10 simple accounting questions (you only get paid for this answer if all 10 are correct)

1.

The company that issues (sells) the debt or equity to another company is called

Select one:

a.the investor

b.the supplier

c.the investee

d.the portfolio builder

2.

Which of the following is not correct?

Select one:

a.All bonds have a maturity date.

b.Income from equity investments can come from reselling the investment at a higher price.

c.Income from bonds can come from interest earned.

d.Income from equity investments can come from interest earned.

3.

Under the equity method, when shares are purchased, the brokerage fees paid by the investor must be

Select one:

a.recorded as a debit to brokerage fee expense, which is reported in the operating expenses section of the income statement

b.recorded as a debit to brokerage fee expense, which is reported in the other expenses section of the income statement

c.recorded as a debit to prepaid expense, which is reported in the current assets section of the balance sheet

d.added to the purchase price and recorded as part of the investment in associate account

4.

Which of the following is not a characteristic of T-bills?

Select one:

a.Zero-coupon bonds

b.Maturity date between one month to one year

c.Higher purchase price than face value

d.Issued and backed by the government

5.

Helmett Company sold its $200,000 bonds before maturity, when the book value of the bonds (after updating interest and discount amortization) was $180,000. Helmett received $190,000 for the bonds. The early redemption was recorded on Helmett's books as a

Select one:

a.loss on sale of bonds, which is reported in the other expenses section of the income statement

b.gain on sale of bonds, which is reported in the other revenue section of the income statement

c.gain on sale of bonds, which is reported in the operating income section of the income statement

d.loss on sale of bonds, which is reported in the operating expenses section of the income statement

6.

Which of the following are not debt instruments?

Select one:

a.Money market funds

b.Preferred shares

c.Treasury bills

d.Bonds

7.

Income from investments would not include which of the following?

Select one:

a.gains on the sale of investments

b.dividends

c.interest

d.royalties

8.

Other comprehensive income can arise from

Select one:

a.dividend income

b.interest income

c.changes in the market value of long-term investments

d.the purchase of a treasury bill at the price below its face value

9.

The cost method can be used when

Select one:

a.the investor has control over the investee

b.the investor uses IFRS

c.the investee's shares have no quoted market price

d.the investment in the investee's shares is considered non-strategic

10.

Mallard Company, a public company, owns 10% of Duck Inc.'s shares as part of Mallard's strategic investments. On December 31, Duck Inc. pays out a cash dividend to its shareholders. The journal entry that Mallard would record for receipt of this dividend would include

Select one:

a.a Credit to Cash

b.a Credit to Investment in AssociateDuck Inc.

c.a Credit to Dividend Revenue

d.a Debit to Investment in AssociateDuck Inc.