Saturday, October 10, 2020

Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should First Bank record?

A) Debit Cash, $8,000 Credit Notes Receivable, $8,000.

B) Debit Notes Receivable, $8,000 Credit Cash, $8,000.

C) Debit Cash, $8,000 Credit Notes Payable, $8,000.

D) Debit Notes Payable, $8,000 Credit Cash, $8,000.

Answer: B

Bear Essentials borrowed $50,000 from Stacks Bank and signed a promissory note. What entry should Bear Essentials record?

A) Debit Cash, $50,000 Credit Notes Receivable, $50,000.

B) Debit Notes Receivable, $50,000 Credit Cash, $50,000.

C) Debit Cash, $50,000 Credit Notes Payable, $50,000.

D) Debit Notes Payable, $50,000 Credit Cash, $50,000.

Answer: C

Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should Brian Inc. record?

A) Debit Cash, $8,000 Credit Notes Receivable, $8,000.

B) Debit Notes Receivable, $8,000 Credit Cash, $8,000.

C) Debit Cash, $8,000 Credit Notes Payable, $8,000.

D) Debit Notes Payable, $8,000 Credit Cash, $8,000.

Answer: C

Which of the following is not a characteristic of a liability?

A) It represents a probable, future sacrifice of economic benefits.

B) It must be payable in cash.

C) It arises from present obligations to other entities.

D) It results from past transactions or events.

Answer: B

Which of the following is not a liability?

A) Notes payable.

B) Current portion of long-term debt.

C) An unused line of credit.

D) Deferred revenue.

Answer: C

Liabilities are defined as:

A) Resources owed by an entity as a result of past transactions.

B) Resources owned by an entity as a result of past transactions.

C) Selling products and services to customers in the current period.

D) Costs of running the business in the current period.

Answer: A

In most cases, current liabilities are payable within year(s), and long-term liabilities are payable more than year(s)

In most cases, current liabilities are payable within year(s), and long-term liabilities are payable more than year(s) from the balance sheet date.

A) one two

B) one one

C) two two

D) one ten

Answer: B

Which of the following is not a current liability?

A) Accounts payable.

B) A note payable due in 2 years.

C) Current portion of long-term debt.

D) Sales tax payable.

Answer: B

Given a choice, most companies would prefer to report a liability as long-term rather than current because:

A) It may cause the firm to appear less risky to investors and creditors.

B) It may reduce interest rates on borrowing.

C) It may cause the company to appear more stable, commanding a higher stock price for new stock listings.

D) All of the other answer choices are correct.

Answer: D

Maple Inc. has the following information regarding its assets:

Estimated

Book Value Cash Flows Fair Value

Equipment $ 35,000 $ 30,000 $ 28,000

Building $ 68,000 $ 70,000 $ 65,000

Patent $ 30,000 $ 34,000 $ 32,000

What amount of loss should be recorded due to asset impairment?

A) $10,000.

B) $9,000.

C) $8,000.

D) $7,000.

Answer: D

Based on the information below, what amount of impairment loss would be reported?

Estimated

Asset Fair value cash flows Book value

Equipment $ 25,000 $ 36,000 $ 30,000

Truck $ 34,000 $ 45,000 $ 42,000

Building $ 135,000 $ 138,000 $ 140,000

A) $5,000.

B) $23,000.

C) $13,000.

D) $18,000.

Answer: A

Which of the following is not a reason why a company might prefer to report a liability as long-term rather than current?

A) It may cause the firm to appear less risky to investors and creditors.

B) It may increase interest rates on borrowing.

C) It may cause the company to appear more stable commanding a higher stock price for new stock listings.

D) It may reduce interest rates on borrowing.

Answer: B

Leonard's Jewelry owns a patent with a carrying value of $50 million. Due to adverse economic conditions,

Leonard's Jewelry owns a patent with a carrying value of $50 million. Due to adverse economic conditions, Leonard's management determined that it should assess whether an impairment should be recognized for the patent. The estimated future cash flows to be provided by the patent total $43 million, and its fair value at that point totals $35 million. Under these circumstances, Leonard:

A) Would record no impairment loss on the patent.

B) Would record a $7 million impairment loss on the patent.

C) Would record a $15 million impairment loss on the patent.

D) Would record a $31 million impairment loss on the patent.

Answer: C

Wilson Inc. owns equipment for which it originally paid $70 million and has recorded accumulated depreciation on the equipment of $12 million. Due to adverse economic conditions, Wilson's management determined that it should assess whether an impairment should be recognized for the equipment. The estimated future cash flows to be provided by the equipment total $60 million, and its fair value at that point totals $50 million. Under these circumstances, Wilson:

A) Would record no impairment loss on the equipment.

B) Would record an $8 million impairment loss on the equipment.

C) Would record a $20 million impairment loss on the equipment.

