Can You Pass This Accounting Test? Trivia Questions Quiz
Can You Pass This Accounting Test? Accounting is the practice of preparing records that show the financial position of an organization using the laid down standards both internationally and locally. Do you consider yourself a capable accountant? The test will tell you if you need some refresher quizzes to perfect your skills. Be sure to give it a try!
- 1.
A detailed report that companies file annually with the SEC is the
- A.
10-q report
- B.
10-k report
- C.
Registration statement
- D.
8-k report
Correct Answer
B. 10-k reportExplanation
A detailed report that companies file annually with the SEC is the 10-k report. This report provides a comprehensive overview of a company's financial performance and includes information such as audited financial statements, management's discussion and analysis, and disclosures about the company's business operations and risks. The 10-k report is an important tool for investors and analysts to assess the financial health and prospects of a company. It is a mandatory filing requirement for publicly traded companies and provides transparency and accountability to shareholders and the general public.Rate this question:
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- 2.
The elements of financial position do not include
- A.
Assets
- B.
Liabilities
- C.
Owners' equity
- D.
Financing activities
Correct Answer
D. Financing activitiesExplanation
The elements of financial position refer to the components that make up a company's financial statement. These elements are assets, liabilities, and owners' equity. Assets represent the resources owned by the company, liabilities are the company's obligations, and owners' equity represents the shareholders' stake in the company. Financing activities, on the other hand, refer to the activities related to raising capital, such as issuing stocks or taking out loans. While financing activities are important for a company's financial health, they are not considered as elements of financial position.Rate this question:
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- 3.
The financial accounting standards board
- A.
Is a government regulatory agency
- B.
Sponsors and encourages the improvement of accounting teaching and research
- C.
Deals primarily with tax reporting problems with the IRS
- D.
Is a private sector organization that develops accounting principles
Correct Answer
D. Is a private sector organization that develops accounting principlesExplanation
The correct answer is "is a private sector organization that develops accounting principles." The explanation for this is that the Financial Accounting Standards Board (FASB) is an independent, private sector organization that sets the accounting standards for public companies in the United States. It is not a government regulatory agency or primarily focused on tax reporting problems with the IRS. Its main role is to develop and improve accounting principles to ensure transparency and consistency in financial reporting.Rate this question:
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- 4.
The matching concept states that
- A.
Net income is determined by linking operating cash receipts with operating cash payments
- B.
Assets are linked with liabilities and owners' equity in the balance sheet
- C.
Net income is determined by linking expenses incurred with related revenues earned
- D.
Owner contributions and owner withdrawals are linked in the statement (owners' equity)
Correct Answer
C. Net income is determined by linking expenses incurred with related revenues earnedExplanation
The matching concept states that net income is determined by linking expenses incurred with related revenues earned. This means that expenses should be matched with the revenues they generate in order to accurately determine the net income. By doing so, the financial statements reflect the true profitability of the business during a specific period. This concept ensures that the income statement presents a clear and accurate picture of the company's financial performance by aligning expenses and revenues appropriately.Rate this question:
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- 5.
Which of the following statements is true?
- A.
The income statement shows the financial position of an entity as of a specific date
- B.
The income statement shows the financial position of an entity for a specific period of time
- C.
The balance sheet shows the financial position of an entity as of a specific date
- D.
The balance sheet shows the financial position of an entity for a specific period of time
Correct Answer
C. The balance sheet shows the financial position of an entity as of a specific dateExplanation
The balance sheet shows the financial position of an entity as of a specific date. This is because the balance sheet provides a snapshot of the organization's assets, liabilities, and shareholders' equity at a particular point in time. It is a statement of the financial position of the entity at a specific date, rather than for a specific period of time. The income statement, on the other hand, shows the financial performance of the entity over a specific period of time by presenting revenues, expenses, and net income or loss.Rate this question:
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- 6.
The income statement is designed to
- A.
Report on solvency of a business entity
- B.
