25 of35

Charmed, Inc. reacquired 5,000 shares of its $15-par common stock for $13/share. The debit to Treasury Stock will be

$65,000.

$75,000.

$10,000.

based on the last treasury stock transaction.

Question

26 of35

The basic unit of stock is called a(n)

authorization.

ownership record.

certificate.

share.

Question

27 of35

Accrued liabilities, such as interest payable, would be considered a(n)

unknown liability.

known liability.

contingent liability.

estimated liability.

Question

28 of35

By NOT accruing warranty expense

reported expenses will be understated, and net income will be understated.

reported expenses will be overstated, and reported liabilities will be understated.

reported liabilities will be understated, and net income will be overstated.

reported liabilities will be overstated, and net income will be understated.

Question

29 of35

Which of the following would NOT be a liability?

An obligation that is estimated in amount

The signing of a three-year employment contract at a fixed annual salary

A note payable with no specific maturity date

An obligation to provide goods or services in the future

Question

30 of35

One type of liability that is easy to overlook is a(n)

tax liability.

account payable.

contingent liability.

note payable.

Question

31 of35

Inventory turnover measures the relationship between

total assets and merchandise inventory.

cost of goods sold and total liabilities.

cost of goods sold and merchandise inventory.

merchandise inventory and current liabilities.

Question

32 of35

Transactions involving the purchase and sale of long-term assets, lending money, and collecting the principal on loans are called

operating activities.

investing activities.

financing activities.

buying and selling activities.

Question

33 of35

The Statement of Cash Flows reports the sources and uses of cash from all of the following EXCEPT

financing activities.

managerial activities.

operating activities.

investing activities.

Question

34 of35

Which of the following ratios measures the earnings of a company on each dollar of assets invested?

Return on equity

Return on assets

Return on sales

Current ratio

Question

35 of35

Are all decreases to cash the result of an unfavorable situation?

No. Cash could decrease as a result of acquiring long-term assets the company needs to expand or stay competitive.

Yes. Cash could decrease as a result of paying off long-term debt, which is an unfavorable action to take.

No. Cash could decrease because the company issued more stock.

Yes. Decreases to cash are always bad.