Deck 3: Balance Sheet

Question 1

Which of the following accounts would not be classified as an intangible?

A)Franchises
B)Research and development
C)Patent
D)Trademarks
E)Goodwill

Answer 1

B

Question 2

Which of the following is not a common characteristic of preferred stock?

A)Voting rights
B)Preference as to dividends
C)Preference in liquidation
D)Callability by the corporation
E)None of the answers are correct.

Answer 2

A

Question 3

At the beginning of the year, Execon Company had total assets of $200,000, total liabilities of $110,000, and shareholders' equity of $90,000.For the year, Execon Company earned net income of $75,000 and declared cash dividends of $30,000.At the end of the year, the company had total assets of $300,000 and its shareholders' equity was at $135,000.At the end of the year, Execon Corporation had total liabilities of:

A)$0.
B)$45,000.
C)$50,000.
D)$165,000.
E)None of the answers are correct.

Answer 3

D

Question 4

Which of the following is not true relating to treasury stock?

A)A firm creates treasury stock when it repurchases its own stock and does not retire it.
B)Treasury stock lowers the stock outstanding.
C)Treasury stock may be recorded at the cost of the stock.
D)Treasury stock may be recorded at par or stated value.
E)Treasury stock is, in essence, an increase in paid-in capital.

Question 5

Which of the following is a current liability?

A)Prepaid insurance
B)Retained earnings
C)Unearned rent revenue
D)Bonds payable
E)Common stock

Question 6

The current asset section of the balance sheet should include:

A)land.
B)trademarks.
C)investment in C Company (for purposes of control).
D)dividends payable.
E)work in process inventory.

Question 7

Which of the following is not true about an ESOP?

A)An ESOP will reduce the amount of voting stock in the hands of employees.
B)An ESOP must be a permanent trusted plan for the exclusive benefit of the employees.
C)The plan participants become eligible for favorable taxation of distributions from the plan.
D)Commercial lending institutions, insurance companies, and mutual funds are permitted an exclusion from income for 50% of the interest received on loans used to finance an ESOP's acquisition of company stock.
E)An ESOP may reduce the potential of an unfriendly takeover.

Question 8

If a parent has some control over a subsidiary but the subsidiary is not consolidated, the subsidiary is accounted for as:

A)a marketable security.
B)an investment.
C)a liability.
D)a fixed asset.
E)None of the answers are correct.

Question 9

Which of the following is not a problem inherent in balance sheet presentation?

A)Most assets are valued at cost.
B)Varying methods are used for asset valuation.
C)Not all items of value to the firm are included as assets.
D)Liabilities related to contingencies may not appear on the balance sheet.
E)The owners' interest will be indicated.

Question 10

The current liability section of the balance sheet should include:

A)buildings.
B)goodwill.
C)land held for speculation purposes.
D)accounts payable.
E)None of the answers are correct.

Question 11

The most popular depreciation method for financial reporting is the following:

A)units-of-production.
B)sum-of-the-years'-digits.
C)declining-balance.
D)straight-line.
E)other.

Question 12

Company A owns shares of Company B and Company C.The statements of Company B are consolidated with those of Company A.The statements of Company C are not consolidated.Company A reports "Noncontrolling Interest" on its balance sheet.This account represents:

A)A's noncontrolling share of the stock of B.
B)A's noncontrolling share of the stock of C.
C)the noncontrolling share by outside owners of the stock of A.
D)the noncontrolling share by outside owners of the stock of B.
E)the noncontrolling share by outside owners of the stock of C.

Question 13

Drama Products Inc.has issued redeemable preferred stock.For analysis purposes, these securities are best classified as:

A)marketable securities.
B)long-term investments.
C)long-term debt.
D)paid-in capital.
E)retained earnings.

Question 14

Tangible assets on the balance sheet should include:

A)equipment.
B)inventory.
C)trademarks.
D)investments.
E)accrued insurance.

Question 15

The balance sheet reports:

A)the assets, liabilities, gains, and losses for a period of time.
B)the changes in assets, liabilities, and equity for a period of time.
C)the assets, expenses, and liabilities as of a certain date.
D)the probable future benefits, probable future sacrifices, and residual interest for a period of time.
E)the financial condition of an accounting entity as of a particular date.

Question 16

Treasury stock is best classified as:

A)a current asset.
B)a long-term investment.
C)a contra liability.
D)a reduction of stockholders' equity.
E)a reduction of retained earnings.

Question 17

Which of the following is not a current asset?

A)Marketable securities
B)Material inventory
C)Unearned rent income
D)Prepaid interest
E)Accrued insurance

Question 18

Which of the following would not appear on a conventional balance sheet?

A)Income taxes payable
B)Funds from operations
C)Cash surrender value of life insurance
D)Appropriation for contingencies (restriction of retained earnings)
E)Patents

Question 19

Which of the following is not a proper use of notes?

A)To describe the nature and effect of a change in accounting principle, such as from FIFO to LIFO.
B)To indicate the basis for asset valuation.
C)To indicate the method of depreciation.
D)To correct an improper financial statement presentation.
E)To describe a firm's debt.

Question 20

Ownership of debt instruments of the government and other companies that can be readily converted to cash are best reported as:

A)long-term investments.
B)cash.
C)marketable securities.
D)intangibles.
E)inventory of near-cash items.

Question 21

Noncontrolling interest reflects the ownership of noncontrolling shareholders in the equity of consolidated subsidiaries that are less than wholly owned.

