Company A was sued by Company B. The management of Company A feels that it is probable that it will have to pay the full amount to Company 8. What is the effect of this contingent event on Company A's accounting equation? Increase liabilities and decrease stockholders' equity. Increase assets and increase stockholders' equity. No effect on the accounting equation. Decrease assets and decrease liabilities. A QUESTION 21 The premium on bonds payable can be considered as: A reduction to the interest expense of the year the bond matures. An addition to the interest expense over the life of the bond. A liability in the year the bond is issued A reduction to the interest expense over the life of the bond. The accounts receivable account for James Rivers Inc. had a beginning balance of $6,000. During the month, the company received payments of $8,000 and additional accounts of $11,000. The ending balance in accounts receivable is and is a $9.000, debit $3,000, debit $3,000, credit $9,000, credit Which one of the following is NOT consistent with the goal of maintaining high quality earnings? Improving the operating income over sales ratio Recognizing revenue when customers order services and pay cash. Recording expenses in the same period as revenues are recognized. Holding corporate executives accountable for the content of their companies financial statements. QUESTION 19 KY Technology issued 10 year $400,000 bonds on 1/1/2010. The bonds are callable at 102. On 12/31/2011, unamortized discount on bonds payable after recording Interest expense was $24,000. KY Technology Inc. decided to retire all of the bonds on 12/31/2011. What is the amount of loss for retiring the bonds early for KY Technology Inc.? $16.000 $56,000 $32,000 $24,000 The carrying value of the bond is: the price at which the bond was issued. the face value minus the unamortized discount on bonds payable. als called the principal of the bond. the balance of the premium on bonds payable The person who prepares the bank reconciliation: should be responsible for both cash receipts and cash disbursements. should also be responsible for cash disbursements. should also be responsible for cash receipts. should have no other cash duties. The date, which follows the date of declaration, and determines which shareholders will receive the dividend is the: distribution date. payment date. date of record. determination date. QUESTION 12 Which of the following transactions does NOT decrease cash? Stock splits Stock retirements Cash dividends Treasury stock purchases