91.Refer to the information above. How much of the first payment made on December 31, Year 1, represents interest expense?    A.$2,400.   B.$400.   C.$2,304.   D.$2,000. 1% × $200,000 = $2,000       92.Refer to the information above. The total liability related to this mortgage reported in Bradley’s balance sheet at December 31, Year 1, is:    A.$432,100.   B.$199,600.   C.$194,923. […]

    157. The amount of Austin’s interest expense on this bond issue during Year 2 amounts to:  A. $400,000. B. $450,000. C. $360,000. D. $600,000.     Salem Co. has outstanding $100 million of 7% bonds, due in 7 years, and callable at 104. The bonds were issued at par and are selling today at a market price of 94.   158. If Salem Co. retires $10 million of these […]

  55. Harvey and Quick have decided to form a partnership. Harvey is going to contribute a depreciable asset to the partnership as his equity contribution to the partnership. The following information regarding the asset to be contributed by Harvey is available:   Historical cost of the asset$76,000 Accumulated depreciation on the asset$40,000 Note payable secured by the asset*$18,000 Agreed-upon market value of the asset$45,000 *will […]

            Essay Questions   178. Accounting terminology Listed below are nine technical accounting terms emphasized in this chapter. Mark-to-market Factoring Direct write-off Financial asset Cash equivalent Bank reconciliation Allowance for doubtful accounts Accounts receivable turnover Uncollectible accounts expense Each of the following statements may (or may not) describe one of these technical terms. In the space provided below each statement, indicate […]

    41. Both U.S. GAAP and IFRS permit considerable flexibility with respect to the display of information in the statement of cash flows. Firms must report the beginning and ending cash balances, and the change in the cash balance.  The change in cash must reconcile to the sum of the cash inflows and outflows from _____ activities.   A. operating B. investing C. financing D. operating, investing, and financing […]

  Multiple Choice Questions   32. Which of the following statements is not correct?  A. The description of a journal entry should include a reference to the source of the information contained in the entry. B. If goods are purchased on credit, the supplier’s invoice number is used as the source document for the transaction. C. The credit portion of a general journal entry is always recorded first. D. A […]

  71. Which of the following is included in the cash flows from financing activities section of the statement of cash flows?  A. Interest revenue. B. Sale of equipment. C. Interest expense. D. Purchase of treasury stock. E. Purchase of stock in another company. 72. Cash flows from interest received on loans are reported in the statement of cash flows as part of:  A. Operating activities. B. Financing activities. C. Investing activities. D. Noncash activities. E. None […]

    71. Often, the parent does not own 100% of the voting stock of a consolidated subsidiary. The parent refers to the owners of the remaining shares of voting stock as a  A. noncontrolling interest.B. nonconsolidated group.C. consolidated subsidiary.D. noninfluential interest.E. nonvoting interest.   72. The consolidated income statement shows A. all of the parent’s and the subsidiary’s revenues less all of the parent’s and the subsidiary’s expenses, plus or minus intercompany sales, […]

    71.Which of the following statements is true of disparate treatment and disparate impact?    A.The discriminating individual’s intent is irrelevant in disparate treatment.   B.For there to be discrimination under disparate treatment, there has to be intentional discrimination.   C.A selection practice that results in disparate impact is necessarily illegal in nature.   D.The four-fifths rule for discrimination is not applicable to disparate impact. […]

    153.Which of the following assets is not depreciated?    A.Store fixtures.   B.Computers.   Land.   D.Buildings.   E.Equipment.         154.Which of the following does not require an adjusting entry at year-end?    A.Accrued interest on notes payable.   B.Supplies used during the period.   Cash invested by stockholder.   D.Accrued wages.   E.Expired portion of prepaid insurance.         […]