Explore BrainMass
Share

Multiple Choice

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

1. Poster Inc. owns 35 percent of Elliott Corporation. During the calendar year 2003, Elliott had net earnings of $300,000 and paid dividends of $36,000. Poster mistakenly accounted for the investment in Elliott using the cost method rather than the equity method of accounting. What effect would this have on the investment account and net income, respectively?

A. Understate, overstate
B. Overstate, understate
C. Overstate, overstate
D. Understate, understate

2. Marino Corporation purchased the following portfolio of trading securities during 2008 and reported the following balances at December 31, 2008. No sales occurred during 2008. All declines are considered to be temporary.

Security Cost Market Value at 12/31/08
X $ 80,000 $ 82,000
Y 140,000 132,000
Z 32,000 28,000

The only transaction in 2009 was the sale of security Z for $34,000 on December 31, 2009. The market values for the other securities at December 31, 2009 were the same as at December 31, 2008. Marino's entry to record the sale of security Z would include

A. a credit of $2,000 to Realized Gain on Sale of Trading Securities.
B. a debit of $2,000 to Realized Gain on Sale of Trading Securities.
C. a $2,000 debit to Market Adjustment-Trading Securities.
D. a $4,000 debit to Market Adjustment-Trading Securities.

3. At the beginning of the year, a company had a debit balance in the account Market Adjustment-Trading Securities. During the year the company didn't buy or sell any trading securities, but at the end of the year the related market adjustment account had a credit balance. This change indicates

A. a loss on the income statement was recognized.
B. a gain on the income statement was recognized.
C. the value of the investment account increased.
D. the value of the investment account decreased.

4. When an investor uses the cost method to account for investments in common stock, cash dividends received by the investor from the investee should normally be recorded as

A. a deduction from the investment account.
B. dividend revenue.
C. an addition to the investor's share of the investee's profit.
D. a deduction from the investor's share of the investee's profit.

For each situation listed in questions 5-8, indicate by letter the appropriate financial statement element being discussed.
5. The net assets of an entity

A. Investment by owners C. Owners' equity
B. Distributions to owners D. Revenues

6. An increase in net assets through the issuance of stock

A. Investment by owners C. Owners' equity
B. Distributions to owners D. Revenues

7. The payment of a dividend

A. Investment by owners C. Owners' equity
B. Distributions to owners D. Revenues

8. Items offering future value to an entity

A. Investment by owners C. Owners' equity
B. Distributions to owners D. Revenues

9. Edwards Company began business in February of 2007. During the year, Edwards purchased the three trading securities listed below. On its December 31, 2007, balance sheet, Edwards appropriately reported a $4,000 credit balance in its Market Adjustment- Trading Securities account. There was no change during 2008 in the composition of Edward's portfolio of trading securities. Pertinent data are as follows:

Security Cost Market Value December 31, 2008

A $120,000 $126,000
B 90,000 80,000
C 160,000 157,000
$370,000 $363,000

What amount of loss on these securities should be included in Edward's income statement for the year ended December 31, 2008?

A. $0 C. $7,000
B. $3,000 D. $11,000

10. On January 1, 2008, Capitech Corporation acquired Logirun, Inc. as a long-term investment
for $250,000 (a 30 percent common stock interest in Logirun). On that date, Logirun had net assets with a book value and current market value of $800,000. During 2008, Logirun reported net income of $90,000 and declared and paid cash dividends of $20,000. What is the maximum amount of income that Capitech should report from this investment for 2008?

A. $6,000 C. $26,750
B. $21,000 D. $27,000

For each situation listed in questions 11-12, indicate by letter the appropriate accounting assumption being discussed.

11. When preparing the financial statements for MacNeil & Sons, the accountant included certain personal assets of MacNeil and his sons in preparing the statements.

A. Stable monetary units C. Going concern
B. Specific economic entity D. Arm's-length transactions

12. The operations of Uintah Savings and Loan are being evaluated by the federal government.
During their investigations, government officials have determined that numerous loans made by top management were unwise and have seriously endangered the future of the savings and loan.

A. Stable monetary units C. Going concern
B. Specific economic entity D. Arm's-length transactions

13. On October 1, Dennis Company purchased $200,000 face value 12 percent bonds for 98 plus accrued interest and brokerage fees and classified them as held-to-maturity securities. Interest is paid semiannually on January 1 and July 1. Brokerage fees for this transaction were $700.

