28 125.000 12.500 180.000 200,000 Our company had the following information for its equipment: Accumulated depreciation of the equipment The equipment's depreciation expense this year Market value of the equipment Original cost of the equipment What is the 'book value of the equipment? A 187.500 B 200,000 75,000 D 180,000 None of the other answers is correct 29 6 For a corporation, the price/earnings ratio is shown on the face of which financial statement? A Income statement B Statement of changes in stockholders' equity Balance sheet D Statement of cash flows E None of the other answers is correct E70 30 A debit to discount on notes payable" would be made when recording A Interest expense on a non interest bearing note B Interest expense on an interest bearing note the issuance of a non interest bearing note D the issuance of an interest bearing note 74 ETS ETG 31 . A B An employee received a thousand stock options from her employer which have an exercise price of $42.15 per share. Today, the market price of the stock covered by the stock option is $42.89. Given these facts, She would not exerdse the options because she would lose $740. Exercising the option today would be a rational choice of the price of the stock appears to be rising daily, she would be better off to walt and consider exercising the option later. 32 When does a prior period adjustment appear on a statement of retained earnings? when an error was discovered in the current year and corrected in a prior year when there has been a change in accounting principles in the current year when an error occurred in a prior year and was corrected in the current year D nowhere on the statement of retained earnings B 320 21 SZ 33 "Current portion of long term debt" goes where on the financial statements? Income statement in other gains and losses B balance sheet in current assets balance sheet in current liabilities D balance sheet in long term debt c 34 The statement of cash flows is a financial statement that provides information for a particular point in time B a period of time either a point in time or a period of time, as management directs D Investors, but it is not a financial statement 01 35 OG A 600,000 This year, our company discovered that last year we failed to record a sale of $600,000 on account. The merchandise which we sold for $600,000 had cost us $400,000. We use the perpetual inventory system. What entrylles) should we make this year? Accounts receivable 600,000 Sales B Accounts receivable 600,000 Retained earnings Merchandise inventory C Accounts receivable 600,000 Sales Cost of goods sold 400,000 Merchandise inventory D None of the other answers is correct 200,000 400,000 GEEGEES 600,000 600,000