Matching
Match each transaction to the effect on ratios
Premises:
Purchased supplies on account to be used next month.
Paid accounts payable.
Issued a $1,000 short-term note payable for $970.
Amortized the discount of the short-term note payable.
A portion of long-term debt is due next year.
Declared cash dividends to holders of stock.
Paid the cash dividend previously declared.
Received money from customer prior to delivery of the product to the customer.
Delivered product to a customer who previously paid for that product.
Collected sales tax on behalf of the state government.
Accrued payroll taxes the firm has to pay to the federal government within three months.
Paid a bonus (not previously accrued) amounting to 5% on reported income to the CEO for the current year.
A large payment is remotely probable resulting from a lawsuit filed against the firm.
A large payment is reasonably probable resulting from a lawsuit filed against the firm.
A $10,000 payment is highly probable resulting from a lawsuit filed against the firm.
Bondholder converted bond into stock through conversion feature.
Responses:
Increase in debt/equity ratio
Decrease in debt/equity ratio
Does not change debt/equity ratio
Correct Answer:
Premises:
Responses:
Purchased supplies on account to be used next month.
Paid accounts payable.
Issued a $1,000 short-term note payable for $970.
Amortized the discount of the short-term note payable.
A portion of long-term debt is due next year.
Declared cash dividends to holders of stock.
Paid the cash dividend previously declared.
Received money from customer prior to delivery of the product to the customer.
Delivered product to a customer who previously paid for that product.
Collected sales tax on behalf of the state government.
Accrued payroll taxes the firm has to pay to the federal government within three months.
Paid a bonus (not previously accrued) amounting to 5% on reported income to the CEO for the current year.
A large payment is remotely probable resulting from a lawsuit filed against the firm.
A large payment is reasonably probable resulting from a lawsuit filed against the firm.
A $10,000 payment is highly probable resulting from a lawsuit filed against the firm.
Bondholder converted bond into stock through conversion feature.
Premises:
Purchased supplies on account to be used next month.
Paid accounts payable.
Issued a $1,000 short-term note payable for $970.
Amortized the discount of the short-term note payable.
A portion of long-term debt is due next year.
Declared cash dividends to holders of stock.
Paid the cash dividend previously declared.
Received money from customer prior to delivery of the product to the customer.
Delivered product to a customer who previously paid for that product.
Collected sales tax on behalf of the state government.
Accrued payroll taxes the firm has to pay to the federal government within three months.
Paid a bonus (not previously accrued) amounting to 5% on reported income to the CEO for the current year.
A large payment is remotely probable resulting from a lawsuit filed against the firm.
A large payment is reasonably probable resulting from a lawsuit filed against the firm.
A $10,000 payment is highly probable resulting from a lawsuit filed against the firm.
Bondholder converted bond into stock through conversion feature.
Responses:
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