At what amount should this acquisition of bonds be recorded?
A. $196,000 C. $202,000
B. $196,700 D. $202,700

For each situation listed in questions 14-17, indicate by letter the appropriate qualitative characteristic or accounting concept applied.

14. All payments out of petty cash are debited to miscellaneous expense.

A. Materiality C. Economic entity
B. Representational faithfulness D. Historical cost

15. Periodic payments of $1,500 per month for services of H. Hay, who is the sole proprietor of the company, are reported as withdrawals.

A. Materiality C. Economic entity
B. Representational faithfulness D. Historical cost

16. Investments in equity securities are initially recorded at cost.

A. Materiality C. Economic entity
B. Representational faithfulness D. Historical cost

17. A note describing the company's possible liability in a lawsuit is included with the financial
statements even though no formal liability exists at the balance sheet date.

A. Materiality C. Economic entity
B. Representational faithfulness D. Historical cost

18. In March of 2007, Moon Corp. bought 45,000 shares of McMahon Corp.'s listed stock for
$450,000 and classified the shares as available-for-sale securities. The market value of these shares had declined to $300,000 by December 31, 2007. Moon changed the classification of these shares to trading securities in June of 2008 when the market value of this investment in McMahon's stock had risen to $345,000. How much should Moon include as a loss on transfer of securities in its determination of net income for 2008?

A. $0 C. $105,000
B. $45,000 D. $150,000

19. Walsh, Inc. began business on January 1, 2007, and at December 31, 2007, Walsh had the following investment portfolios of equity securities:

Trading Available-For-Sale
Aggregate cost $150,000 $225,000
Aggregate market value 120,000 185,000

None of the declines is judged to be other than temporary. Unrealized losses at December 31, 2007, should be recorded with corresponding charges against

Income Stockholders' Equity
A. $70,000 $0
B. $40,000 $30,000
C. $30,000 $40,000
D. $0 $70,000

20. Martin Co. purchased the following portfolio of trading securities during 2007 and reported
the following balances at December 31, 2007. No sales occurred during 2007. All declines are considered to be temporary.

Security Cost Market Value at 12/31/2007
X $ 80,000 $ 82,000
Y 140,000 132,000
Z 32,000 28,000

The carrying value of the portfolio at December 31, 2007, on Martin Co.'s balance sheet would be

A. $222,000. C. $242,000.
B. $240,000. D. $252,000

© BrainMass Inc. brainmass.com October 16, 2018, 10:28 pm ad1c9bdddf
https://brainmass.com/business/valuing-securities/multiple-choice-221602

Solution Summary

The solution explains various multiple choice questions relating to investment income, trading securities, dividends, bonds, equities and market

$2.19
Similar Posting

Amino acids multiple choice questions

Which statement is incorrect about the classification of amino acids?
a. Alanine and valine are neutral, nonpolar amino acids.
b. Lysine and arginine are basic amino acids.
c. Tryptophan and phenylalanine are aromatic amino acids.
d. Aspartic acid and aspargine are acidic amino acids.

Which of the following amino acids is the least water soluble at pH 7.0?
a. Tryptophan
b. Glutamic acid
c. Cysteine
d. Histidine

Which amino acid would migrate the furthest toward the anode (positive electrode) during paper electrophoresis at pH 7.0?
a. Aspartic acid
b. Alanine
c. Lysin
d. Glutamine

Which of the following functional groups, attached to an inert matrix, could function as a cation exchanger?
a. Diethylaminoethyl-
b. p-aminobenzyl-
c. Carboxymethyl-
d. Trimethylammonium-

Which of the following amino acids would make the best buffer at pH 4.5?
a. Histidine
b. Alanine
c. Glutamine
d. Aspartic acid

Which fact is incorrect about stereoisomers?
a. A diastereomer is a nonsuperimposable non-mirror image.
b. An enantiomer is a nonsuperimposible mirror image.
c. Diastereomers have different melting points.
d. Diastereomers rotate plane polarized light in equal but opposite direction.

