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  • ACC 423 Final Exam

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    ACC 423 Final Exam. Get an A++. ACC 423 Final Exam. Get an A++. 1) When the cash proceeds from a bond issued with detachable stock warrants exceed the sum of the par value of the bonds and the fair market value of the warrants, the excess should be credited to A. a liability account. B. retained earnings. C. premium on bonds payable. D. additional paid-in capital from stock warrants. 2) The conversion of preferred stock into common stock requires that any excess of the par value of the common shares issued over the carrying amount of the preferred being converted should be A. treated as a prior period adjustment. B. reflected currently in income as an extraordinary item. C. treated as a direct reduction of retained earnings. D. reflected currently in income, but NOT as an extraordinary item. 3) When convertible debt is retired by the issuer, any material difference between the cash acquisition price and the carrying amount of the debt should be A. treated as a prior period adjustment. B. reflected currently in income as an extraordinary item. C. treated as an adjustment of additional paid-in capital. D. reflected currently in income, but NOT as an extraordinary item. 4) When a corporation issues its capital stock in payment for services, the least appropriate basis for recording the transaction is the A. market value of the shares issued. B. par value of the shares issued. C. Any of these provides an appropriate basis for recording the transaction. D. market value of the services received. 5) The accounting problem in a lump sum issuance is the allocation of proceeds between the classes of securities. An acceptable method of allocation is the A. incremental method. B. proportional method C. either the proportional method or the incremental method. D. pro forma method. 6) Which of the following represents the total number of shares that a corporation may issue under the terms of its charter? A. unissued shares B. issued shares C. outstanding shares D. authorized shares 7) How should a “gain” from the sale of treasury stock be reflected when using the cost method of recording treasury stock transactions? A. As an increase in the amount shown for common stock. B. As paid-in capital from treasury stock transactions. C. As an extraordinary item shown on the income statement. D. As ordinary earnings shown on the income statement. 8) Treasury shares are A. issued and outstanding shares. B. shares held as an investment by the treasurer of the corporation. C. issued but NOT outstanding shares. D. shares held as an investment of the corporation. 9) When treasury stock is purchased for more than the par value of the stock and the cost method is used to account for treasury stock, what account(s) should be debited? A. Treasury stock for the purchase price. B. Treasury stock for the par value and paid-in capital in excess of par for the excess of the purchase price over the par value. C. Treasury stock for the par value and retained earnings for the excess of the purchase price over the par value. D. Paid-in capital in excess of par for the purchase price. 10) When computing diluted earnings per share, convertible bonds are A. assumed converted only if they are antidilutive. B. ignored. C. assumed converted only if they are dilutive. D. assumed converted whether they are dilutive or antidilutive. 11) In computing earnings per share, the equivalent number of shares of convertible preferred stock are added as an adjustment to the denominator (number of shares outstanding). If the preferred stock is cumulative, which amount should then be added as an adjustment to the numerator (net earnings)? A. Annual preferred dividend times the income tax rate B. Annual preferred dividend C. Annual preferred dividend divided by the income tax rate D. Annual preferred dividend time

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    ACC 423 Final Exam. Get an A++. ACC 423 Final Exam. Get an A++. 1) When the cash proceeds from a bond issued with detachable stock warrants exceed the sum of the par value of the bonds and the fair market value of the warrants, the excess should be credited to A. a liability account. B. retained earnings. C. premium on bonds payable. D. additional paid-in capital from stock warrants. 2) The conversion of preferred stock into common stock requires that any excess of the par value of the common shares issued over the carrying amount of the preferred being converted should be A. treated as a prior period adjustment. B. reflected currently in income as an extraordinary item. C. treated as a direct reduction of retained earnings. D. reflected currently in income, but NOT as an extraordinary item. 3) When convertible debt is retired by the issuer, any material difference between the cash acquisition price and the carrying amount of the debt should be A. treated as a prior period adjustment. B. reflected currently in income as an extraordinary item. C. treated as an adjustment of additional paid-in capital. D. reflected currently in income, but NOT as an extraordinary item. 4) When a corporation issues its capital stock in payment for services, the least appropriate basis for recording the transaction is the A. market value of the shares issued. B. par value of the shares issued. C. Any of these provides an appropriate basis for recording the transaction. D. market value of the services received. 5) The accounting problem in a lump sum issuance is the allocation of proceeds between the classes of securities. An acceptable method of allocation is the A. incremental method. B. proportional method C. either the proportional method or the incremental method. D. pro forma method. 6) Which of the following represents the total number of shares that a corporation may issue under the terms of its charter? A. unissued shares B. issued shares C. outstanding shares D. authorized shares 7) How should a “gain” from the sale of treasury stock be reflected when using the cost method of recording treasury stock transactions? A. As an increase in the amount shown for common stock. B. As paid-in capital from treasury stock transactions. C. As an extraordinary item shown on the income statement. D. As ordinary earnings shown on the income statement. 8) Treasury shares are A. issued and outstanding shares. B. shares held as an investment by the treasurer of the corporation. C. issued but NOT outstanding shares. D. shares held as an investment of the corporation. 9) When treasury stock is purchased for more than the par value of the stock and the cost method is used to account for treasury stock, what account(s) should be debited? A. Treasury stock for the purchase price. B. Treasury stock for the par value and paid-in capital in excess of par for the excess of the purchase price over the par value. C. Treasury stock for the par value and retained earnings for the excess of the purchase price over the par value. D. Paid-in capital in excess of par for the purchase price. 10) When computing diluted earnings per share, convertible bonds are A. assumed converted only if they are antidilutive. B. ignored. C. assumed converted only if they are dilutive. D. assumed converted whether they are dilutive or antidilutive. 11) In computing earnings per share, the equivalent number of shares of convertible preferred stock are added as an adjustment to the denominator (number of shares outstanding). If the preferred stock is cumulative, which amount should then be added as an adjustment to the numerator (net earnings)? A. Annual preferred dividend times the income tax rate B. Annual preferred dividend C. Annual preferred dividend divided by the income tax rate D. Annual preferred dividend time

