Question 1

A line of credit helps a company deal with temporary cash shortages.

Accepted Answer

A) True 
 B)False  True

Question 2

A company has $5,000,000 in long-term debt outstanding. They expect to repay it evenly over the next four years. Which of the following represents how it will be shown on the year-end balance sheet?

Accepted Answer

A)  Accounts Payable: $1,250,000, Long-Term Debt: $3,750,000 
B)  Current Portion of Long-Term Debt: $1,250,000, Long-Term Debt: $3,750,000 
C)  Current Portion of Long-Term Debt: $2,500,000, Long-Term Debt: $2,500,000 
D)  Long-Term Debt: $5,000,000 
A)  Accounts Payable: $1,250,000, Long-Term Debt: $3,750,000 
B)  Current Portion of Long-Term Debt: $1,250,000, Long-Term Debt: $3,750,000 
C)  Current Portion of Long-Term Debt: $2,500,000, Long-Term Debt: $2,500,000 
D)  Long-Term Debt: $5,000,000 B

Question 3

The difference between the face value of a liability and its present value is due to the time value of money.

Accepted Answer

A) True 
 B)False  True

Question 4

For which of the following reasons would a user examine the current liabilities?

Accepted Answer

A)  to determine how quickly accounts receivable are collected 
B)  to determine how much cash will be required to meet obligations in the short-term 
C)  to determine how much cash will be required to meet obligations in the long-term 
D)  to evaluate company performance 
A)  to determine how quickly accounts receivable are collected 
B)  to determine how much cash will be required to meet obligations in the short-term 
C)  to determine how much cash will be required to meet obligations in the long-term 
D)  to evaluate company performance

Question 5

All of the following are ways that corporations can finance current cash shortages EXCEPT a

Accepted Answer

A)  line of credit. 
B)  current portion of long-term debt. 
C)  short-term loan. 
D)  working capital loan. 
A)  line of credit. 
B)  current portion of long-term debt. 
C)  short-term loan. 
D)  working capital loan.

Question 6

The awarding of frequent flyer miles by airline companies is accounted for in a manner similar to

Accepted Answer

A)  warranty expenses. 
B)  accounts payable. 
C)  contingent liabilities. 
D)  commitments. 
A)  warranty expenses. 
B)  accounts payable. 
C)  contingent liabilities. 
D)  commitments.

Question 7

The accounts payable turnover ratio measures

Accepted Answer

A)  number of times the company settles its trade payable. 
B)  average accounts payable balance. 
C)  the average number of times the industry settles their trade payable. 
D)  the average balance of accounts payable to current assets. 
A)  number of times the company settles its trade payable. 
B)  average accounts payable balance. 
C)  the average number of times the industry settles their trade payable. 
D)  the average balance of accounts payable to current assets.

Question 8

During 2017 Albany Appliances sold 400 appliances worth $2,000,000. Each appliance comes with a one-year warranty, which Albany estimates will cost $75 each. During the year Albany spent $12,500 on warranty costs for the appliances sold in 2017. At the end of the 2017 the warranty liability and the warranty expense related to these sales would be closest to

Accepted Answer

The answer of During 2017 Albany Appliances sold 400 appliances...

Question 9

Maynard Manufacturing has a two-week payroll of $8,200 for its eight employees. Income tax of $1,080 is deducted from the employees' cheques, as well as 4.95% for CPP and 1.88% for EI. Wages deposited in employees' bank accounts would be

Accepted Answer

A)  $6,560. 
B)  $7,120. 
C)  $7,640. 
D)  $8,200. 
A)  $6,560. 
B)  $7,120. 
C)  $7,640. 
D)  $8,200.

Question 10

Bankers will often compare current assets to current liabilities to assess viability.

Accepted Answer

A) True 
 B)False

Question 11

Lokus Lofts is a rental company that requires its tenants to pay rent one month in advance. Lokus should record the cash received as

Accepted Answer

A)  Prepaid Rent. 
B)  Rent Revenue. 
C)  Unearned Revenue. 
D)  Accounts Payable. 
A)  Prepaid Rent. 
B)  Rent Revenue. 
C)  Unearned Revenue. 
D)  Accounts Payable.

Question 12

Which of the following is NOT a characteristic of a liability?

Accepted Answer

A)  There is a probable future sacrifice of resources. 
B)  There is a fixed payment amount and payment date. 
C)  There is little discretion to avoid the obligation. 
D)  The event giving rise to the liability has already occurred. 
A)  There is a probable future sacrifice of resources. 
B)  There is a fixed payment amount and payment date. 
C)  There is little discretion to avoid the obligation. 
D)  The event giving rise to the liability has already occurred.

Question 13

Use the following information for questions 40-42.
Melman Microscopes Inc. offers a two-year warranty against failure of its products. The estimated liability is 1.5% in the year of sale and 3% in the second year. Sales and actual warranty expense for 2016 and 2017 were:  
-The warranty expense for 2017 was

Accepted Answer

A)  $157,500. 
B)  $175,500. 
C)  $195,000. 
D)  $305,000. 
A)  $157,500. 
B)  $175,500. 
C)  $195,000. 
D)  $305,000.

