ACC 225 ACC225 Module 7 Check Your Understanding Answers (AAU Online)

ACC 225 ACC225 Module 7 Check Your Understanding Answers (AAU Online)


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ACC 225 Module 7 Check Your Understanding (AAU Online)

1.What is an annuity?

2.Assuming an annual interest rate of 12%, what factor from the tables would be used to calculate the amount that would be accumulated in the bank if a specified amount be deposited in a bank each year for fifteen years?

3.List examples of a long-term liability.

4.Mortgage payments usually include:

5.Another term for unsecured bonds is:

6.When do serial bonds mature?

7.What is the computation for the debt ratio?

8.Which form of business organization is characterized by limited liability and unlimited life?

9.The type of stock that usually carries preference as to voting rights is:

10.To determine if treasury stock is sold at a loss, the selling price is compared to its:

11.On January 1, 2011, Cedar Company was authorized to issue 40,000 shares of $6 par common stock and 20,000 shares of $16 preferred stock.  Given this information, if Cedar Company issued 12,000 shares of common stock for $10 per share on January 10, 2011, the entry to record the issuance of the stock would include a credit to which account and for what amount?

12.Juarez Corporation had 20,000 shares of $2 par value common stock outstanding on January 1, 2011.  On January 31, 2011, the firm purchased 2,000 of its outstanding shares for $9 per share.  On July 11, 2011, it reissued 1,000 shares at $11 per share.  Given this information, the entry to record the reissuance of the stock on July 11 would include a credit to:

13.The retained earnings balance of Eureka Company was $93,600 on January 1, 2012.  Net income for 2012 was $52, 960.  If retained earnings had a credit balance of $42,000 after closing entries were posted on December 31, 2012 and if additional stock of $26,000 was issued during the year, dividends paid during 2012 were:

14.Drabo Corporation was authorized to issue 10,000 shares of 8% cumulative preferred stock with a par value of $10.  For the past two years, 5,000 shares have been outstanding and no dividends have been paid to preferred stockholders.  If a $20,000 dividend was declared in the current year, how much of the dividend would be paid to preferred stockholders?

15.Which of the financial statement reconciles the beginning and ending balances for all stockholders’ equity accounts on the balance sheet?

16.Exercise 10-24 “Computing the Future Value of a Single Sum” (pp. 485-486)

17.Exercise 11-18 “No-Par Stock Transactions” (p. 534)

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