Accy 201 Ole Miss Final Exam || QUESTIONS WITH
COMPLETE SOLUTIONS!!
What is earnings per share? correct answers the amount of income earned per share of a
company's outstanding common stock
How do you calculate earnings per share? correct answers net income - preferred dividends /
the weighted-average common shares outstanding
What is premium on stock? correct answers when a corporation sells its stock for more than
par (or stated) value
What journal entry would you use to record issuing par value stock at premium? correct
answers debit cash
credit common stock and capital excess of par value
What are the components of stockholders' equity? correct answers paid-in (or contributed)
capital and retained earnings
What is paid-in capital? correct answers total amount of cash and assets the corporation
receives from its stockholders in exchange for its stock
How do you calculate semiannual interest paid to bondholders? correct answers if a company
issues a $1,000, 8% bond paying interest semiannually it pays annual interest of $80 (8% x
$1,000) in 2 semiannual payments, they payments would equal $40 (80/2)
What journal entry would you use to record issues of bonds at discount or premium? correct
answers at discount: debit cash and discount on bonds payable
at premium: debit cash and credit premium on bonds payable and bonds payable
How are bonds payable reported on the balance sheet? correct answers
What journal entry would you use to record borrowing on short-term notes payable? How
would you record when it is paid? correct answers debit cash and credit notes payable
when paid: debit notes payable & interest expense and credit cash
What are known liabilities accounted for? correct answers accounts payable, notes payable,
payroll sales taxes, unearned revenue, and leases
When plant assets are sold, or disposed of, how is gain or loss calculated? correct answers
when it is no longer useful to the company and it has no market value; it is calculated by
comparing the equipment book value with the zero net cash proceeds
What is the difference between revenue expenditures and capital expenditures? correct
answers revenue expenditures are additonal costs of plant assets that DO NOT materially
increase the assets life or productive capabilities
capital expenditures are additional costs of plant assets that provide benefits extending
beyond the current period
, What are some examples of revenue expenditures? correct answers cleaning, repainting,
adjustments, lubricants
What are some examples of capital expenditures? correct answers roofing replacement, plant
expansion, major overhauls of machinery and equipment
What is depreciation? correct answers the process of allocating the cost of a plant asset to
expense in the accounting periods benefitting from its use
What are the factors for computing depreciation? correct answers 1) cost
2) salvage value
3) useful life
What is the straight-line method? correct answers charges the same amount of expense to
each period of the assets useful life
What is the double declining balance method? correct answers the book value at the
beginning of each period is multiplied by the fixed depreciation rate
What is the units of production method? correct answers charges a varying amount to
expense for each period of an assets useful life depending on its usage
What are plant assets? correct answers tangible assets used in a company's operations that
have a useful life of more than one accounting period
What are the options for disposal of receivables? correct answers a company can sell all or a
potion of receivables with a factoring fee OR a company can raise cash by borrowing money
and pledging its receivables as security for the loan
How would you calculate interest on a note receivable? correct answers principal of the note
x annual interest rate x time expressed in fraction of the year; Example: $1,000 x 90/360 =
$1,000 x 0.12 x 0.25 = $30
How do you calculate bed debts expense using the allowance method? correct answers
What is the allowance method? correct answers the estimated loss from uncollectible
accounts receivable against the sales they helped produce
What is the direct write-off method? correct answers records the loss from an uncollectible
account receivable when it is determined to be uncollectible
What are the common factors that must be reconciled on a bank reconciliation? correct
answers 1) outstanding checks
2) deposits in transit
3) deductions for uncollectible items and services
4) errors
What do we do with the common factors on a bank reconciliation? correct answers we use
them to balance (debit or credit) the book balance and the bank statement
COMPLETE SOLUTIONS!!
What is earnings per share? correct answers the amount of income earned per share of a
company's outstanding common stock
How do you calculate earnings per share? correct answers net income - preferred dividends /
the weighted-average common shares outstanding
What is premium on stock? correct answers when a corporation sells its stock for more than
par (or stated) value
What journal entry would you use to record issuing par value stock at premium? correct
answers debit cash
credit common stock and capital excess of par value
What are the components of stockholders' equity? correct answers paid-in (or contributed)
capital and retained earnings
What is paid-in capital? correct answers total amount of cash and assets the corporation
receives from its stockholders in exchange for its stock
How do you calculate semiannual interest paid to bondholders? correct answers if a company
issues a $1,000, 8% bond paying interest semiannually it pays annual interest of $80 (8% x
$1,000) in 2 semiannual payments, they payments would equal $40 (80/2)
What journal entry would you use to record issues of bonds at discount or premium? correct
answers at discount: debit cash and discount on bonds payable
at premium: debit cash and credit premium on bonds payable and bonds payable
How are bonds payable reported on the balance sheet? correct answers
What journal entry would you use to record borrowing on short-term notes payable? How
would you record when it is paid? correct answers debit cash and credit notes payable
when paid: debit notes payable & interest expense and credit cash
What are known liabilities accounted for? correct answers accounts payable, notes payable,
payroll sales taxes, unearned revenue, and leases
When plant assets are sold, or disposed of, how is gain or loss calculated? correct answers
when it is no longer useful to the company and it has no market value; it is calculated by
comparing the equipment book value with the zero net cash proceeds
What is the difference between revenue expenditures and capital expenditures? correct
answers revenue expenditures are additonal costs of plant assets that DO NOT materially
increase the assets life or productive capabilities
capital expenditures are additional costs of plant assets that provide benefits extending
beyond the current period
, What are some examples of revenue expenditures? correct answers cleaning, repainting,
adjustments, lubricants
What are some examples of capital expenditures? correct answers roofing replacement, plant
expansion, major overhauls of machinery and equipment
What is depreciation? correct answers the process of allocating the cost of a plant asset to
expense in the accounting periods benefitting from its use
What are the factors for computing depreciation? correct answers 1) cost
2) salvage value
3) useful life
What is the straight-line method? correct answers charges the same amount of expense to
each period of the assets useful life
What is the double declining balance method? correct answers the book value at the
beginning of each period is multiplied by the fixed depreciation rate
What is the units of production method? correct answers charges a varying amount to
expense for each period of an assets useful life depending on its usage
What are plant assets? correct answers tangible assets used in a company's operations that
have a useful life of more than one accounting period
What are the options for disposal of receivables? correct answers a company can sell all or a
potion of receivables with a factoring fee OR a company can raise cash by borrowing money
and pledging its receivables as security for the loan
How would you calculate interest on a note receivable? correct answers principal of the note
x annual interest rate x time expressed in fraction of the year; Example: $1,000 x 90/360 =
$1,000 x 0.12 x 0.25 = $30
How do you calculate bed debts expense using the allowance method? correct answers
What is the allowance method? correct answers the estimated loss from uncollectible
accounts receivable against the sales they helped produce
What is the direct write-off method? correct answers records the loss from an uncollectible
account receivable when it is determined to be uncollectible
What are the common factors that must be reconciled on a bank reconciliation? correct
answers 1) outstanding checks
2) deposits in transit
3) deductions for uncollectible items and services
4) errors
What do we do with the common factors on a bank reconciliation? correct answers we use
them to balance (debit or credit) the book balance and the bank statement