Report on the profitability of a business entity
- C.
Report on economic resources of a business entity
- D.
Report on the stability of a business entity
Correct Answer
B. Report on the profitability of a business entityExplanation
The income statement is a financial statement that provides information about the revenue, expenses, and net income of a business entity over a specific period of time. It shows the profitability of the business by deducting the expenses from the revenue to determine the net income. Therefore, the correct answer is "report on the profitability of a business entity."Rate this question:
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- 7.
All entries that record transactions which recognize revenue as earned also record a/an
- A.
Increase in liabilities
- B.
Decrease in assets
- C.
Decrease in retained earnings
- D.
Increase in assets
- E.
None of the above
Correct Answer
D. Increase in assetsExplanation
When transactions recognize revenue as earned, it means that the company has generated income from its operations. This increase in revenue is typically accompanied by an increase in assets. This is because revenue is recorded as an increase in an asset account, such as accounts receivable or cash. Therefore, the correct answer is "increase in assets."Rate this question:
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- 8.
Which of the following transactions does not affect the assets of Marie corp?
- A.
A bill is received for electricity used by Marie during the past month
- B.
Dividends are paid by Marie
- C.
Customers are billed for sales made on credit by Marie
- D.
Payment is received by Marie from customers who are paying their account balances for credit sales recorded earlier
Correct Answer
A. A bill is received for electricity used by Marie during the past month -
- 9.
Which of the following financial statements is a period statement
- A.
Income statement
- B.
Statement of retained earnings
- C.
Statement of cash flows
- D.
All of the above
- E.
None of the above
Correct Answer
D. All of the aboveExplanation
All of the above options are period statements. An income statement shows the company's revenues, expenses, and net income or loss for a specific period. The statement of retained earnings displays the changes in the company's retained earnings over a given period, including net income or loss and dividends. The statement of cash flows provides information on the company's cash inflows and outflows during a particular period. Therefore, all three statements are considered period statements.Rate this question:
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- 10.
All temporary ledger accounts are ultimately
- A.
Closed
- B.
Adjusted
- C.
Dissolved
- D.
An explicit component of the balance sheet
Correct Answer
A. ClosedExplanation
Temporary ledger accounts are closed at the end of an accounting period to transfer their balances to the permanent accounts. This process is known as closing the accounts. By closing the temporary accounts, such as revenue and expense accounts, their balances are zeroed out and transferred to the retained earnings or income summary account. This allows for a fresh start in the new accounting period and ensures accurate financial reporting. Therefore, the correct answer is "closed".Rate this question:
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- 11.
After the closing process is completed
- A.
All temporary accounts will have a zero balance
- B.
The balance in retained earnings account is appropriate for the balance sheet
- C.
All accounts with a non-zero balance will be a component of the balance sheet
- D.
All of the above are correct
Correct Answer
D. All of the above are correctExplanation
After the closing process is completed, all temporary accounts will have a zero balance. This is because temporary accounts, such as revenue and expense accounts, are closed at the end of the accounting period to transfer their balances to the retained earnings account.
Additionally, the balance in the retained earnings account is appropriate for the balance sheet. Retained earnings represent the accumulated profits or losses of a company over time, and its balance is reported on the balance sheet.
Furthermore, all accounts with a non-zero balance will be a component of the balance sheet. The balance sheet includes all assets, liabilities, and equity accounts, so any account with a balance will be reflected on the balance sheet.
Therefore, all of the above statements are correct after the closing process is completed.Rate this question:
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- 12.
The payment of a liability.
- A.
Decreases assets and owners' equity
- B.
Increases assets and decreases liabilities
- C.
Decreases assets and increases liabilities
- D.
Decreases assets and liabilities
Correct Answer
D. Decreases assets and liabilitiesExplanation
When a liability is paid, it means that the company has used its assets to settle the obligation. This results in a decrease in assets because the company no longer possesses those resources. Additionally, the payment of a liability also reduces the amount of outstanding debt or obligations, leading to a decrease in liabilities. Therefore, the correct answer is that the payment of a liability decreases both assets and liabilities.Rate this question:
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- 13.
