ACCT 305 WEEK 5 QUIZ
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- 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.
- 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
- 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.
- 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.
- 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.
- 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.
- Question :(TCO 5) Which category completely excludes
equity securities?
- Securities available for sale.
- Consolidating securities.
- Held-to-maturity securities.
- Trading securities.
- 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.
- 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.
- 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.
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