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    16 views8 pages

    ACC 423 Final Exam

    Uploaded by

    teacher.theacestud
    ACC 423 Final Exam. Get an A++. ACC 423 Final Exam. Get an A++. 1) When the cash proceeds from a bond issued with detachable stock warrants exceed the sum of the par value of the bonds and the fair market value of the warrants, the excess should be credited to A. a liability account. B. retained earnings. C. premium on bonds payable. D. additional paid-in capital from stock warrants. 2) The conversion of preferred stock into common stock requires that any excess of the par value of the common shares issued over the carrying amount of the preferred being converted should be A. treated as a prior period adjustment. B. reflected currently in income as an extraordinary item. C. treated as a direct reduction of retained earnings. D. reflected currently in income, but NOT as an extraordinary item. 3) When convertible debt is retired by the issuer, any material difference between the cash acquisition price and the carrying amount of the debt should be A. treated as a prior period adjustment. B. reflected currently in income as an extraordinary item. C. treated as an adjustment of additional paid-in capital. D. reflected currently in income, but NOT as an extraordinary item. 4) When a corporation issues its capital stock in payment for services, the least appropriate basis for recording the transaction is the A. market value of the shares issued. B. par value of the shares issued. C. Any of these provides an appropriate basis for recording the transaction. D. market value of the services received. 5) The accounting problem in a lump sum issuance is the allocation of proceeds between the classes of securities. An acceptable method of allocation is the A. incremental method. B. proportional method C. either the proportional method or the incremental method. D. pro forma method. 6) Which of the following represents the total number of shares that a corporation may issue under the terms of its charter? A. unissued shares B. issued shares C. outstanding shares D. authorized shares 7) How should a “gain” from the sale of treasury stock be reflected when using the cost method of recording treasury stock transactions? A. As an increase in the amount shown for common stock. B. As paid-in capital from treasury stock transactions. C. As an extraordinary item shown on the income statement. D. As ordinary earnings shown on the income statement. 8) Treasury shares are A. issued and outstanding shares. B. shares held as an investment by the treasurer of the corporation. C. issued but NOT outstanding shares. D. shares held as an investment of the corporation. 9) When treasury stock is purchased for more than the par value of the stock and the cost method is used to account for treasury stock, what account(s) should be debited? A. Treasury stock for the purchase price. B. Treasury stock for the par value and paid-in capital in excess of par for the excess of the purchase price over the par value. C. Treasury stock for the par value and retained earnings for the excess of the purchase price over the par value. D. Paid-in capital in excess of par for the purchase price. 10) When computing diluted earnings per share, convertible bonds are A. assumed converted only if they are antidilutive. B. ignored. C. assumed converted only if they are dilutive. D. assumed converted whether they are dilutive or antidilutive. 11) In computing earnings per share, the equivalent number of shares of convertible preferred stock are added as an adjustment to the denominator (number of shares outstanding). If the preferred stock is cumulative, which amount should then be added as an adjustment to the numerator (net earnings)? A. Annual preferred dividend times the income tax rate B. Annual preferred dividend C. Annual preferred dividend divided by the income tax rate D. Annual preferred dividend time

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