Which of the following items has no effect on owners' equity?
- A.
Expense
- B.
Dividend declared and paid
- C.
Land purchased
- D.
Revenue
Correct Answer
C. Land purchasedExplanation
Land purchased has no effect on owners' equity because it is classified as an asset on the balance sheet, not as an item that directly affects the owners' equity. Owners' equity represents the owners' share of the company's assets after deducting liabilities. Expenses, dividends declared and paid, and revenue all directly impact owners' equity.Rate this question:
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- 14.
Sanford Realty Corp had the following balance sheet accounts and balances: a/p 6000 a/r 1000 building ? Cash 3000 equipment 7000 common stock ? land 7000 retained earnings 2000 If the balance in the common stock account were 19000 what would be the amount of the building account?
- A.
25000
- B.
4000
- C.
9000
- D.
21000
Correct Answer
C. 9000Explanation
Based on the given information, the common stock account has a balance of 19000. To find the amount of the building account, we need to subtract the balances of all other accounts from the total assets. The total assets can be calculated by adding the balances of cash, accounts receivable, equipment, land, and the building account. Subtracting the balances of all other accounts (a/p, common stock, and retained earnings) from the total assets will give us the balance of the building account. Therefore, the amount of the building account would be 9000.Rate this question:
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- 15.
If the balance sheet accounts showed an amount of $17000 in the building account, what would be the total of liabilities and stockholders' equity
- A.
$17000
- B.
$27000
- C.
$32000
- D.
$35000
Correct Answer
D. $35000Explanation
The total of liabilities and stockholders' equity would be $35,000. This is because the building account is a part of the assets on the balance sheet, and assets are equal to liabilities plus stockholders' equity. Therefore, if the building account is $17,000, the total of liabilities and stockholders' equity must be $35,000 in order to balance the equation.Rate this question:
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- 16.
The statement of cash flows would disclose the payment of a dividend
- A.
Nowhere in the statement
- B.
In the operating activities section
- C.
In the investing activities section
- D.
In the financing activities section
Correct Answer
D. In the financing activities sectionExplanation
The payment of a dividend is classified as a financing activity because it involves distributing profits to shareholders, which affects the company's capital structure. Financing activities typically include activities related to the company's equity and debt, such as issuing or repurchasing shares, paying dividends, and borrowing or repaying loans. Therefore, the payment of a dividend would be disclosed in the financing activities section of the statement of cash flows.Rate this question:
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- 17.
Unearned revenues are recorded by companies that
- A.
Pay money in advance of the performance of a service
- B.
Pay money at the time of a service is complete
- C.
Receive money in advance in advance of the performance of a service
- D.
Receive money at the time the performance of a service is compete
Correct Answer
C. Receive money in advance in advance of the performance of a serviceExplanation
Unearned revenues are recorded by companies that receive money in advance of the performance of a service. This means that the company receives payment from a customer before they have actually provided the service. This is a liability for the company as they have an obligation to provide the service in the future. The revenue is considered unearned until the service is performed, at which point it is recognized as earned revenue.Rate this question:
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- 18.
Which of the following does not contain retained earnings
- A.
Investments by stockholders
- B.
Declaration and payment of dividends
- C.
Earnings of revenues
- D.
Incurring of expenses
Correct Answer
A. Investments by stockholdersExplanation
Investments by stockholders do not contain retained earnings because retained earnings refer to the portion of a company's profits that is reinvested back into the business rather than distributed to shareholders. Investments by stockholders, on the other hand, represent the capital contributed by shareholders to the company and do not directly affect the retained earnings.Rate this question:
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- 19.
The dividends account appears on
- A.
The statement of retained earnings only
- B.
The income statement only
- C.
