ACCT 511 CH 4 & 5 QUIZ QUESTIONS AND ANSWERS

ACCT 511 CH 4 & 5 QUIZ QUESTIONS
AND ANSWERS
WhichyhitemyhbelowyhwouldyhNOTyhbeyhclassifiedyhasyhayhcurrentyhliabilityyhonyhtheyhbalanc
eyhsheet?yh
a.yhTradeyhaccountsyhpayable
b.yhTreasuryyhstock
c.yhTheyhcurrentyhmaturingyhportionyhofyhlong-termyhdebt
d.yhUnearnedyhrevenueyh-yhanswer--b.yhTreasuryyhstock

Inyhpreparingyhayhstatementyhofyhcashyhflows,yhtheyhsaleyhofyhtreasuryyhstockyhatyhanyhamou
ntyhgreateryhthanyhcostyhwouldyhbeyhclassifiedyhasyha(n)
a.yhoperatingyhactivity
b.yhnonyhcashyhinvestingyhandyhfinancingyhactivity
c.yhfinancingyhactivity
d.yhinvestingyhactivityyh-yhanswer--c.yhfinancingyhactivity

Oneyhbenefityhofyhtheyhstatementyhofyhcashyhflowsyhisyhthatyhityhhelpsyhusersyhevaluateyhayhc
ompany'syhfinancialyhflexibility.yhWhichyhofyhtheyhfollowingyhexplanationsyhisyhayhdescriptio
nyhofyhfinancialyhflexibility?yh
a.yhTheyhfirm'syhabilityyhtoyhrespondyhandyhadaptyhtoyhfinancialyhadversityyhandyhunexpecte
dyhneedsyhandyhopportunities.yh
b.yhTheyhfirm'syhabilityyhtoyhpayyhitsyhdebtsyhasyhtheyyhmature.yh
c.yhWhenyhtheyhcompanyyhhasyhtheyhabilityyhtoyhfundyhayhnumberyhofyhprojectsyhwithyhdiffere
ntyhobjectivesyhandyhcosts.yh
d.yhWhenyhassetsyhareyhtwoyhtimesyhmoreyhgreateryhthanyhliabilities.yh-yhanswer--
a.yhTheyhfirm'syhabilityyhtoyhrespondyhandyhadaptyhtoyhfinancialyhadversityyhandyhunexpecte
dyhneedsyhandyhopportunities.

Theyhcorrectyhorderyhtoyhpresentyhcurrentyhassetsyhis
a.yhcash,yhinventories,yhprepaidyhitems,yhaccountsyhreceivable.yh
b.yhcash,yhinventories,yhaccountsyhreceivable,yhprepaidyhitems.yh
c.yhcash,yhaccountsyhreceivable,yhprepaidyhitems,yhinventories.yh
d.yhcash,yhaccountsyhreceivable,yhinventories,yhprepaidyhitems.yh-yhanswer--
d.yhcash,yhaccountsyhreceivable,yhinventories,yhprepaidyhitems.

Makingyhandyhcollectingyhloansyhandyhdisposingyhofyhproperty,yhplant,yhandyhequipmentyha
re
a.yhoperatingyhactivities.yh
b.yhinvestingyhactivities.yh
c.yhliquidityyhactivities.yh
d.yhfinancingyhactivities.yh-yhanswer--b.yhinvestingyhactivities.

Classifyyhtheyhfollowingyhaccountsyhaccordingyhtoyhtheyhproperyhbalanceyhsheetyhpresenta
tionyhatyhDecemberyh31,yh2025.yh

, 1.yhBondyhsinkingyhfund
2.yhRestrictedyhCash
3.yhAppropriationyhofyhretainedyhearningsyhforyhplantyhexpansion
4.yhNotesyhpayableyh(dueyh2026)
5.yhBondsyhpayableyh(dueyh2027)
6.yhPaid-inyhcapitalyh-yhcommonyhstock
7.yhSecuritiesyhownedyhbyyhanotheryhcompanyyhwhichyhareyhcollateralyhforyhthatyhcompany'
syhnote.yh
8.yhEquityyhinvestmentsyh(trading)
9.yhInventory
10.yhDiscountyhonyhbondsyhpayable
11.yhPatents
12.yhUnearnedyhrentyhrevenueyh-yhanswer--1.yhBondyhsinkingyhfundyh-yhINVESTMENTS
2.yhRestrictedyhCashyh-yhCURRENTyhASSETS
3.yhAppropriationyhofyhretainedyhearningsyhforyhplantyhexpansionyh-
yhRETAINEDyhEARNINGS

4.yhNotesyhpayableyh(dueyh2026)yh-yhCURRENTyhLIABILITIES
5.yhBondsyhpayableyh(dueyh2027)yh-yhLONG-TERMyhLIABILITIES
6.yhPaid-inyhcapitalyh-yhcommonyhstockyh-yhADDITIONALyhPAIDyhINyhCAPITAL
7.yhSecuritiesyhownedyhbyyhanotheryhcompanyyhwhichyhareyhcollateralyhforyhthatyhcompany'
syhnote.yh-yhITEMSyhEXCLUDEDyhFROMyhBALANCEyhSHEET
8.yhEquityyhinvestmentsyh(trading)yh-yhCURRENTyhASSETS
9.yhInventoryyh-yhCURRENTyhASSETS
10.yhDiscountyhonyhbondsyhpayableyh-yhLONG-TERMyhLIABILITIES
11.yhPatentsyh-yhINTANGIBLES
12.yhUnearnedyhrentyhrevenueyh-yhCURRENTyhLIABILITIES

Whatyhisyhinterest?yh
a.yhReturnyhonyhcapital
b.yhLoan
c.yhPaymentyhforyhtheyhuseyhofyhmoney
d.yhAnyhequityyhinvestmentyh-yhanswer--c.yhPaymentyhforyhtheyhuseyhofyhmoney

WhatyhisyhNOTyhayhvariableyhthatyhisyhconsideredyhinyhinterestyhcomputations?yh
a.yhinterestyhrate
b.yhtime
c.yhassets
d.yhprincipalyh-yhanswer--c.yhassets

Ifyhyouyhinvestyh$50,500yhtoyhearnyh8%yhinterest,yhwhichyhofyhtheyhfollowingyhcompoundingy
happroachesyhwouldyhreturnyhtheyhlowestyhamountyhafteryhoneyhyear?

a.yhdaily
b.yhquarterly
c.yhannually
d.yhmonthlyyh-yhanswer--c.yhannually

OnyhJuneyh1,yh2025,yhCullumberyhCompanyyhsoldyhsomeyhequipmentyhtoyhIndigoyhCompa
ny.yhTheyhtwoyhcompaniesyhenteredyhintoyhanyhinstallmentyhsalesyhcontractyhatyhayhrateyhofyh
8%.yhTheyhcontractyhrequiredyh6yhequalyhannualyhpaymentsyhwithyhtheyhfirstyhpaymentyhdu