Question 1.

Following is the shareholders' equity section of the balance sheet of the Everslim Corporation: The number of common shares authorized and issued after the distribution of a 15% common stock dividend is:

Select one:

a. 115,000 and 74,750

b. 100,000 and 65,000

c. 115,000 and 65,000

d. 100,000 and 74,750

Question 2.

Proceeds from the issuance of shares appear in which, if any, section of the cash flow statement?

Select one:

a. operating activities section

b. investing activities section

c. Proceeds from the issuance of shares do not appear in the cash flow statement

d. financing activities section

Question 3.

How does a company account for the difference between interest expense and the cash payment of interest when bonds are issued at less than their face value?

Select one:

a. The difference is accounted for using Amortization of Bond Discount.

b. The difference is accounted for using Amortization of Bond Premium.

c. The difference is accounted for using Bonds Payable

d. In this situation the cash payment of interest will exceed interest expense.

Question 4.

On an indirect method statement of cash flows, an increase in accounts payable would be:

Select one:

a. added to net income

b. netted against any decreases in accounts receivable

c. reflected in the investing activities section

d. deducted from net income

Question 5.

January 1, 2017, Assembly System Corporation's Retained Earnings account had a balance of $675,000. During 2017, cash dividends of $25,000 and stock dividends with a market value of $55,000 were declared and distributed. Assembly System Corporation had a net loss of $5,000 in 2017. What is the balance in Retained Earnings that would appear on Assembly System Corporation's statement of shareholders' equity on December 31, 2017?

Select one:

a. $595,000

b. $590,000

c. $615,000

d. $670,000

Question 6.

Under the effective-interest method of amortization for bonds, the cash payment on each interest payment date

Select one:

a. increases over the life of the bond

b. increases over the first half of the life of the bond, and then decreases thereafter

c. is constant

d. decreases over the life of the bond

Question 7.

The purchase of land for cash and the sale of a capital asset for cash are viewed as:

Select one:

a. a negative and positive item on the statement of cash flows

b. both positive items on the statement of cash flows

c. neither positive nor negative items on the statement of cash flows

d. a positive and negative item on the statement of cash flows

Question 8.

A stock dividend will

Select one:

a. have no effect on total assets

b. increase total owners' equity

c. have no effect on total assets or total owners' equity

d. reduce total assets

Question 9.

The issuance of common shares in exchange for land and equipment will:

Select one:

a. affect the financing activities section of a cash flow statement

b. affect the operating activities section of a cash flow statement

c. affect the investing activities section of a cash flow statement

d. not affect a cash flow statement

Question 10.

Activities which lead to an increase or decrease in long-term debt of a corporation are referred to as:

Select one:

a. operating activities

b. future debt

c. financing activities

d. investing activities