Final exam

Question 1

operating activities

Answer 1

cash +revenues and expenses
CA
CL

Question 2

Investing activities

Answer 2

cash+ asset (productive and noncurrent)

short term notes recievable

Question 3

Financing activities

Answer 3

cash + noncurrent liability/equity

short term notes payable (equity)

Question 4

stated>market

stated < market

Answer 4

premium

discount

Question 5

If you sold a premium, is the insurance expense increasing or decreasing?

Answer 5

decreasing

Question 6

if you sold a discount , is the insurance expense increasing or decreasing?

Answer 6

increasing

Question 7

What does interest expense do when there’s a premium or discount?

Answer 7

p: decreases
d: increases

Question 8

What does carrying value do when there’s a premium or discount?

Answer 8

p: decreases
d: increases

Question 9

If retirement price> carrying value… what is it and what does it do to interest rate

Answer 9

loss- int rate to increase

Question 10

If retirement price< carrying value… what is it and what does it do to interest rate

Answer 10

gain- int rate to decrease

Question 11

What is the amount stockholders have invested in the company?

Answer 11

paid in capitol

Question 12

What kind of relationship do par value and market value have?

Answer 12

NO direct correlation

Question 13

Treasury stock is a

Answer 13

contra equity account so it decreases equity

Question 14

When company buys back its on stock its

Answer 14

treasury stock

Question 15

List the order of shares from small to large

Answer 15

oustanding, issued, authorized

Question 16

What shares are the number of shares that a corporation is legally allowed to issue

Answer 16

authorized

Question 17

what shares have already been issued

Answer 17

outstanding

Question 18

the number of outstanding shares is always equal to what?

Answer 18

shares issued-# shares repurchased

Question 19

We record treasury stock when?

Answer 19

at the cost acquired

Question 20

When you issued dividends does the total equity change?

Answer 20

when theres a cash dividend yes it decreases equity

when div, cs, add’l pic, no

Question 21

when there’s a stock split…

Answer 21

no journal entrey, but adjust par value

Question 22

What is no affected by stock splits?

Answer 22

r/e

Question 23

if there’s no ____, there’s no journal entry

Answer 23

par value

Question 24

If small stock dividend, use ____ (<20%)

Answer 24

market price

Question 25

if large stock div, use _____ (>20%)

Answer 25

par value

Question 26

Inventory is

Answer 26

current asset

Question 27

Accounts recievable is

Answer 27

current asset

Question 28

prepaid insurance/expense/rent

Answer 28

current asset

Question 29

accrued expenses

Answer 29

current liability

Question 30

Make a list of current liabilities

Answer 30

accounts payable
sales tax paybale
income taxes payable
interest payable
customer deposits

Question 31

Make a list of current assets

Answer 31

Cash, including foreign currency
Prepaid expenses
Accounts receivable
Inventory

Question 32

when are dividends paid?

Answer 32

on share outstanding

Question 33

Divine Apparel has 4,000 shares of common stock outstanding. On October 1, the company declares a $0.75 per share dividend to stockholders of record on October 15. The dividend is paid on October 31. Record all transactions on the appropriate dates for cash dividends

Answer 33

dividends (d) 500
div payable (c) 500

2000x .25

Question 34

What happens to preferred shares?

Answer 34

they are paid first and at the preferred rate. Preferred dividends may be cumulative, which means dividends in arrears have to be paid first before current year dividends.