QUESTION 19 Which of the following will be classified as a long term liability? a. Interest payable b. Bonds payable c. Salaries payable d. Accounts payable QUESTION 20 A restaurant sells gift certificates. Which of the following is true regarding the accounting effect at the time that the gift certificate is sold for cash? a. Net income decreases b. Revenues increase this is a valid sale. c. Uneared revenues increase; restaurant owes the service d. There is no balance sheet effect QUESTION 21 If the price of lemons double, and a lemonade company does not change its sales price for a cup of lemonade, what will the effect be on the lemonade company's income statement as compared to previous months, assuming no other changes? a. Gross profit and net income will both decrease b. There will be no effect. c. Gross profit and net income will both increase d. Gross profit will decrease and net income will increase QUESTION 22 Creative Company has the following balance sheet as of year end: Current Assets $20,000 Long Term Assets $40,000 Total Assets $60,000 Current Liabilities Long Term Liabilities Total Liabilities $10,000 $10,000 $20,000 Equity $40,000 Total Liabilities & Equity $60,000 What is Creative Company's current ratio as of year-end? a. 1.5 b. 1.0 C. 3.0 d. 2.0 QUESTION 23 Stockholder's equity: a. Includes capital stock and retained earnings. b. is shown on the income statement. c. is usually equal to cash on hand. d. includes current and long-term liabilities QUESTION 24 Stock that a corporation has issued and then reacquired is called: a. Treasury stock b. Outstanding stock. c. Preferred stock d. Authorized stock QUESTION 25 A stock is selling at $1,000 and undergoes a 2 for 1 stock split. I Investor A held 100 shares of stock prior to the stock split, which of the following is true: a. Investor A now holds 50 shares at a new stock price of $500. b. Investor A now holds 200 shares at a new stock price of $2,000. c Investor A now holds 50 shares at a new stock price of $2,000. d. Investor A now holds 200 shares at a new stock price of $500 QUESTION 26 For the third quarter of 2021, how much did Amazon's net income (bottom line) change in comparison to one year ago? This question is comparing 3rd quarter of this year with 3rd quarter of last year. Hint: Do a search on third quarter Amazon earnings to find the answer for two points of extra credit. Decreased 50% Increased 50% Decreased 5% Increased 5%