会计专业英语章节练习题及答案46.docx

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1、Chapter 1Discussion questions1. How does the job of a bookkeeper differ from that of an accountant?Bookkeeping is a mechanical process that records the routine economic activities of a business. Accounting includes bookkeeping but goes beyond it in scope.2. What kind of information can be defined as

2、 relevant information?Relevant accounting information is capable of making a difference in the decisions made by users. Accounting information is capable of making a difference in decisions if it has predictive value, confirmatory value, or both. In other words, it must be useful in helping users as

3、sess the future performance of the firm as well as provide feedback about prior decisions.3. What should be required to do according to Accounting Period Assumption?In the modern world, no business can afford to remain secretive because various parties such as creditors, employees, taxation authorit

4、ies, investors, public and government, are interested to know about the affairs of the business. Affairs of the business can be studied mainly by consulting final accounts and the balance sheet of the particular business. Final accounts and the balance sheet are end products of bookkeeping. Because

5、of the importance of these statements, it became necessary for the accountants to develop some assumptions, principles and conventions which may be regarded as fundamentals of accounting. Such fundamentals having wide acceptance give reliability and creditability to the financial statements prepared

6、 by the accountants.An assumption is a statement that is presumed to be true without concrete evidence to support it. In business world, perhaps the most common use of assumptions is in the accounting function, which uses assumptions to facilitate financial measurement, forecasting and reporting. Th

7、us, accounting assumptions may be defined as: basic postulates or assumptions which serve as the basis of actual recording.In developing generally accepted accounting principles (GAAP), certain basic assumptions are made. These assumptions provide a foundation for the accounting process. Four main a

8、ssumptions are business entity assumption, going concern assumption, monetary unit assumption, and accounting period assumption.4. How do accountants use the concept of materiality?Materiality principle relates to the extent to which information can be omitted, misstated or grouped with other inform

9、ation without misleading the financial information users when they are making their economic decisions. Thus the prices paid for insignificant items, such as for each piece of stationary, may not be shown6. ABC Company needs to determine the approximate amount of inventory at the end of each month w

10、ithout taking a physical inventory of merchandise. From the following information, you are required to determine the cost of the July 31 invenlory by using ihe retail invenlory method.CostRetail selling priceBeginning inventory, July 1$264,800$400,000Net purchase during July170,400240,000Goods avail

11、able for sale during July435,300640,000Net sale during July275,200Answer:The cost of the July 31 inventory is determined as follows:Ending inventory of July 31 at retail selling price=$640,000-$375,000=$364,800Ratio of cost to selling retail price=$435,200/$640,000=68%Ending inventory of July 31 at

12、cost=$364,000x68%=$248,064Chapter 4:Discussion Questions:1. Differences: (1) Current liabilities are amounts payable within one year from the date of the balance sheet or within the normal operating cycle, where this is longer than a year.(2) Non-current liabilities are those obligations not due fbr

13、 settlement within one year.2. Commons: (1) it must involve a future sacrifice of cash, goods, of services; (2) it must be an obligation of the enterprise; (3) the transaction or event giving rise to the enterprises obligation must already have occurred; (4) it is amount payable within one year from

14、 the date of the balance sheet or within the normal operating cycle.3. OmittedThe Financial Accounting Standards Board (FASB) provides these guidelines to account for contingent losses (or expenses) and their related liabilities:(1) Record an actual liability if it is probable that the loss (or expe

15、nses) will occur and the amount can be reasonably estimated.(2) Report the contingency in a financial statement note if it is reasonably possible that a loss (or expense) will occur. Lawsuits in progress are a prime example.(3) There is no need to report a contingent loss that is remote-unlikely to

16、occur. Instead wait until an actual transaction clears up the situation.Contingent liabilities may be reported in a short presentation, after total liabilities on the balance sheet, but with no amounts given.4. A bond is a fixed obligation to pay that is issued by a corporation or government entity

17、to investors.Bonds are used to raise cash for operational or infrastructure projects. Bonds usually include a periodic coupon payment, and are paid off as of a specific maturity date. Bonds are a number of additional features that a bond may have, such as being convertible into the stock of the issu

