Question
1. Issued common stock for cash. Purchased equipment by signing a note payable. Provided services to customers on account. Collected cash from customers on account.
- 1. Issued common stock for cash.
Purchased equipment by signing a note payable. Provided services to customers on account.
Collected cash from customers on account.
How many of the above transactions increased the given company's total liabilities?
- Two. B) One. C) Four. D) Three.
- 2 ABC purchased a computer that cost $10,000. It had an estimated useful life of 5 years and no residual value. The computer was depreciated by the straight-line method and was sold at the end of the fourth year of use for $3,000 cash. ABC should record:
- a loss of $1,000.
- neither a gain nor a loss - the gain that occurred in this case would not be recognized.
- a gain of $1,000.
- neither a gain nor a loss - the computer was sold at its book value.
- 3. ABC purchased equipment for $60,000 on January 1, 2018. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years.
Using the straight-line method, depreciation expense for 2019 and the book value at December 31, 2019 would be:
A) $12,000 and $36,000. B) $11,000 and $38,000.
C) $11,000 and $33,000. D) $12,000 and $31,000.
- 4.At the end of a reporting period, ABC determines that its ending inventory has a cost of $300,000 and a net realizable value of $230,000. What would be the effect(s) of the adjustment to write down inventory to net realizable value?
- Decrease total assets. B) Decrease net income.
C) Decrease total assets and net income. D) Increase retained earnings.
- 5.The sale of a good or service is classified in the statement of cash flows as a(n):
- Noncash activity. B) Financing activity.
C) Operating activity. D) Investing activity.
- 6.When we sign an Executory Contract, generally
- Expenses Increase
- Liabilities Increase
- No change to the Balance Sheet and no change to the Income Statement
Assets increase
- 7.Suppose that ABC overstates its ending inventory for 2018. What effect will this have on the reported amount of cost of goods sold for 2018?
- Cannot be determined given the information provided.
- Have no effect on cost of goods sold.
- Understate cost of goods sold.
- Overstate cost of goods sold.
- 8. If your employer declares bankruptcy, this can have a major effect on your pension if you are in a
- Either plan B) Defined Benefit Plan
C) Neither Plan D) Defined Contribution Plan
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