The balance sheet only
- D.
Both the income statement and the balance sheet
Correct Answer
A. The statement of retained earnings onlyExplanation
The dividends account appears on the statement of retained earnings only because it represents the portion of the company's earnings that is distributed to shareholders. The statement of retained earnings shows the changes in retained earnings over a specific period, including the net income or loss, dividends, and other adjustments. The income statement focuses on the company's revenues, expenses, and net income, while the balance sheet provides a snapshot of the company's financial position at a specific point in time. Therefore, the dividends account is not included on the income statement or the balance sheet.Rate this question:
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- 20.
Which of the following events would not require a journal entry?
- A.
Purchase of a one-year insurance entry
- B.
Agreement to perform a service at a future date
- C.
Performance of a service agreed to at a past date
- D.
Payment for a service performed previously
Correct Answer
B. Agreement to perform a service at a future dateExplanation
An agreement to perform a service at a future date would not require a journal entry because it is a future event that has not yet occurred. Journal entries are used to record transactions that have already taken place, such as the purchase of insurance, the performance of a service, or the payment for a service. The agreement to perform a service at a future date is a promise or contract, but until the service is actually performed, there is no financial transaction to record.Rate this question:
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- 21.
When a company receives an electric bill but will not be paying it right away, it should
- A.
Debit utility expense and credit a/r
- B.
Debit utility expense and credit a/p
- C.
Debit a/p and credit utility expense
- D.
Make no entry until the bill is paid
Correct Answer
B. Debit utility expense and credit a/pExplanation
When a company receives an electric bill but will not be paying it right away, it should debit utility expense and credit accounts payable (a/p). This is because the company has incurred an expense for the utility service, which is recorded as a debit to the utility expense account. At the same time, the company has an obligation to pay the bill in the future, which is recorded as a credit to accounts payable. This entry reflects the company's liability for the unpaid bill and ensures that the expense is properly recorded in the financial statements.Rate this question:
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- 22.
The process of transferring journal entry information from the journal to the ledger is called
- A.
Journalizing
- B.
Posting
- C.
Analyzing
- D.
Footing
Correct Answer
B. PostingExplanation
The process of transferring journal entry information from the journal to the ledger is called posting. This involves taking the information recorded in the journal, such as the date, accounts involved, and amounts, and entering it into the appropriate accounts in the ledger. Posting helps to organize and summarize the financial transactions in the ledger, making it easier to track and analyze the company's financial position.Rate this question:
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- 23.
Which of the following errors will not cause the debit and credit columns of a trial balance to be unequal
- A.
Only part of a journal entry was posted
- B.
A debit posted to an account as a credit
- C.
A journal entry was accidentally posted twice
- D.
The trial balance was incorrectly summed
Correct Answer
C. A journal entry was accidentally posted twiceExplanation
If a journal entry is accidentally posted twice, it means that the same entry has been recorded twice in the ledger accounts. This error will not cause the debit and credit columns of a trial balance to be unequal because the double posting will result in equal amounts being recorded on both the debit and credit sides of the affected accounts. Therefore, the total debits and credits in the trial balance will still be equal, despite the duplication of the journal entry.Rate this question:
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- 24.
Which of the following accounts is a nominal account
- A.
A/r
- B.
Wages payable
- C.
Common stock
- D.
Wages expense
Correct Answer
D. Wages expenseExplanation
Wages expense is a nominal account because it is used to record the expenses incurred by a company for paying wages to its employees. Nominal accounts are temporary accounts that are closed at the end of an accounting period and their balances are transferred to the retained earnings account. On the other hand, accounts receivable (a/r), wages payable, and common stock are all classified as real accounts or permanent accounts as they represent assets, liabilities, and equity respectively, which are not closed at the end of an accounting period.Rate this question:
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- 25.
Which of the following accounts is a permanent account?
- A.
Depreciation expense
- B.
Dividends
- C.
Accumulated depreciation
- D.
