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ACCT 305 Week 5 Quiz

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ACCT 305 Week 5 Quiz

  1. Question : (TCO 6) Which of the following is not a current liability?
  • Accounts payable.
  • A note payable due in 2 years.
  • Accrued interest payable.
  • Sales tax payable.
  1. Question : (TCO 5) When the investor owns 60% of the outstanding stock of another company, the investor should:
  • Use the equity method.
  • Classify the investment as Available-for-Sale.
  • Consolidate the investee’s financial statements into their financial statements.
  • Classify the investment as Held-to-Maturity
  1. Question : (TCO 6) Which of the following is the best definition of a current liability?
  • An obligation payable within one year.
  • An obligation payable within one year of the balance sheet date.
  • An obligation payable within one year or within the normal operating cycle, whichever is longer.
  • An obligation expected to be satisfied with current assets or by the creation of other current liabilities.
  1. Question : (TCO 6) A company should accrue a loss contingency only if the likelihood that a liability has been incurred is:
  • More likely than not and the amount of the loss is known.
  • At least reasonably possible and the amount of the loss is known.
  • At least reasonably possible and the amount of the loss can be reasonably estimated.
  • Probable and the amount of the loss can be reasonably estimated.
  1. Question : (TCO 6) Panther Co. had a warranty liability of $350,000 at the beginning of 2011, and $310,000 at end of 2011. Warranty expense is based on 4% of sales, which were $50 million for the year. What were the warranty expenditures for 2011?
  • $0.
  • $1,960,000.
  • $2,000,000.
  • $2,040,000.
  1. Question :  (TCO 6) All of the following but one represent collections for third parties. Which one of the following is not a collection for a third party?
  • Sales tax payable.
  • Customer deposits.
  • Employee insurance deductions.
  • Social security taxes deductions.
  1. Question :(TCO 5) Which category completely excludes equity securities?
  • Securities available for sale.
  • Consolidating securities.
  • Held-to-maturity securities.
  • Trading securities.
  1. Question : (TCO 5) Securities that are purchased with the intent of selling them in the near future to take advantage of short-term price changes are classified as:
  • Securities available for sale.
  • Consolidating securities.
  • Held-to-maturity securities.
  • Trading securities.
  1. Question : (TCO 5) Investments in securities available for sale are reported at:
  • Discounted present value.
  • Lower of cost or market.
  • Historical cost.
  • Fair value on the reporting date.
  1. Question : (TCO 5) If Pop Company exercises significant influence over Son Company and owns 40% of its common stock, then Pop Company:
  • Would record dividends received from Son Company as investment revenue.
  • Would increase its investment account when Son Company declares dividends.
  • Would record 40% of the net income of Son Company as investment income each year.
  • All of the above are correct.