Question 22

Deferred taxes are caused by using different accounting methods for tax and financial reporting purposes.

Question 23

Generally accepted accounting principles and the Internal Revenue Code of tax law require that the same depreciation method be used for both the financial statements and the federal tax return.

Question 24

All intangibles are amortized over their useful lives or their legal lives, whichever is shorter.

Question 25

Warranty obligations are estimated in order to recognize the obligation at the balance sheet date and to charge the expense to the period of the sale.

Question 26

The principal financial statements are the balance sheet, income statement, and statement of cash flows.

Question 27

Corporations do not use a standard title for owners' equity.

Question 28

If dividends are not declared by the board of directors in a particular year, a holder of cumulative preferred stock will never be paid that dividend.

Question 29

The financial statements of legally separate entities may be issued to show the financial position and income as they would appear if the companies were one legal entity.Such statements reflect a legal, rather than an economic, concept of the entity.

Question 30

A sole proprietorship form of business has only one owner.

Question 31

Which of the following would not be considered a subsequent event to financial statements?

A)A major customer declares bankruptcy subsequent to the balance sheet date, but prior to issuing the statements.This event was not considered on the balance sheet date.
B)A major purchase of a subsidiary to the balance sheet date, but prior to issuing the statements.
C)Substantial debt incurred subsequent to the balance sheet date, but prior to issuing the statements.
D)Substantial stock issued subsequent to the balance sheet date, but prior to issuing the statements.
E)Hiring of employees for a new store, subsequent to the balance sheet date, but prior to issuing the statements.

Question 32

Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

Question 33

When preferred stock has a preference as to dividends, the current year's preferred dividend must be paid before a dividend can be paid to common stockholders.

Question 34

Long-term investments, usually stocks and bonds of other companies, are often held to maintain a business relationship or exercise control.

Question 35

When a firm repurchases its own stock and retires it, the stock is called treasury stock.

Question 36

The stockholders' equity section of the balance sheet includes redeemable preferred stock.

Question 37

The purpose of a balance sheet is to show the financial condition of an accounting entity for a period of time.

Question 38

Current assets are listed on the balance sheet in order of liquidity.

Question 39

A quasi-reorganization is an accounting procedure equivalent to an accounting fresh start.

Question 40

Preferred stock usually has voting rights.

Question 41

Noncontrolling interest should be presented at the bottom of stockholders equity.

Question 42

When the bond market interest rate is 6% and the bond contractual interest rate is 8%, the bond will sell at a premium.

Question 43

The deferred compensation element of an equity-based deferred compensation arrangement is the amount of compensation cost deferred and amortized (expensed) to future periods as the services are provided.

Question 44

The Internal Revenue Code penalizes borrowing for an ESOP.

Question 45

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Accounts Payable

Question 46

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Accrued Liabilities

Question 47

Under IFRS, reserves may result from upward revaluations of properties and investments.

Question 48

The analyst must assume that securities classified as marketable securities are readily marketable.

Question 49

Noncontrolling interest reflects the ownership of noncontrolling stockholders in the equity of consolidated subsidiaries less than wholly occurred.

Question 50

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Accounts Receivable

Question 51

IFRS require a standard format for the balance sheet.

Question 52

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Accumulated Depreciation

Question 53

The balance sheet is presented with the assets equal to liabilities plus equity.When this presentation is presented side by side, it is called the account form.

Question 54

Subsequent events are those that occur after the balance sheet date, but before the statements are issued.

Question 55

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Common Stock

Question 56

An ESOP is a qualified stock-bonus or combination stock-bonus and money-purchase pension plan designed to invest primarily in stock, other than the employer's securities.

Question 57

There are many alternative titles for the statement of stockholders' equity.The most frequently used alternative title is the statement of shareholders' equity.

Question 58

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Cash

Question 59

Using IFRS, usually noncurrent assets are presented first, followed by current assets.

Question 60

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Convertible Debentures

Question 61

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Deferred Income Taxes (liability)

Question 62

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Equipment

Question 63

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Noncontrolling Interest

Question 64

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Treasury Stock

Question 65

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Paid-In Capital in Excess of Par

Question 66

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Inventory

Question 67

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Land

Question 68

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Marketable Securities

Question 69

Match each account to the proper account description; not all letters will be used.
a.Stocks and bonds of other companies held for the purpose of exercising control.
b.An accumulation of the sum of the expense since the beginning of the benefit period.
c.Outside ownership in the equity of consolidated subsidiaries.
d.Machinery and tools, valued at historical cost.
e.Monies due because expenses, such as salaries, are incurred in a different period than when the cash outlay occurs.
f.The most liquid of assets, it may also include savings accounts.
g.Goods on hand.
h.A potential liability created by differing tax and reporting methods.
i.Ownership and debt instruments readily converted to cash.
j.An expenditure made in advance of the use of the service or good.
k.Monies due from customers arising from sale or service rendered.
l.The capital stock of residual owners.
m.Bonds that can be exchanged for stock at the option of the holder.
n.Undistributed earnings of the corporation.
o.Shares of the firm's own stock that have been repurchased.
p.Monies due for goods bought for use or resale.
q.Excess over legal par paid at time of sale.
r.Nondepreciable real estate.
s.Collections in advance of service.
t.Securities that give the holder the right to buy additional shares of common stock at a fixed price.
Retained Earnings