Question 14

Typically acquisition costs for inventory can be financed through the use of

Accepted Answer

A)  overdraft protection. 
B)  accounts payable. 
C)  working capital. 
D)  notes payable. 
A)  overdraft protection. 
B)  accounts payable. 
C)  working capital. 
D)  notes payable.

Question 15

Accounting standards require that liabilities be recorded at their present value.

Accepted Answer

A) True 
 B)False

Question 16

When the board declares dividends, the correct journal will be

Accepted Answer

A)  Dividends Expense Dividends Payable 
B)  Dividend Declared Cash 
C)  Dividends Declared Dividends Payable 
D)  Dividends Receivable Dividends Revenue 
A)  Dividends Expense Dividends Payable 
B)  Dividend Declared Cash 
C)  Dividends Declared Dividends Payable 
D)  Dividends Receivable Dividends Revenue

Question 17

All current liabilities have fixed due dates and fixed payment amounts.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following liabilities results from amounts owed by BOTH the employee and the employer?

Accepted Answer

A)  employee income tax payable 
B)  wages payable 
C)  employment insurance payable 
D)  vacation pay payable 
A)  employee income tax payable 
B)  wages payable 
C)  employment insurance payable 
D)  vacation pay payable

Question 19

Which of the following liabilities is often referred to as "free debt" because it rarely carries any interest if paid within a specified period of time?

Accepted Answer

A)  line of credit 
B)  working capital loan 
C)  accounts payable 
D)  None of the above-all current liabilities carry an interest rate. 
A)  line of credit 
B)  working capital loan 
C)  accounts payable 
D)  None of the above-all current liabilities carry an interest rate.

Question 20

Which of the following companies would usually NOT have an unearned revenue account?

Accepted Answer

A)  magazine publishing company 
B)  property management company 
C)  airline 
D)  hardware store 
A)  magazine publishing company 
B)  property management company 
C)  airline 
D)  hardware store

A line of credit helps a company deal with temporary cash shortages.

A company has $5,000,000 in long-term debt outstanding. They expect to repay it evenly over the next four years. Which of the following represents how it will be shown on the year-end balance sheet?

The difference between the face value of a liability and its present value is due to the time value of money.

For which of the following reasons would a user examine the current liabilities?

All of the following are ways that corporations can finance current cash shortages EXCEPT a

The awarding of frequent flyer miles by airline companies is accounted for in a manner similar to

The accounts payable turnover ratio measures

Maynard Manufacturing has a two-week payroll of $8,200 for its eight employees. Income tax of $1,080 is deducted from the employees' cheques, as well as 4.95% for CPP and 1.88% for EI. Wages deposited in employees' bank accounts would be

Bankers will often compare current assets to current liabilities to assess viability.

Lokus Lofts is a rental company that requires its tenants to pay rent one month in advance. Lokus should record the cash received as

Which of the following is NOT a characteristic of a liability?

Typically acquisition costs for inventory can be financed through the use of

Accounting standards require that liabilities be recorded at their present value.

When the board declares dividends, the correct journal will be

All current liabilities have fixed due dates and fixed payment amounts.

Which of the following liabilities results from amounts owed by BOTH the employee and the employer?

Which of the following liabilities is often referred to as "free debt" because it rarely carries any interest if paid within a specified period of time?

Which of the following companies would usually NOT have an unearned revenue account?

Overview of Corporate Financial Reporting

Nalyzing Transaction and Their Effect on Financial Statement

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Incom

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Inventory

Long-Term Liabilities

Shareholders Equity

Financial Statement Analysis

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Exam 9: Long-Term Assets

A line of credit helps a company deal with temporary cash shortages.

A company has $5,000,000 in long-term debt outstanding. They expect to repay it evenly over the next four years. Which of the following represents how it will be shown on the year-end balance sheet?

The difference between the face value of a liability and its present value is due to the time value of money.

For which of the following reasons would a user examine the current liabilities?

All of the following are ways that corporations can finance current cash shortages EXCEPT a

The awarding of frequent flyer miles by airline companies is accounted for in a manner similar to

The accounts payable turnover ratio measures

Maynard Manufacturing has a two-week payroll of $8,200 for its eight employees. Income tax of $1,080 is deducted from the employees' cheques, as well as 4.95% for CPP and 1.88% for EI. Wages deposited in employees' bank accounts would be

Bankers will often compare current assets to current liabilities to assess viability.

Lokus Lofts is a rental company that requires its tenants to pay rent one month in advance. Lokus should record the cash received as

Which of the following is NOT a characteristic of a liability?

Typically acquisition costs for inventory can be financed through the use of

Accounting standards require that liabilities be recorded at their present value.

When the board declares dividends, the correct journal will be

All current liabilities have fixed due dates and fixed payment amounts.

Which of the following liabilities results from amounts owed by BOTH the employee and the employer?

Which of the following liabilities is often referred to as "free debt" because it rarely carries any interest if paid within a specified period of time?

Which of the following companies would usually NOT have an unearned revenue account?

Overview of Corporate Financial Reporting

Nalyzing Transaction and Their Effect on Financial Statement

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Incom

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Inventory

Long-Term Liabilities

Shareholders Equity

Financial Statement Analysis

Filters