18、er, or callable prior to its maturity date.5. OmittedExercise:1-7： BACDBAB.答案：January 5： Fixed assetsoffice furniture 15,000 固定资产Account payable15,000 应付账款July 1 ： Account payable-Y company15,000 应付账款Cr： Notes payable15,000 应付票据Interest: $15,000x 5% =$750July 31/August 31/Sept. 30:Interest expense 7

19、50Interest payable 750October 1: Notes payable 15,000Interest payable 2,250Bank deposit 17,250March lsl Cash 5,000Unearned revenue 5,000March 31 Unearned revenue 3,000Service revenue 3,0001(). (a) Cash 2 125 000Premium on Bonds Payable125 000Bond Payable2 00() ()00Interest Expense 140 000Cash140 000

20、Premium on Bonds Payable 12 500Interest Expense12 50011. The journal entry to record issued bondDr. Cash482,000Discount on Bonds Payable18,000Cr. Bonds Payable500,000The journal entry to payment of bond interest and amortization of bond discount on the first interest date (July 1,200X)Dr. Bond Inter

21、est Expense31,800Discount on Bonds Payable1,800($ 18,000/10)Cr. Cash3(),(X)()($5()(),()()()x 12%x6/l 2)The journal entry to the maturity date company redemption the bonds.Dr. Bonds Payable500,000Bond Interest Payable30,000Cr. Cash530,000Chapter 5Discussion questionsWhy are large corporation often sa

22、id to be publicly owned?Ownership of a corporation is evidenced by transferable shares of stock. The sale of corporate ownership in units of one or more shares permits both large and small investors to participate in ownership of the business for this reason. Large corporations are often said to be

23、publicly owned.1. Explain the meaning of the term double taxation as it applies to corporate profits.The income of a corporation is subject to income taxes which must be paid by the corporation. If a corporation distributes its earnings to stockholders, the stockholders must pay personal income taxe

24、s on the amounts they receive. This practice of first taxing corporate income to the corporation and then taxing distributions of the income to the stockholders is sometimes called double taxation.2. Distinguish between paid-in capital and retained earnings of corporation.Paid-in capital is an equit

25、y account representing the amount of assets invested in the company by its shareholders. Retained earnings is a special type of reserve account which reflects the amount of profits (after tax) earned hy the company and retained in the business. And retained earnings represents a companys accumulated

26、 net income that has not been distributed to stockholders as dividends.3. What is the purpose of a stock split?A corporation may split its stock by increasing the number of outstanding shares of common stock and reducing the par or stated value per share in proportion. As with a large stock dividend

27、, the purpose of a stock split is to reduce substantially the market price of the common stock, with the intent of making the stock more affordable to investors.4. What does book value per share of common stock represent? Does it represent the amount common stockholders would receive in the event of

28、 liquidation of the corporation?Book value per share is equal to the net assets represented by one share of stock. The term net assets mean total assets minus total liabilities; in other words, net assets are equal to total stockholders, equity.5. What is treasury stock? Why do corporations purchase

29、 their own shares? Istreasury stock an asset? How should it be reported in the balance sheet?When treasury stock is purchased, the corporation is eliminating part of its stockholders, equity by a payment to one or more stockholders. The purchase of treasury stock should be regarded as a reduction of

30、 stockholders equity, not as the acquisition of an asset. For this reason, the Treasury Stock account should appear in the balance sheet as a deduction in the stockholders equity section.6. How is book value per share of common stock computed when a company has both preferred and common stock outsta

31、nding?If a company has both preferred and common stock outstanding, the computation of book value per share of common stock requires two steps. First, the redemption value or call price of the entire preferred stock issue and any dividends in arrears are deducted from total stockholdcrs, equity. Sec

32、ond, the remaining amount of stockholders, equity is divided by the number of common shares outstanding to determine book value per common share.ExercisesWhen a business is organized as a corporation, which of the following is true?A. Stockholders are liable for the debts of the business only in pro

33、portion to their percentage ownership of capital stock.B. Stockholders do not have to pay personal income taxes on dividends received, because the corporation is subject to income taxes on its earnings.C. Fluctuations in the market value of outstanding shares of capital stock do not affect the amoun