D) Would record a $2 million impairment loss on the equipment.

Answer: A

C-Stop reports the following information at year-end:

Estimated

Book Value Cash Flows Fair Value

Building $ 500,000 $ 380,000 $ 360,000

Patent $ 35,000 $ 40,000 $ 38,000

Machine $ 100,000 $ 120,000 $ 85,000

Based on the above information, what is the total amount of impairment loss that C-Stop should record at year-end?

A) $141,000.

B) $126,000.

C) $123,000.

D) $122,000.

Answer: A

In testing for impairment of an operational asset, an impairment loss has occurred if the:

A) Asset's book value exceeds the present value of its expected future cash flows.

B) Expected future cash flows exceeds the asset's book value.

C) Present value of expected future cash flows exceeds its carrying value.

D) Asset's book value exceeds the expected future cash flows.

Answer: D

The amount of impairment loss is the excess of book value over:

A) Carrying value.

B) Future cash flows.

C) Fair value.

D) Future revenues.

Answer: C

Accounting for impairment losses:

A) Involves a two-step process to first test for impairment and then record the loss.

B) Applies only to depreciable, operational assets.

C) Applies only to assets with finite lives.

D) All of these.

Answer: A

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year,

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. The return on assets for the year is 10%.
What is Hidden Valley's net income for the year?

A) $5,000,000.

B) $55,000.

C) $5,500,000.

D) $50,000.

Answer: D

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively.
What is Hidden Valley's asset turnover?

A) 1.6 times.

B) 1.8 times.

C) 1.5 times.

D) 0.2 times.

Answer: A

Recognition of impairment for long-term assets is required if book value exceeds:

A) Original cost.

B) Fair value.

C) Future cash flows.

D) Accumulated depreciation.

Answer: C

Accounting Free Hw QAs

Saturday, October 10, 2020

Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should First Bank record?

Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should First Bank record?

Bear Essentials borrowed $50,000 from Stacks Bank and signed a promissory note. What entry should Bear Essentials record?

Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should Brian Inc. record?

Which of the following is not a characteristic of a liability?

Which of the following is not a characteristic of a liability?

Which of the following is not a liability?

Liabilities are defined as:

In most cases, current liabilities are payable within year(s), and long-term liabilities are payable more than year(s)

In most cases, current liabilities are payable within year(s), and long-term liabilities are payable more than year(s) from the balance sheet date.

Which of the following is not a current liability?

Given a choice, most companies would prefer to report a liability as long-term rather than current because:

Maple Inc. has the following information regarding its assets:

What amount of loss should be recorded due to asset impairment?

Based on the information below, what amount of impairment loss would be reported?

Which of the following is not a reason why a company might prefer to report a liability as long-term rather than current?

Leonard's Jewelry owns a patent with a carrying value of $50 million. Due to adverse economic conditions,

Based on the above information, what is the total amount of impairment loss that C-Stop should record at year-end?

In testing for impairment of an operational asset, an impairment loss has occurred if the:

In testing for impairment of an operational asset, an impairment loss has occurred if the:

The amount of impairment loss is the excess of book value over:

Accounting for impairment losses:

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year,

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. The return on assets for the year is 10%.
What is Hidden Valley's net income for the year?

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively.
What is Hidden Valley's asset turnover?

Recognition of impairment for long-term assets is required if book value exceeds:

Assuming a current ratio of 1.2 and an acid-test ratio of 0.80, how will the purchase of inventory with cash affect each ratio?

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Saturday, October 10, 2020

Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should First Bank record?

Bear Essentials borrowed $50,000 from Stacks Bank and signed a promissory note. What entry should Bear Essentials record?

Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should Brian Inc. record?

Which of the following is not a characteristic of a liability?

Which of the following is not a liability?

Liabilities are defined as:

In most cases, current liabilities are payable within ________ year(s), and long-term liabilities are payable more than ________ year(s) from the balance sheet date.

Which of the following is not a current liability?

Given a choice, most companies would prefer to report a liability as long-term rather than current because:

What amount of loss should be recorded due to asset impairment?

Based on the information below, what amount of impairment loss would be reported?

Which of the following is not a reason why a company might prefer to report a liability as long-term rather than current?

Based on the above information, what is the total amount of impairment loss that C-Stop should record at year-end?

In testing for impairment of an operational asset, an impairment loss has occurred if the:

The amount of impairment loss is the excess of book value over:

Accounting for impairment losses:

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. The return on assets for the year is 10%.What is Hidden Valley's net income for the year?

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively.What is Hidden Valley's asset turnover?

Recognition of impairment for long-term assets is required if book value exceeds:

In most cases, current liabilities are payable within year(s), and long-term liabilities are payable more than year(s) from the balance sheet date.

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. The return on assets for the year is 10%.
What is Hidden Valley's net income for the year?

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively.
What is Hidden Valley's asset turnover?