Advertising fees earned
Correct Answer
C. Accumulated depreciationExplanation
Accumulated depreciation is a permanent account because it is used to record the cumulative depreciation of an asset over its useful life. It is a contra-asset account that is subtracted from the original cost of the asset to calculate its net book value. Unlike temporary accounts such as depreciation expense, dividends, and advertising fees earned, accumulated depreciation carries forward from one accounting period to another and is not closed at the end of the period. Therefore, it is considered a permanent account.Rate this question:
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- 26.
The Store Supplies account had a $180 debit balance at the end of the accounting period before adjustment for supplies used, and an inventory of $40 worth of unused supplies was on hand. Which of the following is the required adjusting entry?
- A.
Debit store supplies expense $40 and credit store supplies $40
- B.
Debit store supplies $40 and credit store supplies expense $40
- C.
Debit store supplies $140 and credit store supplies expense $140
- D.
Debit store supplies expense $140 and credit store supplies $140
Correct Answer
D. Debit store supplies expense $140 and credit store supplies $140Explanation
The correct adjusting entry is to debit the store supplies expense for $140 and credit the store supplies account for $140. This entry is necessary to reflect the decrease in the value of the supplies on hand ($40 worth of unused supplies) and to recognize the expense incurred for using those supplies during the accounting period ($140). This adjustment ensures that the financial statements accurately reflect the decrease in the value of the supplies and the corresponding expense.Rate this question:
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- 27.
A company recorded office supplies in an asset account when the supplies were purchased. failure to take inventory and make and adjusting entry will result in
- A.
Understatement of assets
- B.
Understatement of stockholders' equity
- C.
Overstatement of stockholders' equity
- D.
Understatement of liabilities
Correct Answer
C. Overstatement of stockholders' equityExplanation
If the company fails to take inventory and make an adjusting entry for the office supplies, it means that the supplies are still recorded as assets on the company's books. However, if the supplies have been used up or consumed, they should no longer be considered as assets. This failure to adjust the books will result in an overstatement of stockholders' equity because the assets are overstated, which in turn increases the equity.Rate this question:
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- 28.
Which of the following accounts would be found on the credit side of the trial balance?
- A.
Prepaid insurance
- B.
Depreciation expense
- C.
Dividends
- D.
Accumulated depreciation
Correct Answer
D. Accumulated depreciationExplanation
Accumulated depreciation is an account that represents the total depreciation expense of an asset over its useful life. It is a contra-asset account and is subtracted from the asset's original cost on the balance sheet. Since the trial balance includes all accounts with their respective debit and credit balances, accumulated depreciation would be found on the credit side of the trial balance. This is because it has a credit balance and is used to reduce the value of the related asset.Rate this question:
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- 29.
The purpose of an audit is to
- A.
Comply with income tax regulations
- B.
Determine whether or not a company is a good investment
- C.
Determine whether or not a company is a good credit risk
- D.
Ascertain that the financial statements follow GAAP
Correct Answer
D. Ascertain that the financial statements follow GAAPExplanation
The purpose of an audit is to ascertain that the financial statements follow GAAP. An audit is a systematic examination of a company's financial records and statements to ensure that they are accurate, complete, and in compliance with Generally Accepted Accounting Principles (GAAP). It helps to provide assurance to stakeholders, such as investors, lenders, and regulators, that the financial information provided by the company is reliable and can be trusted.Rate this question:
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- 30.
On June 30, a company paid $3600 for insurance premiums for the current year and debited the amount to prepaid insurance. At december 31 the bookkeeper forgot to record the amount expired. The omission has the following effect on the financial statements prepared Dec 31
- A.
Overstates owners' equity
- B.
Overstates assets
- C.
Understates net income
- D.
