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Reported earnings become overstated as a result of failure to record
a. the amortization of premium on bonds payable
b. the dividends in arrears on the outstanding
c. an accrued liability
d. a
Step by step
Solved in 2 steps
- Reported earnings become overstated as a result of failure to record which of the following: a. the amortization of premium on bonds payable b. a contingent liability c. the dividends in arrears on the outstanding d. an accrued liabilityWhich of the following statements is false? A The declaration of a dividend may not result in a current liability. B A dividend payable in shares of the issuing company's stock is not reported as a current liability. C Undeclared dividends in arrears on cumulative preferred stock are not recognized as a liability. D Interest and dividends accrue as a liability as time passes.WHICH STATEMENT IS FALSE?A. If the net income of prior period is overstated because of the change in accounting policy, the effect is deducted from the beginning retained earnings.B. Equity is also the net assets.C. Prior period errors are shown as adjustment of the ending balance of retained earnings. If the net income of the prior period is overstated, the amount of the error uis deducted from retained earnings.D. In the conversion of preference chares into ordinary shares, if the total par or stated value of the ordinary shares is more than the original issue of the preference shares, the difference is charged to retained earnings.
- An auditor’s analytical procedures indicate a lower than expected return on an equity methodinvestment. This situation most likely could have been caused bya. An error in recording amortization of the excess of the investor’s cost over the investment’s underlying book value.b. The investee’s decision to reduce cash dividends declared per share of its commonstock.c. An error in recording the unrealized gain from an increase in the fair value of availablefor sale securities in the income account for trading securities.d. A substantial fluctuation in the price of the investee’s common stock on a national stockexchange.An auditor’s analytical procedures indicate a lower than expected return on an equity method investment. This situation most likely could have been caused bya. An error in recording amortization of the excess of the investor’s cost over the investment’s underlying book value.b. The investee’s decision to reduce cash dividends declared per share of its common stock.c. An error in recording the unrealized gain from an increase in the fair value of available for sale securities in the income account for trading securities.d. A substantial fluctuation in the price of the investee’s common stock on a national stock exchange.14. For available-for-sale securities, a decline in value due to a temporary decline in market value below cost is a. disclosed in the financial statements by means of a footnoteb. disclosed as a reduction from stockholders' equity on the balance sheetc. disclosed as a loss on the income statementd. not disclosed because the decline in value is only temporary
- When using the allowance method, as Bad Debt Expenseis recorded,a. Total assets remain the same and stockholders’ equityremains the same.b. Total assets decrease and stockholders’ equity decreases.c. Total assets increase and stockholders’ equity decreases.d. Total liabilities increase and stockholders’ equity decreases.Which of the following is NOT correct regarding trading securities * a. Unrealized holding gains or losses are reported in profit or loss b. Share in profit of the investee increases carrying value of the investment c. These are classified as current assets. d. Cash dividends shall be recognized as dividend incomeChanges in the fair value of held to maturity securities are: A. not recognized. B. recognized on the income statement and as part of stockholders' equity. C. reported as part of stockholders' equity. D. recognized on the income statement.
- ENTERED AS NO ENTRY AND WHERE MARKED WRONG. LIST OF ACCOUNTS Accumulated Other Comprehensive Loss Allowance for Doubtful Accounts Allowance to Reduce Inventory to Market Bad Debt Expense Bonds Payable Cash Call Option Common Stock Cost of Goods Sold Debt Investments Dividend Revenue Dividend Receivable Equity Investments Fair Value Adjustment Futures Contract Gain on Sale of Investments Gain on Settlement of Call Option Gain on Settlement of Put Option Interest Expense Interest Receivable Interest Revenue Inventory Investment Income Loss on Impairment Loss on Sale of Investments Loss on Settlement of Call Option Loss on Settlement of Put Option No Entry Notes Payable Paid-in Capital in Excess of Par - Common Stock Put Option Recovery of Loss from Impairment Retained Earnings Revenue from Investment Sales Revenue Swap Contract Unrealized Holding Gain or Loss - Equity Unrealized Holding Gain or Loss - IncomePLEASE HELP WITH LIST OF ACCOUNTS Accumulated Other Comprehensive Loss Allowance for Doubtful Accounts Allowance to Reduce Inventory to Market Bad Debt Expense Bonds Payable Cash Call Option Common Stock Cost of Goods Sold Debt Investments Dividend Revenue Dividend Receivable Equity Investments Fair Value Adjustment Futures Contract Gain on Sale of Investments Gain on Settlement of Call Option Gain on Settlement of Put Option Interest Expense Interest Receivable Interest Revenue Inventory Investment Income Loss on Impairment Loss on Sale of Investments Loss on Settlement of Call Option Loss on Settlement of Put Option No Entry Notes Payable Paid-in Capital in Excess of Par - Common Stock Put Option Recovery of Loss from Impairment Retained Earnings Revenue from Investment Sales Revenue Swap Contract Unrealized Holding Gain or Loss - Equity Unrealized Holding Gain or Loss - IncomeQUESTION 7 What are the effects on the accounting equation from the recognition of an unrealized loss on trading securities? a. Stockholders' equity decreases, and liabilities increase. b. Assets and stockholders' equity decrease. c. No effects, as unrealized gains and losses should not be recorded d. Assets and liabilities decrease.
