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Question 9

1. When should revenue from the sale of merchandise

A. When the customer takes possession of the merchandise.

B. When the customer takes possession of the merchandise, if sold for cash, or when payment is received, if sold on credit.

C. Either on the date the customer takes possession of the merchandise or on the date on which the customer pays.

D. When the customer pays for the merchandise.

2. All of the following are ways in which receivables are commonly classified in

A. Current or noncurrent.

B. Trade or nontrade receivable.

C. Collectible or uncollectible.

D. Accounts or notes receivable.

3. Which of the following transactions would not result iccount under a perpetual inventory system?

A. The return of merchandise by a customer.

B. The sale of merchandise for cash.

C. The sale of merchandise on credit.

D. The receipt of payment from a customer within the discount period.

4. Ignoring taxes, if a co]any understates ie currnt year,

A. Assets for the current year will be overstated by $10,000.

B. Cost of goods sold for the current year will be understated by $10,000.

C. Net income for the subsequent year will be overstated by $10,000.

D. Retained earnings for the current year will be unaffected.

5. Castanza Inc. decided to sell one of its tangihat was the resulting gain or loss from the sale?

A. $5,000 loss

B. $5,000 gain

C. $15,000 loss

D. $15,000 gain

6. Which method of calculating deiation of an asset resunt that reflects the usage of the asset:

A. Declining balance

B. Units of production

C. Straight line

D. Double declining balance

7. Bonds are soium if the

A. Market rate of interest was more than the stated rate at the time of issue.

B. Market rate of interest was less than the stated rate at the time of issue.

C. Company will have to pay a premium to retire the bonds.

D. Issuing company has a better reputation than other companies in the same business.

8. When bonds are issued at a discount, thehe period is

A. The amount of interest payment for the period plus the discount amortization for the period.

B. The amount of interest payment for the period minus the discount amortization for the period

C. The amount of interest payment for the period minus the premium amortization for the period

D. The amount of interest payment for the period plus the premium amortization for the period.

9. Harvey Corporation shows the following in the shareholders' equity section of its statement of financial position: The stated value of its common shares is o noted is that 15,000 shares are currently designated as being repurchased but not yet cancelled. The number of shares outstanding is:

A. 215,000

B. 200,000

C. 196,250

D. 185,000

10. Authorized sharnt the:

A. Number of shares that have been sold.

B. Number of shares that are currently held by shareholders.

C. Number of shares that have been repurchased by the corporation.

D. Maximum number of shares that can be issued.