Question

When common stock is issued for services or non-cash assets, cost should be only the fair...

When common stock is issued for services or non-cash assets, cost should be

only the fair value of the consideration received.
the book value of the common stock issued.
only the fair value of the consideration given up.
either the fair value of the consideration given up or the consideration received, whichever is more clearly evident.

Each of the following is reported for common stock except the

par value.
shares issued.
liquidation value.
shares outstanding.

A prior period adjustment that corrects income of a prior period requires that an entry be made to

a current year revenue or expense account.
the retained earnings account.
an asset account.
an income statement account.

Prior period adjustments are reported

on the current year's income statement.
on the current year's balance sheet.
on the current year's retained earnings statement.
in the footnotes of the current year's financial statements.

The current portion of long-term debt should

be paid immediately.
be reclassified as a current liability.
not be separated from the long-term portion of debt.

be classified as a long-term liability.

The Mayer and Rodin partnership agreement stipulates that profits and losses will be shared equally after salary allowances of $406000 for Mayer and $197000 for Rodin. At the beginning of the year, Mayer’s Capital account had a balance of $793000, while Rodin’s ' Capital account had a balance of $709000. Net income for the year was $502000. The balance of Rodin’s Capital account at the end of the year after closing is

$855500.
$906000.
$207000.
$956500.

The partnership of Bher and Dhillips reports net income of $119400. The partners share equally in income and losses. The entry to record the partners' share of net income will include a

credit to Dhillips, Drawing for $59700.
credit to Income Summary for $119400.
debit to Dhillips, Capital for $59700.
credit to Bher, Capital for $59700.

Accounting for treasury stock is done by the

LIFO method.
market method.
cost method.
lower of cost or market method.
Business   Accounting   
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Homework Answers

Answer #1

1. When common stock is issued for non cash assets cost should be lower of fair value of asset recieved or consideration paid for the acquisition of asset.

2. Common stock will not ne reported in liquidation value.

3. Prior period adjustment that correct the prior period income that requires entry to be made to retained earnings. Because the prior period income is merged in retained earnings.

Prior period adjustment are reported on current year retained earnings statement.

Accounting of treasury stock is done by the lower of cost or market method.

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