Accountancy Final Exam Questions Essay

997 Words Aug 26th, 2012 4 Pages
1) Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $300,000 and credit sales are $1,200,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense?
Debit Bad Debt Expense $12,000, Credit – Allowance for Doubtful Accounts $12,000

2) Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $15,000. If the balance of the Allowance for Doubtful Accounts is $3,000 credit before adjustment, what is the amount of bad debts expense for that period?
Answer: B - $12,000

3) Intangible assets
Answer: B - should be reported as a separate
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C. Long-term debt, $150,000; Long-term debt due within one year, $75,000

13) A corporation issued $600,000, 10%, 5-year bonds on January 1, 2011 for 648,666, which reflects an effective-interest rate of 8%. Interest is paid semiannually on January 1 and July 1. If the corporation uses the effective-interest method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1, 2011, is
D. $25,946

14) When the effective-interest method of bond discount amortization is used
C. interest expense will not be a constant dollar amount over the life of the bond

15) If a corporation has only one class of stock, it is referred to as
D. common stock

16) Capital stock to which the charter has assigned a value per share is called
A. par value stock

17) ABC, Inc. has 1,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2011. What is the annual dividend on the preferred stock?
B. $5,000 in total

18) Manner, Inc. has 5,000 shares of 5%, $100 par value, noncumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2011. There were no dividends declared in 2010. The board of directors declares and pays a $45,000 dividend in 2011. What is the amount of dividends received by the common stockholders in 2011?
D. $20,000

19) When the selling price of treasury stock is greater than its cost,