1) Which of the following is a limitation of the direct write-off method of accounting for uncollectibles? a) The direct write off method overstates assets of the balance sheet. b) the direct write off method does not match expenses against revenue very rell c) the direct write-off method does not set up an allowance for uncollectibles d) All of the above 2) The entry to record a write-off of an uncollectible account when using the direct write-off method involves a a) debit to allowance for bad debts b) credit to cash c) debit to accounts receivable d) debit to bad debts expense 3) Which method almost always produces the most depreciation in the first year? a) Units of production b) straight line c) Double declining balance d) All produce the same depreciation in the first year 4) On Jan 1, 2020 a business borrowed $18,000 on a five-year, 5% note payable. At December 31, 2024, the business should record? a) Interest payable of $900 b) Note receivable of $18,000 c) Cash payment of $18,000 d) Nothing 5) What are long-term liabilities? a) Liabilities that need to be paid within one year b) Liabilities that do no need to be paid within one year c) Accounts receivable 6) What does an amortization schedule do? a) Detail each loan payment allocation between principal and interest and the beginning and ending balance of the loan. b) Liabilities that need to be paid within the year. c) Show the face value of a bond 7) Bonds payable are what? a) Long-term debts issues to multiple lenders called bondholders b) short-term debts issued to multiple lenders called bondholders. c) A liability that needs to be payed within a year d) Long-term debts that are backed with a security interest in specific property 8) Which characteristic of a corporation is a disadvantage a) mutual agency b) limited taxation c) limited liability d) no disadvantages 9) The two basic sources of stockholders' equity are a) assets and equity b) preferred and common c) retained earnings and dividends d) paid in capital and retained earnings 10) A company's own stock that it has repurchased is called a) outstanding stock b) dividend stock c) issued stock d) treasury stock 11) The purpose of the statement of cash flows are to a) evaluate management decisions b) determine ability to pay debts and dividends c) predict future cash flows d) all of the above 12) The main categories of cash flow activities on the statement of cash flows are a) direct and indirect b) current and long term c) non-cash investing and financing d) operating, investing and financing 13) Operating activities are most closely related to a) long-term assets b) current assets and current liabilities c) long-term liabilities and stockholders' equity d) dividends and treasury stock

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