What option does business have while financing its operation

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Reference no: EM131138673

Question 1
Cash dividends are not paid on shares of treasury stock.
A. True
B. False

Question 2
A fixed asset with a cost of $30,000 and accumulated depreciation of $25,000 is sold for $3,500. What is the amount of gain or loss on disposal of the fixed asset?
A.$2,500 loss
B.$1,500 loss
C.$2,500 gain
D.$1,500 gain

Question 3
If a corporation issues only one class of stock, it is called:
A. common stock.
B. treasury stock.
C. no-par stock.
D. preferred stock.

Question 4
The estimated amount that an asset can be sold for at the end of its useful life is called its book value.
A. True
B. False

Question 5
The market interest rate related to a bond is also called the:
A. stated interest rate.
B. effective interest rate.
C. contract interest rate.
D. straight-line rate.

Question 6
Physical depreciation occurs when changes in customer needs causes a fixed asset to no longer provide services for which it was intended.
A. True
B. False

Question 7
If paid-in capital in excess of par-preferred stock is $80,000, preferred stock is $500,000, paid-in capital in excel of par-common stock is $50,000, common stock is $1,000,000, and retained earnings is $230,000, the total stockholders' equity is $1,860,000.
A. True
B. False

Question 8
For the year that just ended, a company reports net income of $1,500,000. There are 500,000 shares authorized, 300,000 shares issued, and 250,000 shares of common stock outstanding. What is the earnings per share?
A.$5.00
B.$2.50
C.$6.00
D.$3.00

Question 9
A current liability is a debt that is reasonable expected to be paid:
A. between 6 months and 18 months.
B. out of currently recognized revenues.
C. within one year.
D. out of cash currently on hand.

Question 10
Expenditures made to extend an asset's life are called revenue expenditures.
A. True
B. False

Question 11
A drilling company purchased a mining site for $500,000 on July, 1 2012. The company expects to mine ore for the next 10 years and anticipates that a total of 100,000 tons will be recovered. During 2012 the company extracted 6,500 tons of ore. The depletion expense for the year 2012 is:
A.$37,700.
B.$42,000.
C.$32,500.
D.$27,300.

Question 12
Which of the following expenditures would not be included in the cost of a fixed asset?
A. Freight costs
B. Vandalism
C. Sales taxes
D. Surveying fees

Question 13
If the proceeds from a sale of equipment is greater than the book value of the equipment as on the date of sale, a loss is recorded.
A. True
B. False

Question 14
Which of the following expenditures would not be included in the cost of a fixed asset?
A. Freight costs
B. Vandalism
C. Sales taxes
D. Surveying fees

Question 15
What are current liabilities?
A. Liabilities that are due and payable within two years.
B. Liabilities that are due and to be paid out of the current assets within one year.
C. Liabilities that are due but not payable for more than one year.
D. Liabilities that are payable if a possible subsequent event occurs.

Question 16
A drilling company purchased a mining site for $500,000 on July, 1 2012. The company expects to mine ore for the next 10 years and anticipates that a total of 100,000 tons will be recovered. During 2012 the company extracted 6,500 tons of ore. The depletion expense for the year 2012 is:
A.$37,700.
B.$42,000.
C.$32,500.
D.$27,300.

Question 17
What options does a business have while financing its operations?
A. Debt financing
B. Equity financing
C. Asset financing
D. Both debt financing and equity financing

Question 18
Which of the following is not an intangible asset?
A. Goodwill
B. Trademark
C. Copyright
D. Long-term receivable

Question 19
A company sold office furniture costing $16,500 with accumulated depreciation of $14,000 for $1,800 cash. The entry to record the sale would include:
A. a loss for $700.
B. an increase in accumulated depreciation for $14,000.
C. a total decrease in office furniture for $2,500.
D. a decrease in cash for $1,800.

Question 20
Which of the following is a reason to undergo a reverse stock split?
A. To reduce the stock's market price per share.
B. To increase total stockholders' equity.
C. To reduce total stockholders' equity.
D. To increase the market value of the stock per share.

Reference no: EM131138673

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