Which statement is incorrect about L-isoleucine?
a. Its enantiomer is named O-isoleucine.
b. It contains a total of two asymmetric or chiral carbons.
c. It can also be named as (28, 38)-isoleucine using the (R,8) system.
d. Its diastereomer would be named O-alloisoleucine.

An isoelectric amino acid was dissolved in water and the resulting pH was approximately 7.6. What amino acid would possess this property?
a. Alanine
b. Glutamic acid
c. Histidine
d. Lysine

What volume of NaOH is required to adjust the solution of monosodium aspartate to pH 9.8?
a. 1 ml
b. 2 ml
c. 3 ml
d. 6 ml or more

What volume of 2 N Hel is required to completely titrate the 4 mmol of monosodium aspartate?
a. 2 ml
b. 3ml
c. Aml
d. 6 ml or more

Which statement is correct about the peptide ala-ser?
a. Alanine is at the N-terminal of the peptide.
b. There are a total six atoms that lie in the plane of the peptide bond linking alanine to serine.
c. The alpha-carbon of alanine is sp3 hybridized d All the above are correct statements.

What is the product formed from the acid hydrolysis of a simple amide?
a. Acid & base
b. Aldehyde & alcohol
c. Acid & amine
d. Ester & alcohol

The complete acid hydrolysis of the peptide ala-gln-trp-ser would yield:
a. Ala, gin, trp, ser
b. Ala, glu, ser
c. Ala, glu, trp, ser
d. Ala. ser

Fibrous proteins, such as collagen, have which of the following properties?
a. Highly soluble in water
b. Their hydrophilic residues are directed into the interior of the protein
c. Exhibit enzymatic activity
d. Serve structural roles in the cell

Quaternary structure is associated with:
a. The overall shape of a polypeptide chain
b. The sum of the secondary and tertiary interactions
c. Simple proteins with only one subunit
d. The relative orientation of one polypeptide to another polypeptide in a multi-subunit protein.

The information needed to define the structure of a protein is essentially contained in:
a. Amino acid composition
b. Amino acid sequence
c. Secondary structure
d. Tertiary structure.

Insulin is a polypeptide hormone that contains two short polypeptide chains linked by two interstrand disulfide bonds. The most logical order of events to perform in order to sequence this protein would be:
A: The peptides are reduced with mercaptoethanol.
B: The peptides are sequenced using Edman chemistry .
C: The peptides are separated by chromatography techniques. 0: The peptides are alkylated with iodoacetamide.
a. A, D,C, B b.C,A, 0, B
c. C, B, A, 0
d. A, B, C, 0

Which statement is incorrect about the peptide val-asp-trp-asn-ser?
a. This peptide would show a strong absorption band at 280 nm.
b. Reaction with chymotrypsin would yield two peptides.
c. To synthesize this peptide using the solid phase method of Merrifield, the amino acid directly attached to the resin would be serine.
d. After the second round of Edman chemistry using the reagent PITC, the PTH -amino acid residue released would be PTH-asn.

Which statement is incorrect about the reaction of the peptide ser-Iys-asp-trp-cys-metasn-phe-ala with the following reagents?
a. Reaction with cyanogens bromide would yield two peptides.
b. Reaction with trypsin would result in three peptides. The smallest of three peptides would have the highest pi of the three.
c. Reaciton with chymotrypsin would result in the peptides ser-Iys-asp & try-cys-met-Iysasn-phe-ala .
d. Reaction with chymotrypsin would yield a different set of peptides that overlap those obtained with tryspsin

Determine the amino acid sequence of the following oligopeptide from the experimental data below:
The amino acid composition is found the be ala, Iys, phe, met, cys plus some
decompsition products.
2. The peptide has a molecular weight around 700 Da and absorbs at 280 nm.
3. Treatment with carboxypeptidase results in tryptophan and a peptide.
4. CNBr treatment yields a tetrapeptide and a dipeptide.
5. Trypsine digestion produces an amino acid and a pentapeptide with met on the amino end.
6. Chymotrypsin digestion yields a dipeptide and a tetrapeptide.
a. trp-Iys-met-cys-met-ala
b. Iys-met-cys-phe-ala-trp
c. trp-ala-phe-cys-met-Iys
d. Iys-ala-cys-phe-met -trp

View Full Posting Details