1. Liabilities are classified on the balance sheet as current or
A. long-term.
B. accrued.
C. deferred.
D. unearned.

2. A current liability is a debt that can reasonably be expected to be paid
A. out of cash currently on hand.
B. between 6 months and 18 months.
C. out of currently recognized revenues.
D. within one year, or the operating cycle, whichever is longer.

3. Moss County Bank agrees to lend the Marin Company $600000 on January 1. Marin Company signs a $600000, 10%, 9-month note. Recording the proceeds and issuance of the note by Marin Company on January 1 includes a[n]
A. Increase to Cash for $600000, increase to Interest Expense for $45000, and an increase to Notes Payable for $645000.
B. Increase to Cash for $600000, increase to Interest Expense for $45000, increase to Notes Payable for $600000, and an increase to Interest Payable for $45000.
C. Increase to Cash and to Notes Payable for $600000.
D. Increase to Interest Expense for $45000, increase to Cash for $555000, and an increase to Notes Payable for $600000.

4. The interest charged on a $800000 note payable, at the rate of 33%, on a 60-day note would be (Use 360 days for calculation.)
A. $12000.
B. $24000.
C. $6000.
D. $4000.

5. The statement “Bond prices vary inversely with changes in the market rate of interest” means that if the
A. contractual interest rate increases, then bond prices will go down.
B. contractual interest rate increases, the market rate of interest will decrease.
C. market rate of interest increases, the contractual interest rate will decrease.
D. market rate of interest decreases, then bond prices will go up.

6. The Paid-in Capital in Excess of Par Value is increased in the accounting records when
A. the number of shares issued exceeds par value.
B. the stated value of capital stock is greater than the par value.
C. capital stock is issued at an amount greater than par value.
D. the market value of the stock rises above par value.

7. Treasury stock is
A. corporate stock issued by the treasurer of a company.
B. stock purchased by a corporation and held as an investment in its treasury.
C. a corporation’s own stock, which has been reacquired and held for future use.
D. stock issued by the US. Treasury Department.

8. Treasury stock should be reported in the financial statements of a corporation as a[n]
A. deduction from total paid-in capital and retained earnings.
B. investment
C. deduction from total paid-in capital.
D. liability.

9. Which of the following is not a right or preference associated with preferred stock?
A. The right to vote.
B. Preference to corporate assets in case of liquidation.
C. To receive dividends in arrears before common stockholders receive dividends.
D. First claim to dividends.

10. The date on which a cash dividend becomes a binding legal obligation is on the
A. declaration data.
B. date of record.
C. payment date.
D. last day of the fiscal year end.