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    11.If retained earnings are appropriated for bond retirement, a bond retirement sinking fund must be established.          12.The Bond Sinking Fund Investment account is reported as an investment in the Assets section of the balance sheet.          13.When bonds are issued at a price below face value, the Discount on Bonds Payable account is credited for the difference between the issue price and the face value.          14.Interest on bonds must be paid in full even when the corporation operates at a loss.          15.Bond interest is not deducted when […]

    65.Which of the following statements is correct?    A. The Common Stock Dividends Distributable account is shown as a current liability on the balance sheet.   B. When a stock dividend is distributed, no assets leave or enter the corporation.   C. When a stock dividend is declared, the total amount debited to Retained Earnings is the par value, or stated value, of the shares to be issued.   D. When a stock dividend is declared, the total amount of the dividend is debited to the Common Stock account.         66.Which of the following statements is not correct?    A. The entry […]

True / False Questions  1.Usually, there is a difference between the net income reported on the income statement and the net cash from operating activities shown on the statement of cash flows.          2.The statement of cash flows provides information about cash flows from operating activities, investing activities, and financing activities.          3.By analyzing past cash flows, financial statement users can identify the primary sources and uses of cash.          4.An increase or decrease in accounts payable during a fiscal period has no effect on the net cash provided by operating activities.        […]

    54.Percentages of a base amount rather than dollar amounts are given for the items on ____________________ statements.          55.The comparison of dollar amounts or percentages over several periods is called ____________________ analysis.          56.The yield on common stock is computed by dividing the dividend per share of common stock by the current ____________________ price of the share.          57.The rate of ____________________ on total assets measures the earnings on the assets used by a company.          58.The current ratio is a measure of _____________________; that is, the ability of a […]

    36.Net income must be adjusted for changes in ____________________ assets and liabilities, such as accounts receivable and accounts payable, when determining the net cash provided by operating activities.          37.A gain on the sale of equipment is reported in the ____________________ activities section of the statement of cash flows.          38.The purchase of treasury stock is treated as a cash outflow in the ____________________ activities section of the statement of cash flows.          39.Interest expense is treated as an outflow of cash that results from a(n) ____________________ activity.          40.The […]