ACC 432 Final Exam: Advanced Accounting Concepts And Applications
Final exam covering advanced concepts and applications in accounting.
David Miller
Contributor
4.1
40
about 1 month ago
Preview (3 of 7)
Sign in to access the full document!
ACC 432 Final Exam: Advanced Accounting Concepts And Applications
ACC 432 FINAL EXAM LATEST
1) Proceeds from an issue of debt securities having stock warrants should NOT be allocated
between debt and equity features when
A. the allocation would result in a discount on the debt security.
B. the warrants issued with the debt securities are nondetachable.
C. exercise of the warrants within the next few fiscal periods seems remote.
D. the market value of the warrants is NOT readily available.
2) The conversion of preferred stock may be recorded by the
A. market value method.
B. par value method.
C. book value method.
D. incremental method.
3) The conversion of preferred stock into common stock requires that any excess of the par
value of the common shares issued over the carrying amount of the preferred being converted
should be
A. treated as a prior period adjustment.
B. treated as a direct reduction of retained earnings.
C. reflected currently in income as an extraordinary item.
D. reflected currently in income, but NOT as an extraordinary item.
4) A primary source of stockholders' equity is
A. contributions by stockholders.
B. both income retained by the corporation and contributions by stockholders.
C. appropriated retained earnings.
D. income retained by the corporation.
5) Stockholders' equity is generally classified into two major categories:
A. retained earnings and unappropriated capital.
B. earned capital and contributed capital.
C. appropriated capital and retained earnings.
D. contributed capital and appropriated capital.
6) When a corporation issues its capital stock in payment for services, the least appropriate
basis for recording the transaction is the
ACC 432 FINAL EXAM LATEST
1) Proceeds from an issue of debt securities having stock warrants should NOT be allocated
between debt and equity features when
A. the allocation would result in a discount on the debt security.
B. the warrants issued with the debt securities are nondetachable.
C. exercise of the warrants within the next few fiscal periods seems remote.
D. the market value of the warrants is NOT readily available.
2) The conversion of preferred stock may be recorded by the
A. market value method.
B. par value method.
C. book value method.
D. incremental method.
3) The conversion of preferred stock into common stock requires that any excess of the par
value of the common shares issued over the carrying amount of the preferred being converted
should be
A. treated as a prior period adjustment.
B. treated as a direct reduction of retained earnings.
C. reflected currently in income as an extraordinary item.
D. reflected currently in income, but NOT as an extraordinary item.
4) A primary source of stockholders' equity is
A. contributions by stockholders.
B. both income retained by the corporation and contributions by stockholders.
C. appropriated retained earnings.
D. income retained by the corporation.
5) Stockholders' equity is generally classified into two major categories:
A. retained earnings and unappropriated capital.
B. earned capital and contributed capital.
C. appropriated capital and retained earnings.
D. contributed capital and appropriated capital.
6) When a corporation issues its capital stock in payment for services, the least appropriate
basis for recording the transaction is the
A. market value of the shares issued.
B. Any of these provides an appropriate basis for recording the transaction.
C. par value of the shares issued.
D. market value of the services received.
7) Treasury shares are
A. shares held as an investment by the treasurer of the corporation.
B. issued but NOT outstanding shares.
C. shares held as an investment of the corporation.
D. issued and outstanding shares.
8) "Gains" on sales of treasury stock (using the cost method) should be credited to
A. paid-in capital from treasury stock.
B. other income.
C. capital stock.
D. retained earnings.
9) How should a "gain" from the sale of treasury stock be reflected when using the cost
method of recording treasury stock transactions?
A. As ordinary earnings shown on the income statement.
B. As an extraordinary item shown on the income statement.
C. As paid-in capital from treasury stock transactions.
D. As an increase in the amount shown for common stock.
10) In computing earnings per share, the equivalent number of shares of convertible preferred
stock are added as an adjustment to the denominator (number of shares outstanding). If the
preferred stock is cumulative, which amount should then be added as an adjustment to the
numerator (net earnings)?
A. Annual preferred dividend
B. Annual preferred dividend divided by the income tax rate
C. Annual preferred dividend times (one minus the income tax rate)
D. Annual preferred dividend times the income tax rate
11) When computing diluted earnings per share, convertible bonds are
A. ignored.
B. assumed converted only if they are dilutive.
C. assumed converted whether they are dilutive or antidilutive.
D. assumed converted only if they are antidilutive.
B. Any of these provides an appropriate basis for recording the transaction.
C. par value of the shares issued.
D. market value of the services received.
7) Treasury shares are
A. shares held as an investment by the treasurer of the corporation.
B. issued but NOT outstanding shares.
C. shares held as an investment of the corporation.
D. issued and outstanding shares.
8) "Gains" on sales of treasury stock (using the cost method) should be credited to
A. paid-in capital from treasury stock.
B. other income.
C. capital stock.
D. retained earnings.
9) How should a "gain" from the sale of treasury stock be reflected when using the cost
method of recording treasury stock transactions?
A. As ordinary earnings shown on the income statement.
B. As an extraordinary item shown on the income statement.
C. As paid-in capital from treasury stock transactions.
D. As an increase in the amount shown for common stock.
10) In computing earnings per share, the equivalent number of shares of convertible preferred
stock are added as an adjustment to the denominator (number of shares outstanding). If the
preferred stock is cumulative, which amount should then be added as an adjustment to the
numerator (net earnings)?
A. Annual preferred dividend
B. Annual preferred dividend divided by the income tax rate
C. Annual preferred dividend times (one minus the income tax rate)
D. Annual preferred dividend times the income tax rate
11) When computing diluted earnings per share, convertible bonds are
A. ignored.
B. assumed converted only if they are dilutive.
C. assumed converted whether they are dilutive or antidilutive.
D. assumed converted only if they are antidilutive.
Preview Mode
Sign in to access the full document!
100%
Study Now!
XY-Copilot AI
Unlimited Access
Secure Payment
Instant Access
24/7 Support
Document Chat
Document Details
University
National University
Subject
Accounting