ACC 400 Course Great Wisdom / tutorialrank.com ACC 400 Course Great Wisdom / tutorialrank.com | Page 20

8. On the Balance Sheet the current portion of long-term debt should
a. be paid immediately. b. be reclassified as a current liability. c. be
classified as a long-term liability. d. not be separated from the longterm portion of debt.

9. Bonds that are subject to retirement at a stated dollar amount prior
to maturity at the option of the issuer are called a. options. b. early
retirement bonds. c. callable bonds. d. debentures.

10. The Muffin Company issued a five-year interest-bearing note
payable for $50,000 on January 1, 2005. Each January the company is
required to pay $10,000 on the note. How will this note be reported on
the December 31, 2006, balance sheet? a. Long-term Debt, $50,000 b.
Long-term Debt, $40,000 c. Long-term Debt, $30,000; Long-term
Debt due within one year, $10,000 d. Long-term Debt of $40,000;
Long-term Debt due within one year, $10,000

11. Toran Manufacturing declared an 10% stock dividend when it had
150,000 shares of $5 par value common stock outstanding. The
market price per common share was $12 per share when the dividend
was declared. The entry to record this dividend declaration includes a
credit to a. Retained Earnings of $180,000. b. Paid-in Capital in
Excess of Par for $105,000. c. Common Stock for $180,000. d.
Retained Earnings for $75,000.

12. Richer Company paid $21,000 to buy 4,000 shares of its $6 par
value common stock for the treasury. The stock was originally sold
for $25,000. The entry to record the purchase includes a a. debit to
Treasury Stock for $21,000. b. credit to Treasury Stock for $25,000.