Both a and b
Correct Answer
D. Both a and bExplanation
The omission of recording the expired insurance premiums at December 31 overstates owners' equity because prepaid insurance is an asset and not recording the expense reduces the amount of expenses and therefore increases the net income. This increase in net income would increase the retained earnings and thus overstate the owners' equity. Additionally, it also overstates assets because the prepaid insurance amount should have been reduced to reflect the expired portion, but since it was not recorded, the assets are overstated.Rate this question:
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- 31.
An example of an adjusting entry involving a deferred (unearned revenue) revenue:
- A.
Cash/dr, unearned rental revenue/cr
- B.
Rental revenue/dr, cash/cr
- C.
Unearned rental revenue/dr, rental revenue/cr
- D.
A-r/dr, sales/cr
Correct Answer
C. Unearned rental revenue/dr, rental revenue/crExplanation
This adjusting entry involves unearned rental revenue, which is a liability account. The entry debits the unearned rental revenue account to reduce the liability and credits the rental revenue account to recognize the revenue that has been earned. This entry reflects the adjustment made to accurately reflect the revenue that has been earned during the accounting period.Rate this question:
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- 32.
L. Lane received $12000 from a tenant on Dec 1 for four months rent of an office. This rent was for Dec, Jan, Feb and March. If lane debited Cash and credited unearned rental income for $12000 on Dec 1, what necessary adjustment would be made on Dec 31
- A.
Unearned rental income/dr (3000), rental income/cr (3000)
- B.
Rental income/dr (3000), unearned rental income/cr (3000)
- C.
Unearned rental income/dr (9000), rental income/cr (9000)
- D.
Rental income/dr (9000), unearned rental income/cr (9000)
Correct Answer
A. Unearned rental income/dr (3000), rental income/cr (3000)Explanation
The necessary adjustment on Dec 31 would be to debit unearned rental income for $3000 and credit rental income for $3000. This adjustment is made to recognize the portion of the rent that has been earned during the month of December. Since the tenant paid for four months in advance, only one month's worth of rent has been earned by the end of December. Therefore, $3000 of the unearned rental income needs to be recognized as rental income in December.Rate this question:
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- 33.
Ingle Company paid $12960 for a four-year insurance policy on sept 1 and recorded the $12960 as a debit to prepaid insurance and credit to cash. What adjusting entry should Ingle make on Dec 31, the end of the accounting period?
- A.
Prepaid insurance/dr (810), insurance expense/cr (810)
- B.
Insurance expense/dr (1080), prepaid insurance/cr (1080)
- C.
Insurance expense/dr (3240), prepaid insurance/cr (3240)
- D.
Prepaid insurance/dr (11880), insurance expense/cr (11880)
Correct Answer
B. Insurance expense/dr (1080), prepaid insurance/cr (1080)Explanation
The adjusting entry on December 31 should be to debit insurance expense for $1080 and credit prepaid insurance for $1080. This is because the company has already used up 4 months of the insurance policy (September to December), so the remaining 8 months need to be recognized as an expense in the current accounting period. Therefore, $1080 (4/12 of $3240) should be recorded as insurance expense and deducted from the prepaid insurance account.Rate this question:
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- 34.
Unearned rent would normally appear on the balance sheet as a
- A.
Plant asset
- B.
Current liability
- C.
Long-term liability
- D.
Current asset
Correct Answer
B. Current liabilityExplanation
Unearned rent is a liability that arises when a company receives payment in advance for rent but has not yet earned it. It represents an obligation to provide goods or services in the future. Since it is a liability that will be settled within the next year, it is classified as a current liability on the balance sheet.Rate this question:
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- 35.
On Aug 1, 2004, Gann Company signed a $5000, two-year, 10% note payable. At due date, July 31, 2006, the principal and interest will be paid in full. Interest expense should be reported on the income statement for the year ended Dec 31, 2004, in the amount of.
- A.
$292
- B.
$208
- C.
$500
- D.
$250
- E.
