F1 MCQs

Question 1

When asked to quote the exchange rate using the direct method, think about it from the perspective of who is being asked the question?

example: asking a british retailer to quote the exchange rate to USD, you would say:

Answer 1

_____ amount of british pounds are equal to $1 USD.

you want the value of what you are exchanging to equal 1 USD, from their currency to the USD.

Question 2

Stock dividends do NOT produce _____ for the recipient.

Answer 2

income

Question 3

Journal Entry using the par method to record the repurchasing of stock at greater price than it was issued for:

Answer 3

Debit Treasury Stock (par value * number of stocks)
Debit APIC CS (original gain per sale * number of stocks)
Debit RE ((remaining loss after cs) * number of shares)
Credit Cash (repurchase price per share * number of shares)