MULTIPLE CHOICE Choose the best answer for each question. Use the dropdown to select each answer. The dropdown is in column B. There are 20 questions. Use the dropdowns to choose your ans Use dropdown... Select Answer: 1 ebook value of an asset is equal to the asset cost minus: A. Salvage Value B. Accumulated Depreciation C. the depreciation rate D. asset life 2 Select Answer: Marnie Company purchased an truck for $42,000. The truck has a life of 9 years and salvage value of $6,000. The straight line depreciation would be how much per year? A. $4,000 B. $4,200 C. $2,100 D. $4,667 3 Select Answer: Marnie Company purcased an truck for $42,000. The truck has a life of 9 years and salvage value of $6,000. How much depreciation would be charged in year 1 under double declining balance depreciation? A. $4,667 B. $2,100 C. 9,333 D. $4,000 4 Select Answer: Limbo Manufacturing has a machine that cost $22,000. The accumulated depreciation is $17,000. The company sold the machine for $9,000. What was the gain or loss? A. Loss of $4,000 B. Gain of $4,000 C. No gain or loss D. Loss of $13,000 5 Select Answer: If Limbo Manufacturing sells a machine for cash, what type of cash flow will result? A. Operating cash flow B. Financing cash flow C. Investing cash flow D. Noncash investing and financing cash flow Select Answer: Who pays unemployment taxes? A. Employee only B. Employer only C. Both employer and employee D. Neither employer nor employee 7 Select Answer: who pays social security and medicare taxes? A. Employee only B. Employer only C. Both employer and employee D. Neither employer nor employee 8 Select Answer: Which one of the following is not a payroll tax? A. State unemployment tax B. Federal unemployment tax C. Match on employee medicare tax D. Employee income taxes 9 Select Answer: Name a serious disadvantage to forming a partnership. A. Unlimited liability for each partner B. Ability to bring together the skills and resources of partners C. Easy to form a partnership D. Income taxes must be paid by a partnership 10 Select Answer: Carney Corp. borrowed $10,000 on a 3-month 6% note payable. How much interest will Carney pay on this note? A. $600 B. $60 C. $1,500 D. $150 11 Select Answer: Zillion Corpoation issued 100,000 shares of $1.00 par common stock at a price of $5.00 per share. What account is used for the extra money received, beyond the par value? A. It is net income and should go to Retained Earnings B. It represents a liability that the corporation must pay back C. It should be reported on the income statement D. It goes to the Paid in Capital in Excess of Par account and is not part of net income 12 Select Answer: A corporation purchases shares of its own stock for the purpose of rewarding executives and other employees. These shares are called: A. preferred stock B. treasury stock C. stock dividends D. cash dividends 13 Select Answer: Carmen Corporation issued one million shares of $5.00 par stock. On a cash flow statement, the cash received from this stock issuance would be considered what type of cash flow? A. operating cash flow B. investing cash flow C. financing cash flow D. it would not be considered a cash flow 141 Select Answer: Carmen Corporation declared and paid a $1.50 cash dividend to common stockholders. How would this cash dividend be classified on Carmen's cash flow statement? A. financing cash flow B. investing cash flow C. operating cash flow D. it would not be considered a cash flow 15 Select Answer: on a cash flow statement using the Indirect Method, how would noncash expenses such as depreciation, depletion and amortization be treated? A. subtract depreciation from the net income figure B. add back the depreciation to the net income figure C. subtract depreciation from the cash flows from investing D. subtract depreciation from cash flows from financing 16 Select Answer: Name a characteristic of preferred stock. A. Only preferred stockholders are allowed to vote for the board of directors. B. Preferred stockholders are required to receive a dividend every year. C. Preferred stockholders receive a fixed dividend amount or percentage. D. If the corporation liquidates, only the common shareholders will receive proceeds. 17 Select Answer: Donna borrowed $400,000 from Bank of America on a 6% 30-year installment loan with monthly payments. How would the payment be determined? A. Multiply $400,000 times the interest factor for 30 years at 6%. B. Multiply $400,000 times the interest factor for 30 years at 1/2%. C. Divide $400,000 by the interest factor for 30 years at 1/2%. D. Divide $400,000 by the interest factor for 30 years at 1%. 18 Select Answer: Which of the following depreciation methods is accelerated? A. Straight line B. Double Declining Balance C. Units of Activity D. All of these are accelerated 19 Select Answer: Which of the following types of business entities is required to pay income tax? A. proprietorship B. partnership C. corporation D. None of these 20 Select Answer: How would you characterize the account Discount on Bonds Payable? A. The discount on bonds payable represents extra cash received when the bonds were issued. B. The discount on bonds payable is considered extra future interest expense, because of the cash not received at bond issuance. C. The discount on bonds payable has a credit balance which adds to the bond's carrying value. D. The discount on bonds payable represents a decrease in future interest expense