Question :
71. Under U.S. GAAP, assets and liabilities in the balance sheet : 1245871
71. Under U.S. GAAP, assets and liabilities in the balance sheet appear in order of
A. decreasing closeness-to-cash.
B. increasing closeness-to-cash.
C. alphabetical order.
D. numerical order.
E. all of the above.
72. Under IFRS, assets and liabilities in the statement of financial position appear in order of
A. decreasing closeness-to-cash.
B. increasing closeness-to-cash.
C. alphabetical order.
D. numerical order.
E. all of the above.
73. The first step in the accounting record-keeping process is:
A. recording each transaction in a file or other record in the form of a journal entry.
B. posting the amounts from the journal entries to individual balance sheet and income statement accounts in a general ledger.
C. making adjusting journal entries to the accounts to correct errors and to reflect the financial statement impacts of items that occur because of usage or the passage of time.
D. preparing the income statement for the period from amounts in the income statement accounts.
E. preparing the balance sheet from amounts in the balance sheet accounts.
74. Assets are classified as current for reporting purposes when
A. shares of common stock in a company’s important supplier are acquired to ensure continued availability of raw materials.
B. shares of common stock in another company are acquired to diversify operations.
C. expenditures are made in developing new technologies or advertising products.
D. they are reasonably expected to be turned into cash or to be sold or consumed during the normal operating cycle of the business.
E. they are reasonably expected to be turned into cash or to be sold or consumed within the next three years.
75. Before preparing the balance sheet and income statement, an accountant would use what accounting record to first record the firm’s transactions?
A. the trial balance
B. the adjusting entry
C. the general ledger
D. the subsidiary ledger
E. the journal
76. Current liabilities
A. are obligations that a firm expects to pay or discharge during the normal operating cycle of the firm, usually one year.
B. include liabilities to merchandise suppliers, employees, and governmental units.
C. include notes and bonds payable to the extent that they will require the use of current assets within the next year.
D. include all of the above.
E. None of the above answers is correct.
77. If a corporation issues 1,000 shares of $1 par value common stock at $5 per share, how should the transaction be accounted for?
A. debit cash for $5,000 and credit common stock for $5,000
B. debit cash for $5,000 and credit common stock for $1,000 and credit additional paid-in capital for $4,000
C. debit cash for $5,000 and credit common stock for $1,000 and credit retained earnings for $4,000
D. credit cash for $5,000 and debit common stock for $5,000
E. debit common stock for $1,000 and debit retained earnings for $4,000 and credit cash for $5,000
78. T-accounts are frequently used in textbooks, demonstration problems, and examinations to accumulate information about the effects of business transactions on individual balance sheet accounts and to prepare the balance sheet. Alternatively, to accomplish the same objectives, some instructors and students might prefer to use
A. a computer spreadsheet program.
B. P-accounts, only.
C. a single-entry bookkeeping system.
D. P&L-accounts.
E. L-accounts, only.
79. Prepaid assets are valued on the balance sheet at
A. cost paid to acquire the asset.
B. acquisition cost less accumulated depreciation.
C. cost less expired portion.
D. replacement cost.
E. present value of future cash flows.
80. On April 1, Year 1, Colonial Bookstore bought an insurance policy costing $24,000 that would insure the retail building for two years against fire loss. What asset account and what amount are recorded on the balance sheet at December 31, Year 1?
A. Prepaid Insurance, $15,000
B. Insurance Expense, $15,000
C. Prepaid Insurance, $9,000
D. Insurance Expense, $9,000
E. Prepaid Insurance, $12,000
