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Exam 2: Reporting Investing and Financing Results on the Balance Sheet

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Question 101

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Owners of a company:

A) hold promissory notes as evidence of their ownership claim.
B) are entitled to repayment of their investment.
C) have a claim that is secondary to creditor's claims.
D) have a claim equal to the amount of liabilities a company owes.

E) A) and B)
F) C) and D)

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Question 102

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With a classified balance sheet,current assets are usually listed:

A) in alphabetical order.
B) in the order of when the assets were acquired.
C) from the largest to smallest dollar amount.
D) in the order of liquidity.

E) A) and B)
F) B) and D)

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Question 103

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Which of the following statements about transaction analysis is correct?

Within the debit/credit framework,the best interpretation of the word "credit" is:

The Accounts Payable account:

The list of account names and reference numbers that the company will use when accounting for transactions is called the chart of accounts.

Darin Company purchased land at a cost of $15,000 and planned to use it to construct a new storage facility on the property.A short time later,the company changed its plans and sold the property to Dee Company for $15,000.Dee Company signed a note for $15,000 that is due in 60 days.The journal entry prepared by Darin Company to record the sale of the property would include which of the following?

-Use the information above to answer the following question.Which line items would be classified as noncurrent on a classified balance sheet?

Every transaction involves a(n) :

When a business issues stock,what does it give to its owners?

The general ledger is an internal report that lists all the accounts and their balances and is used to check that total debits equals total credits.

Journal entries show the effects of transactions on the elements of the accounting equation,as well as the account balances.

On March 3,Year 3,your company purchases supplies on account for $4,000.Payment is due on April 2,Year 3. Required: Part a.Is this an accounting transaction on March 3,Year 3? Why or why not? Part b.When this transaction is recorded,what accounts are affected and by how much each?