You are given a choice of taking the simple interest on 100,000 invested for 2 years

1. In which section of the balance sheet would Treasury Stock be reported? a)fixed assets b)long-term
liabilities c)stockholders
equity d)intangible assets

2. In which section of
the financial statements would Paid-in Capital from Sale of Treasury Stock be
reported? a)other expense on income statement b)intangible asset on balance
sheet c)stockholders
equity on balance sheet d)other income on income statement

3. All of the following
are normally found in a corporation's stockholders' equity section except
a)common stock b)paid-in capital in excess of par c)dividends in arrears d)retained earnings

4. The entry to record
the issuance of stock certificates for a common stock dividend that had been
declared would include a debit to a)common stock b)paid-in capital in excess of par-common stock
c)stock dividends distributable d)cash

 5. Which of the following statements is not
true about a 2-for-1 split? a) Par value per share is reduced to half of what
it was before the split.
b) Total contributed capital increases. c) The market price will
probably decrease. d) A stockholder with ten shares before the split owns
twenty shares after the split.

6. When a stock dividend
is declared, which of the following accounts is credited? a)common stock b)dividend payable
c)stock dividends distributable d)retained earnings

7. A bond indenture is
a) a contract between the corporation issuing the bonds and the underwriters
selling the bonds b) the amount due at the maturity date of the bonds c) a contract between the corporation
issuing the bonds and the bond trustee, who is acting on behalf of the
bondholders. d) the amount for which the corporation can buy back the
bonds prior to the maturity date

 8. When the corporation issuing the bonds has
the right to repurchase the bonds prior to the maturity date for a specific
price, the bonds are a)convertible bonds b)unsecured bonds c)debenture bonds d)callable bonds

 9. When the maturities of a bond issue are
spread over several dates, the bonds are called a)serial bonds b)bearer bonds
c)debenture bonds d)term
bonds

10. If the market rate
of interest is 8%, the price of 6% bonds paying interest semiannually with a
face value of $100,000 will be a) Equal to $100,000 b) Greater than $100,000 c)
Less than $100,000 d)
Greater than or less than $100,000, depending on the maturity date of the bonds

11. The interest rate
specified in the bond indenture is called the a)discount rate b)contract rate c)market
rate d)effective rate

12. The journal entry a
company records for the issuance of bonds when the contract rate and the market
rate are the same is a) debit Bonds Payable, credit Cash b) debit Cash and
Discount on Bonds Payable, credit Bonds Payable c) debit Cash, credit Premium
on Bonds Payable and Bonds Payable d) debit Cash, credit Bonds Payable

13. If the market rate
of interest is greater than the contractual rate of interest, bonds will sell
a) at a premium b)at face value c)at a discount d) only after the stated rate
of interest is increased.

14. Cash paid to
purchase long-term investments would be reported in the statement of cash flows
in a) the cash flows from operating activities section b) the cash flows from
financing activities section c)
the cash flows from investing activities section d) a separate schedule

15. Which of the
following is a noncash investing and financing activity? a) payment of a cash
dividend b) payment of a six-month note payable c) purchase of merchandise
inventory on account d)
issuance of common stock to acquire land

16. Which of the following
below increases cash? a) depreciation expense b) acquisition of treasury stock c) borrowing money by issuing a
six-month note d) the declaration of a cash dividend

 17. Which one of the following below would not
be classified as an operating activity? a) interest expense b)income taxes c)payment of dividends
d)selling expenses

18. Cash paid for
equipment would be reported in the statement of cash flows in a) the cash flows
from operating activities section b) the cash flows from financing activities
section c) the cash flows
from investing activities section d) a separate schedule

19. On the statement of
cash flows, the cash flows from financing activities section would include a)
receipts from the sale of investments b) payments for the acquisition of
investments c) receipts from a note receivable d) receipts from the issuance of capital stock

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