34、t of stockholders equity shown in the balance sheet.D. Each stockholder has the right to blind the corporation to contracts and to make other managerial decision.JAnswer: C1. GP Company was organized with authorization to issue 1 ()(),()()() shares of $1 par value common stock. Forty thousand shares

35、 were issued to Tom Morgan, the companys founder, at a price of $5 per share. No other shares have yet been issued. Which of the following statements is true?A. Morgan owns 40% of the stockholders, equity of the corporation.B. The corporation should recognize a $ 160,00() gain on the issuance of the

36、se shares.C. If the balance sheet includes retained earnings of $50,00(), total paid-in capital amounts to $250,000.D. In the balance sheet, the Additional Paid-in Capital will have a $ 160,000 balance, regardless of the profits earned or losses incurred since the corporation was organized.Answer: D

37、Which of the following is not a characteristic of the common stock of a large, publicly owned corporation?A. The shares may be transferred from one investor to another without disrupting the continuity of business operations.B. Voting rights in the election of the board of direction.C. A cumulative

38、right to receive dividends.D. After issuance, the market value of the stock is unrelated to its par value.4.$5,400,000100,000shares10,000shares2years$4,700,000Answer: CAnswer: B 5. On December 10, 2016, Totem Corporation reacquired 2,000 shares of its own $5 par slock at a price of $60 per share. In

39、 2017, 500 of the treasury shares are reissued at a price of $70 per share. Which of the following statement is correct? A. The treasury stock purchased is recorded at cost and is shown in Totems December 31,2016, balance sheet as an asset.B. The two treasury stock transactions result in an overall

40、reduction in Totems stockholders? equity of$85,000.C. Totem recognizes a gain of $1() per share on the reissuance of the 500 treasury shares in 2017.D. Totems stockholders, equity was increased by $110,000 when then treasury stock was acquired.Answer: BChapter 6Discussion questions5. What does reven

41、ue mean in the context of accounting?Revenue is the amount of money that a company actually receives during a specific period, including discounts and deductions for returned merchandise. It is the top line or gross income figure from which costs are subtracted to determine net income.6. What does e

42、xpense mean in the context of accounting?An expense is the reduction in value of an asset as it is used to generate revenue. If the underlying asset is to be used over a long period of time, the expense takes the form of depreciation, and is charged ratably over the useful life of the asset. If the

43、expense is for an immediately consumed item, such as a salary, then it is usually charged to expense as incurred. If an expenditure is for a minor amount that may not be consumed for a long period of time, it is usually charged to expense at once, to eliminate the accounting staff time that would ot

44、herwise be required to track it as an asset.7. What is matching principle?A fundamental concept of accrual basis accounting that offsets revenue against expenses on the basis of their cause-and-effect relationship. It states that, in measuring net income for an accounting period, the costs incurred

45、in that period should be matched against the revenue generated in the same period.8. Whats the difference between expense and expenditure?An expense is not the same as an expenditure. An expenditure is a payment or the incurrence of a liability, whereas an expense represents the consumption of an as

46、set. Thus, a company could make a $ 10,000 expenditure of cash for a fixed asset, but the $ 10,00() asset would only be charged to expense over the term of its useful life. Thus, an expenditure generally occurs up front, while the recognition of an expense might be spread over an extended period of

47、time.9. What does revenue mean for nonprofit organization?For non-profits, revenue is often referred to as gross receipts. Its components include donations from individuals, foundations and companies; grants from government entities; investments; fundraising activities; and membership fees.Exercises

48、. In the closing process all of the revenues and expenses account balances are trans ferred to the ().A. capital accountB. income summary accountC. retained earnings accountD. dividends accountAnswer: B1 . If revenue was $45000, expenses were $37500, and dividends were #10000, the amount of net inco

49、me or net loss would be ().A. $45000 net incomeB. $37500 net lossC. $7500 net incomeD. $2500 net lossAnswer: C2 . Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are:A. Real accounts.B. Temporary accounts.C. Closing accounts.D. Permanent accounts.E. Balance sh