Question :
71. Current liabilities A. are obligations that a firm expects to pay or : 1230515
71. 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. includes liabilities to merchandise suppliers, employees, and governmental units
C. includes notes and bonds payable to the extent that they will require the use of current assets within the next year
D. all of the above
E. none of the above
72. 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
73. Which of the following is (are) true regarding the T-account?
A. Actual practice does not use this form of the account, except perhaps for memoranda or preliminary analyses
B. looks like the letter T, with a horizontal line bisected by a vertical line.
C. satisfies the requirement of an account and is easy to use.
D. all of the above
E. none of the above
74. Which of the following is (are) true regarding the T-account?
A. the name or title of the account appears on the horizontal line.
B. dates and other information can appear in T-accounts.
C. one side of the space formed by the vertical line records increases in the item and the other side records decreases.
D. all of the above
E. none of the above
75. Which of the following is (are) true regarding T-accounts?
A. for each transaction, the amount entered on the left side of (or debited to) the accounts for each transaction equals the amount entered on the right side of (or credited to) the accounts.
B. recording equal amounts of debits and credits for each transaction ensures that the balance sheet equation will always balance.
C. one side of the space formed by the vertical line records increases in the item and the other side records decreases.
D. all of the above
E. none of the above
76. 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
77. The result of closing entries is that balances in all temporary accounts
A. are adjusted to historical cost
B. include monthly depreciation
C. are adjusted to zero
D. are adjusted to budgeted amounts
E. are adjusted to the present value of future cash flows
78. 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
79. The result of closing entries is that balances in all temporary accounts
A. are adjusted to historical cost
B. include monthly depreciation
C. are adjusted to zero
D. are adjusted to budgeted amounts
E. are adjusted to current market values
80. Which of the following are not an example of adjusting entries?
A. recognition of depreciation on equipment purchased during the year
B. recording the expiration of a portion of the cost of prepaid insurance that was purchased during the previous year
C. recognition of income tax expense on the net income earned during the period
D. recording of collections received from customers during the period
E. recognition of warranty expense on cars sold during the period