$167
Correct Answer
B. $208Explanation
The correct answer is $208 because the note payable was signed on August 1, 2004, and the interest expense should be reported for the year ended December 31, 2004. This means that the interest expense will only be for a portion of the year, specifically from August 1, 2004, to December 31, 2004. To calculate the interest expense, we can use the formula: Principal x Interest Rate x Time. In this case, the principal is $5000, the interest rate is 10%, and the time is 5/12 (from August 1 to December 31). Therefore, the interest expense for 2004 is $5000 x 10% x 5/12 = $208.Rate this question:
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- 36.
GEM Corp reported the following for 19A: Revenues...... $100,000 Expenses....... $90,000 Capital stock, par $5.... $25,000 What was the amount of earnings per share
- A.
$1.20
- B.
$1.40
- C.
$2.00
- D.
$4.67
- E.
$4.00
Correct Answer
C. $2.00 -
- 37.
On Jan 2, 2004 BD Company purchased a machine that cost $14,000 and had an estimated useful life of 10 years (no residual value). The book value at the end of 2009, would be
- A.
$14,000
- B.
$2,100
- C.
$5,600
- D.
$5,000
- E.
None of the above are correct
Correct Answer
C. $5,600Explanation
The book value of an asset is calculated by subtracting the accumulated depreciation from the original cost. In this case, the machine was purchased for $14,000 and has a useful life of 10 years. Since there is no residual value, the depreciation expense each year would be $14,000 / 10 = $1,400. At the end of 2009, which is 6 years after the purchase, the accumulated depreciation would be 6 * $1,400 = $8,400. Therefore, the book value at the end of 2009 would be $14,000 - $8,400 = $5,600.Rate this question:
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- 38.
At the end of 2003, TK Corporation reported an ending balance for retained earnings of $70,000. During 2004, the company reported the following amounts: dividends, declared and paid, $30,000 and net income, $48,000. The 2004 statement of retained earnings should report the following ending balance:
- A.
$18,000
- B.
$70,000
- C.
$88,000
- D.
$118,000
- E.
None of the above are correct
Correct Answer
C. $88,000Explanation
In order to find the ending balance for retained earnings in 2004, we need to start with the ending balance from the previous year, which is given as $70,000. Then, we subtract the dividends declared and paid, which is $30,000, and add the net income, which is $48,000. Therefore, the calculation would be: $70,000 - $30,000 + $48,000 = $88,000. Therefore, the correct answer is $88,000.Rate this question:
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- 39.
If the total amount of common stock outstanding (par $10) was $10,000 and the Additional paid in capital in excess of par was $6,000, the issue price per share of stock was:
- A.
$3.00
- B.
$3.50
- C.
$16.00
- D.
$5.00
- E.
$10.00
Correct Answer
C. $16.00Explanation
The issue price per share of stock can be calculated by dividing the total amount of common stock outstanding by the number of shares issued. In this case, if the total amount of common stock outstanding is $10,000 and the par value per share is $10, then the number of shares issued is 10,000 / 10 = 1,000. The additional paid-in capital in excess of par is $6,000, which means the total amount received from issuing the stock is $16,000. Dividing this by the number of shares issued gives us an issue price per share of $16.00.Rate this question:
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- 40.
Dodge corporation reported total assets of $2,500,000, total current liabilities of $900,000, and total long-term liabilities of $500,000. Therefore, the stockholders' equity was:
- A.
$3,900,000
- B.
$1,100,000
- C.
$2,500,000
- D.
$2,000,000
- E.
Cannot be determined from the information given above
Correct Answer
B. $1,100,000Explanation
The stockholders' equity can be calculated by subtracting the total liabilities from the total assets. In this case, the total liabilities are the sum of the total current liabilities and total long-term liabilities, which is $900,000 + $500,000 = $1,400,000. Subtracting this from the total assets of $2,500,000 gives us the stockholders' equity of $1,100,000.Rate this question:
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Mar 21, 2023Quiz Edited by
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Sep 30, 2011Quiz Created by
Madeleine.bannon
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