points : 2) a. Is the amount paid in excess of par by purchasers of newly issued stockb. Is the difference between par value and issue price when the amount paid is below parc. Represents profit from issuing stockd. Represents capital gain on sale of stocke. Is prohibited in most states17. A company borrowed $300,000 cash from the bank by signing a 5-year, 8% installment note. The present value factor for an annuity at 8% for 5 years is 3.9927. Each annuity payment equals $75,137. The present value of the note is: (Points : 2) a. $75,137b. $94,013c. $300,000d. $375,685Calculation: xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx18. The amount of income earned per share of a companys common stock is known as: (Points : 2) a. Restricted retained earnings per shareb. Earnings per sharec. Continuing operations per shared. Dividends per sharee. Book value per share19. To provide security to creditors and to reduce interest costs, bonds and notes payable can be secured by: (Points : 2) a. Safe deposit boxesb. Mortgagesc. Equityd. The FASBe. Debentures20. Amortizing a bond discount: (Points : 2) a. Allocates a part of the total discount to each interest periodb. Increases the market value of the Bonds Payablec. Decreases the Bonds Payable accountd. Decreases interest expense each periode. Increases cash flows from the bond21. A company received cash proceeds of $206,948 on a bond issue with a par value of $200,000. The difference between par value and issue price for this bond is recorded as a: (Points : 2) a. Credit to Interest Incomeb. Credit to Premium on Bonds Payablec. Credit to Discount on Bonds Payabled. Debit to Premium on Bonds Payable22. A company issues at par 7% bonds with a par value of $500,000 on June 1, which is 5 months after the most recent interest date. How much total cash interest is received on May 1 by the bond issuer? (Points : 2) a. $0b. $2,916.66c. $100,000.00d. $14,583.33e. $35,000.00Calculation: xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx23. Installment notes payable that require periodic payments of accrued interest plus equal amounts of principal result in: (Points : 2) a. Periodic total payments that gradually decrease in amountb. Periodic total payments that are equalc. Periodic total payments that gradually increase in amountd. Increasing amounts of interest each periode. Increasing amounts of principal each period24. Bonds that have interest coupons attached to their certificates, which the bondholders detach during each interest period and present to a bank for collection, are called: (Points : 2)a. Coupon bondsb. Callable bondsc. Serial bondsd. Convertible bonds25. The market value of a bond is equal to: (Points : 2) a. The present value of all future cash payments provided by a bondb. The present value of all future interest payments provided by a bondc. The present value of the principal for an interest-bearing bondd. The future value of all future cash payments provided by a bonde. The future value of all future interest payments provided by a bond


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