Question 1

The Pioneer Company has provided the following account balances: Cash $38,000;
Short-term investments $4,000;
Accounts receivable $48,000;
Supplies $6,000;
Long-term notes receivable $2,000;
Equipment $96,000;
Factory Building $180,000;
Intangible assets $6,000;
Accounts payable $30,000;
Accrued liabilities payable $4,000;
Short-term notes payable $14,000;
Long-term notes payable $92,000;
Common stock $180,000;
Retained earnings $60,000.
What are Pioneer's total current assets?

Accepted Answer

The answer of The Pioneer Company has provided the following...

Question 2

A company purchases a delivery van by paying $5,000 cash and by signing a $25,000 note payable. Which of the following correctly describes the recording of the delivery van purchase?

Accepted Answer

The answer of A company purchases a delivery van by...

Question 3

Which of the following statements is false?

Accepted Answer

The par value of common stock does not represent the stock's market value. Par value is a legal concept and represents the minimum price at which a share can be issued. The market value of a stock is determined by supply and demand in the market and can fluctuate above or below the par value.

Question 4

Superior has provided the following information for its recent year of operation: The common stock account balance at the beginning of the year was $20,000 and the year-end balance was $25,000.
The additional paid-in capital account balance increased $2,500 during the year.
The retained earnings balance at the beginning of the year was $75,000 and the year-end balance was $91,000.
Net income was $26,000.
How much were Superior's dividend declarations during its recent year of operation?

Accepted Answer

The answer of Superior has provided the following information for...

Question 5

Cadet Company paid an account payable of $1,000. This transaction should be recorded on the payment date as follows: A.
$\begin{array}{|c|c|c|}
\hline \text { Accounts payable } & 1,000 & \
\hline \text { Cash } & & 1,000 \
\hline
\end{array}$
B.
$\begin{array}{|c|c|c|}
\hline \text { Cash } & 1,000 & \
\hline \text { Accounts payable } & & 1,000 \
\hline
\end{array}$
C.
$\begin{array}{|c|c|c|}
\hline \text { Notes Payable } & 1,000 & \
\hline \text { Cash } & & 1,000 \
\hline
\end{array}$
D.
$\begin{array}{|c|c|c|}
\hline \text { Cash } & 1,000 & \
\hline \text { Cost of Goods Sold } & & 1,000 \
\hline
\end{array}$

Accepted Answer

The answer of Cadet Company paid an account payable of...

Question 6

Which of the following account balances would not be included in the calculation of the current ratio?

Accepted Answer

The current ratio only includes current assets (assets that can be easily converted into cash within a year) and current liabilities (liabilities that are due within a year). Equipment is a long-term asset and would not be included in the calculation of the current ratio. Accounts receivable, short-term notes payable, and supplies are all current assets or liabilities and would be included in the calculation of the current ratio.

Question 7

Which of the following journal entries is correct when a business entity issues common stock, above par value, to stockholders in exchange for cash? A. Cash
$\quad$Common stock
$\quad$Retained Earnings
B. Cash
$\quad$Common stock
$\quad$Additional paid-in capital
C. Cash
$\quad$Investments
D. Common stock
$\quad$Cash

Accepted Answer

The answer of Which of the following journal entries is...

Question 8

Which of the following statements does not properly describe the current ratio?

Accepted Answer

The current ratio is specifically a measure of a firm's short-run liquidity and ability to pay its short-term debts as they come due. It does not directly measure a firm's ability to pay long-term debts as they mature.

Question 9

Superior has provided the following information for its recent year of operation: The common stock account balance at the beginning of the year was $20,000 and the year-end balance was $25,000.
The additional paid-in capital account balance increased $2,500 during the year.
The retained earnings balance at the beginning of the year was $75,000 and the year-end balance was $91,000.
Net income was $26,000.
How much did Superior sell its common stock for during the year?

Accepted Answer

We can use the accounting equation to solve for the common stock value. The accounting equation is Assets = Liabilities + Equity, and equity is made up of common stock, additional paid-in capital, and retained earnings.

At the beginning of the year:
Equity = Common stock + Additional paid-in capital + Retained earnings
$95,000 = $20,000 + $0 + $75,000

At the end of the year:
Equity = Common stock + Additional paid-in capital + Retained earnings
$116,500 = $25,000 + $2,500 + $91,000

To find the common stock value, we can subtract the equity values:
$116,500 - $95,000 = $21,500

However, we need to account for the net income of $26,000. This increases the retained earnings balance, and thus decreases the value of common stock needed to balance the equation. We can subtract the net income from the retained earnings balance:

$91,000 - $26,000 = $65,000

Now we can re-calculate the common stock value:
$116,500 - $65,000 = $51,500

To find how much common stock was sold during the year, we can subtract the beginning balance from the end balance:
$25,000 - $20,000 = $5,000

Therefore, the correct answer is C) $7,500.

Question 10

Borrowing cash from a bank would result in which of the following?

Accepted Answer

The answer of Borrowing cash from a bank would result...

Question 11

Which of the following journal entries is correct when a business entity purchases land costing $30,000 by signing a one-year note payable?

Accepted Answer

The answer of Which of the following journal entries is...

Question 12

Which of the following journal entries is correct when a business entity pays cash for advertising to be used next year? A. Cash
$\quad$Advertising expense
B. Advertising expense 
$\quad$Cash
C. Cash
$\quad$Prepaid advertising expense
D. Prepaid advertising expense 
$\quad$Cash

Accepted Answer

The answer of Which of the following journal entries is...

Question 13

Which of the following transactions would result in an increase in the current ratio?

Accepted Answer

The answer of Which of the following transactions would result...

