36.Identify the procedure below that is NOT essential for proper control over cash payments.    A. Enter all cash payments promptly in the accounting records.   B. Have only designated personnel approve bills and invoices before they are paid.   C. Make all payments out of a petty cash fund or a travel and entertainment fund.   D. Use prenumbered check forms.         37.On a […]

  1.A loss from early extinguishment of debt, if material, should be reported as a component of income a.After cumulative effect f accounting changes and after discontinued operations of  a  segment of a business b.After cumulative effect of accounting changes and before discontinued operations of a  segment of a business c.Income from continuing operations d.Before cumulative effect of accounting changes and before discontinued operation s […]

  180.Barzetti had no investments prior to the current year. It had the following transactions involving available-for-sale and held-to-maturity securities during the year. The stock purchases are considered short-term available-for-sale securities. Prepare Barzetti’s journal entries to record the transactions and events associated with the investment purchases.  Apr. 18Purchased 5,000 shares of Lacy Co. stock at $26.50 per share plus a $350 brokerage fee. May 01Purchased […]

    107. Betterments are:  A. Expenditures making a plant asset more efficient or productive. B. Also called ordinary repairs. C. Always increase an asset’s life. D. Revenue expenditures. E. Credited againstthe asset account when incurred.   108. An asset’s book value is $18,000 on December 31, Year 5. The asset has been depreciated at an annual rate of $3,000 on the straight-line method. Assuming the asset is sold on December 31, […]

    31. Managers frequently cite which of the following reason(s) for using off-balance sheet financing?  A. Some managers believe that it might lower the cost of borrowing. B. Lower borrowing costs might result if lenders ignore off-balance-sheet financing. C. Lower borrowing costs might result if lenders are unaware of off-balance sheet financing: because borrowers do not disclose it. D. Off-balance-sheet financing might lead lenders to set interest rates for […]

  55.Managerial accounting information:    A. Is used mainly by external users. B. Involves gathering information about costs for planning and control decisions. C. Is generally the only accounting information available to managers. D. Can be used for control purposes but not for planning purposes. E. Has little to do with controlling costs. 56.Managerial accounting is different from financial accounting in that:    A. Managerial accounting is more focused on the organization as […]

    141. On January 1, 2014, Gemstone Company obtained a $165,000, 10-year, 7% installment note from Guarantee Bank.  The note requires annual payments of $23,492, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $11,550 and principal repayment of $11,942. The journal entry to record the payment of the first annual amount due on […]

    71.Generally accepted accounting principles:    A.Are based on official decrees only.   B.Are based on tradition only.   C.Are based on an accountant’s experience only.   D.May change over time.         72.The Sarbanes-Oxley Act of 2002 created:    A.The Security and Exchange Commission.   B.The Financial Accounting Standards Board.   C.The Public Company Accounting Oversight Board.   D.The Income Tax Return Overview […]

  80.Long-term investments can not include:    A. Held-to-maturity debt securities. B. Securities with maturity dates within one operating cycle. C. Available-for-sale equity securities. D. Equity securities giving an investor significant influence over an investee. E. Available-for-sale debt securities. 81.Consolidated financial statements:    A. Show the results of operations, cash flows, and the financial position of all entities under a parent’s control, including all subsidiaries. B. Show the results of operations, cash flows, and […]

    71. Tannwin Co. sells a new product called Accountomatic and has predicted the following sales for the first four months of the current year:    Jan. Feb. March April Sales in units 1,700 1,900 2,100 1,600 Ending inventory for each month should be 20% of the next month’s sales, and the prior December 31 inventory is consistent with that policy. How many units […]