ACCT 221-Accounting 1 Exam # 3 A (Chapters 9-11) Fail 2017 PartI (17 points) For

Question

ACCT 221-Accounting 1 Exam # 3 A (Chapters 9-11) Fail 2017 PartI (17 points) For each multiple choice question, select the one best answer and mark the appropriate box on the Scantron form. 1. The amount of sales tax collected by a retail store when making sales is a. a miscellaneous revenue for the store. b. a current liability. c. not recorded because it is a tax paid by the customer. d. recorded as an operating expense. 2. Jason Hansen has invested $600,000 in a corporation. The corporation does not do well and must declare bankruptcy. At the time of bankruptcy, the corporation owes $1,000,00 to its creditors. What amount does Hansen stand to lose? Up to his total investment of $600,000 a. b. Zero c. The $600,000 investment, plus $400,000 of Hansen's personal assets d. $400,000 3. Which of the following is not true of ordinary repairs? a. They primarily benefit the current accounting period. b. They can be referred to as an expense. They maintain the expected productive life of the asset. c. d. They increase the productive capacity of the asset 4. Goodwill can be recorded a. 'when customers keep returning because they are satisfied with the company's products when the company acquires a good lo?ation for its business. when the company has exceptional management. b. c. d. only when a company purchases another existing business. A corporation has the following account balances: Common Stock, S1 par value, $40,000; Paid-in Capital in Excess of Par Value, $1,800,000. Based on this information, the a. Total paid in capital is $1,800,000. b. number of shares issued is 40,000. c. number of shares outstanding is 1,840,000. d. average price per share issued is $4.60. Treasury stock is a. stock issued by the U.S. Treasury Department b. stock purchased by a corporation and held as an investment in its treasury. c. corporate stock issued by the treasurer of a company. d. a corporation's own stock, which has been reacquired and held for future use.

Explanation / Answer

1 b. a current liability

(Becasue the sales tax collected by the store have to pay to gooverment within specified time)

2 a. upto to his total investment of $600,000

3 d. They increase the productive capacity of the asset.

(ordinary repairs are charged to reapirs expenses when incurred, it does not improve an asset or extend the asset's life)

4 d. only when a company purchase of another existing business.

5 b. number of shares issued is 40,000

6 d. a corporations's own stock, which had been reacquired and held for future use

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