1)

Babble Co. signs a five-year installment note on January 1, 2021. At which of the following dates would the carrying value be the lowest?

A) August 1, 2021

B) November 30, 2023

C) April 30, 2024

D) December 31, 2022

2)

In the operating activities section of the statement of cash flows, we start with net income when using:

A) The direct method.

B) The indirect method.

C) Both the direct and the indirect method.

D) Neither the direct nor the indirect method.

3)

The Surf's Up issues 1,000 shares of 6%, $100 par value preferred stock at the beginning of 2020. All remaining shares are common stock. The company was not able to pay dividends in 2020, but plans to pay dividends of $18,000 in 2021.

Assuming the preferred stock is cumulative, how much of the $18,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders in 2021?

A) $6,000 to preferred stockholders and $12,000 to common stockholders.

B) $18,000 to preferred stockholders and $0 to common stockholders.

C) $12,000 to preferred stockholders and $6,000 to common stockholders.

D) $9,000 to preferred stockholders and $9,000 to common stockholders.

4)

What is the primary purpose of financial accounting?

A) Determine the amount of tax liability owed to the government.

B) Communicate business activities to internal management.

C) Measure business activities and communicate those measures to external users to make decisions.

D) Measure the profitability of the company in order to assist employees with making decisions.

5)

Bonds can be secured or unsecured. Likewise, bonds can be term or serial bonds. Which is more common?

A) Secured and term.

B) Secured and serial.

C) Unsecured and term.

D) Unsecured and serial.