Question 14

Centex, Inc. issued 50,000 shares of its $1 par value common stock for $20 per share. The journal entry to record the stock issue would include which of the following?

Accepted Answer

The answer of Centex, Inc. issued 50,000 shares of its...

Question 15

Which of the following transactions would result in a decrease in the current ratio?

Accepted Answer

The answer of Which of the following transactions would result...

Question 16

Which of the following statements is correct?

Accepted Answer

The answer of Which of the following statements is correct?
...

Question 17

Which of the following journal entries is correct when a business entity uses cash to pay an account payable? A. Accounts Payable
$\quad$Cash
B. Accounts Receivable
$\quad$Cash
C. Cash
$\quad$Accounts Payable
D. Cash
$\quad$Notes Payable

Accepted Answer

The answer of Which of the following journal entries is...

Question 18

Which of the following journal entries is correct when common stock is sold for cash at a price greater than par value? A.Cash
$\quad$Retained earnings
B. Cash
$\quad$Additional paid-in capital 
$\quad$Common Stock
C. Cash
$\quad$Common Stock
D. Cash
$\quad$Common stock
$\quad$Additional paid-in capital

Accepted Answer

The answer of Which of the following journal entries is...

Question 19

Which of the following correctly describes the recording of a dividend declaration by a company's board of directors?

Accepted Answer

When a company's board of directors declares a dividend, it is recorded as a debit to retained earnings and a credit to dividends payable. This is because the company is reducing its earnings (retained earnings) and increasing its liability to pay out dividends (dividends payable). Option A is incorrect because the company does not immediately pay out the dividends. Option B is incorrect because additional paid-in capital is not affected by dividend declarations. Option C is incorrect because the company is not receiving cash when it declares a dividend but rather setting aside funds to pay out later.

Question 20

Which of the following journal entries is correct when a business entity purchases a building by paying cash and by signing a note payable for the balance? A. Building
$\quad$Cash
$\quad$Notes Payable
B. Building
$\quad$Cash
C. Cash
$\quad$Notes Payable
$\quad$Building
D. Building
$\quad$Cash
$\quad$Notes Payable

Accepted Answer

The answer of Which of the following journal entries is...

Quiz 2: Investing and Financing Decisions and the Accounting System

A company purchases a delivery van by paying $5,000 cash and by signing a $25,000 note payable. Which of the following correctly describes the recording of the delivery van purchase?

Which of the following statements is false?

Which of the following account balances would not be included in the calculation of the current ratio?

Which of the following statements does not properly describe the current ratio?

Borrowing cash from a bank would result in which of the following?

Which of the following journal entries is correct when a business entity purchases land costing $30,000 by signing a one-year note payable?

Which of the following journal entries is correct when a business entity pays cash for advertising to be used next year? A. Cash $\quad$ Advertising expense B. Advertising expense $\quad$ Cash C. Cash $\quad$ Prepaid advertising expense D. Prepaid advertising expense $\quad$ Cash

Which of the following transactions would result in an increase in the current ratio?

Centex, Inc. issued 50,000 shares of its $1 par value common stock for $20 per share. The journal entry to record the stock issue would include which of the following?

Which of the following transactions would result in a decrease in the current ratio?

Which of the following statements is correct?

Which of the following journal entries is correct when a business entity uses cash to pay an account payable? A. Accounts Payable $\quad$ Cash B. Accounts Receivable $\quad$ Cash C. Cash $\quad$ Accounts Payable D. Cash $\quad$ Notes Payable

Which of the following correctly describes the recording of a dividend declaration by a company's board of directors?

Quiz 2: Investing and Financing Decisions and the Accounting System

A company purchases a delivery van by paying $5,000 cash and by signing a $25,000 note payable. Which of the following correctly describes the recording of the delivery van purchase?

Which of the following statements is false?

Which of the following account balances would not be included in the calculation of the current ratio?

Which of the following statements does not properly describe the current ratio?

Borrowing cash from a bank would result in which of the following?

Which of the following journal entries is correct when a business entity purchases land costing $30,000 by signing a one-year note payable?

Which of the following journal entries is correct when a business entity pays cash for advertising to be used next year? A. Cash \quad Advertising expense B. Advertising expense \quad Cash C. Cash \quad Prepaid advertising expense D. Prepaid advertising expense \quad Cash

Which of the following transactions would result in an increase in the current ratio?

Centex, Inc. issued 50,000 shares of its $1 par value common stock for $20 per share. The journal entry to record the stock issue would include which of the following?

Which of the following transactions would result in a decrease in the current ratio?

Which of the following statements is correct?

Which of the following journal entries is correct when a business entity uses cash to pay an account payable? A. Accounts Payable \quad Cash B. Accounts Receivable \quad Cash C. Cash \quad Accounts Payable D. Cash \quad Notes Payable

Which of the following journal entries is correct when common stock is sold for cash at a price greater than par value? A.Cash \quad Retained earnings B. Cash \quad Additional paid-in capital \quad Common Stock C. Cash \quad Common Stock D. Cash \quad Common stock \quad Additional paid-in capital

Which of the following correctly describes the recording of a dividend declaration by a company's board of directors?

Which of the following journal entries is correct when a business entity pays cash for advertising to be used next year? A. Cash $\quad$ Advertising expense B. Advertising expense $\quad$ Cash C. Cash $\quad$ Prepaid advertising expense D. Prepaid advertising expense $\quad$ Cash

Which of the following journal entries is correct when a business entity uses cash to pay an account payable? A. Accounts Payable $\quad$ Cash B. Accounts Receivable $\quad$ Cash C. Cash $\quad$ Accounts Payable D. Cash $\quad$ Notes Payable