ACCT 305 WEEK 5 QUIZ
Question : (TCO 6) Which of the following is not a current liability?
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?
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.
Employee insurance deductions.
Social security taxes deductions.
Question :(TCO 5) Which category completely excludes equity securities?
Securities available for sale.
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 here sale.
Question : (TCO 5) Investments in securities available for sale are reported at:
Discounted present value.
Lower of cost or market.
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 here each year.
All of the above are correct.
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