Question 15 Bonds that have interest coupons attached to their certificates, whi

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Question 15

Bonds that have interest coupons attached to their certificates, which the bondholders detach during each interest period and present to a bank for collection, are called:

Coupon bonds.

Callable bonds.

Serial bonds.

Convertible bonds.

Registered bonds.

2.8 points   

Question 16

The board of directors of a corporation:

Are elected by the corporate registrar.

Are responsible for day-to-day operations of the business.

Do not have the power to bind the corporation to contracts, due to lack of mutual agency.

May not also be executive officers of the corporation, due to the separate entity principle.

Are responsible for and have final authority for managing corporate activities.

2.8 points   

Question 17

A company had net income of $40,000, net sales of $300,000, and average total assets of $200,000. Its profit margin and total asset turnover were respectively:

13.3%; 0.2.

13.3%; 1.5.

2.0%; 1.5.

1.5%; 0.2.

1.5%; 13.3.

2.8 points   

Question 18

A company purchased an investment in stock for $65,000 eight months ago. The investment is classified as AFS - available-for-sale securities. The current fair value of the stock is $68,500. The company should record a:

Debit to Unrealized Loss-Equity for $3,500.

Credit to Unrealized Gain-Equity for $3,500.

Debit to Investment Revenue for $3,500.

Credit to Market Adjustment - Available-for-Sale for $3,500.

Credit to Investment Revenue for $3,500.

2.8 points   

Question 19

Receivables can be used to obtain cash by either selling them or using them as security for a loan.

True

False

2.8 points   

Question 20

To provide security to creditors and to reduce interest costs, bonds and notes payable can be secured by:

Safe deposit boxes.

Mortgages.

Equity.

The FASB.

Debentures.

2.8 points   

Question 21

A company received cash proceeds of $206,948 on a bond issue with a par value of $200,000. The difference between par value and issue price for this bond is recorded as a:

Credit to Interest Income.

Credit to Premium on Bonds Payable.

Credit to Discount on Bonds Payable.

Debit to Premium on Bonds Payable.

Debit to Discount on Bonds Payable.

2.8 points   

Question 22

The employer should record payroll deductions as:

Employee receivables.

Payroll taxes.

Current liabilities.

Wages payable.

Employee payables.

2.8 points   

Question 23

A component of operating efficiency and profitability, calculated by expressing net income as a percent of net sales, is the:

Acid-test ratio.

Merchandise turnover.

Price earnings ratio.

Accounts receivable turnover.

Profit margin ratio.

2.8 points   

Question 24

David and Jeannie formed This & That as a limited liability company. Unless the member owners elect to be treated otherwise, the Internal Revenue Service will tax the LLC as:

An S corporation.

A C corporation.

A non-taxable entity.

A joint venture.

A partnership.

2.8 points   

Question 25

Total asset turnover is calculated by dividing:

Gross profit by average total assets.

Average total assets by gross profit.

Net sales by average total assets.

Average total assets by net sales.

Net assets by total assets.

2.8 points   

Question 26

Prudence Co. receives a $26,000, 90-day, 4% note receivable. What is the amount of interest that is due at maturity?

Path: p

Words:0

10 points   

Question 27

Explain the impact, if any, on depreciation when estimates that determine depreciation change.

Path: p

Words:0

10 points   

Question 28

Carter Pearson is a partner in Event Promoters. His beginning partnership capital balance for the current year is $55,000, and his ending partnership capital balance for the current year is $62,000. His share of this year's partnership income was $6,250. What is his partner return on equity?

Path: p

Words:0

Coupon bonds.

Callable bonds.

Serial bonds.

Convertible bonds.

Registered bonds.

Explanation / Answer

15) coupon bonds

16) Are responsible for and have final authority for managing corporate activities.

17) 1.5% .2

18) Credit to Market Adjustment - Available-for-Sale for $3,500

19) true

20) Debentures

21) Credit to Premium on Bonds Payable

22) Wages payable

23) Profit margin ratio.

24) A partnership

25) Average total assets by net sales.

26) 260

27) retrospective effect should be applicable

28) $750

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