EBK ACCOUNTING PRINCIPLES
13th Edition
ISBN: 9781119411017
Author: Weygandt
Publisher: WILEY
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. These are decreases in economic benefits during the accounting period in the form of outflows or
depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating
to distributions to equity participants.
a. Liabilities
b. Expense
c. Loss
d. Cost
Is unrealized loss deducted in marketable equity securities held as financial asset at fair value through other comprehensive income?
The account Unrealized Gain (Loss) on Trading Investments should be included on the
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- Which of the following would trigger a subtraction in the indirect operating section? A. gain on sale of investments B. depreciation expense C. decrease in accounts receivable D. decrease in bonds payablearrow_forwardWhen the market value of a companys available-for-sale securities is lower than its cost, the difference should be: a. shown as a liability. b. shown as a valuation allowance added to the historical cost of the investments. c. shown as a valuation allowance subtracted from the historical cost of the investments. d. No entry is made, the securities are shown at historical cost.arrow_forwardA restriction on retained earningsa. Reduces retained earnings available for the declaration of dividends. b. Can be reported by an entry appropriating retained earnings. c. Has no effect on total retained earnings. d. All of the choices are correct.arrow_forward
- Which of the statements below is false? If the net income of prior period is overstated because of the change in accounting policy, the effect is (A) deducted from the beginning retained earnings. Prior period errors are shown as adjustment of the ending balance of retained earnings. If the net income of (B) the prior period is overstated, the amount of the error uis deducted from retained earnings. Equity is also the net assets. In the conversion of preference chares into ordinary shares, if the total par or stated value of the ordinary D shares is more than the original issue of the preference shares, the difference is charged to retained earnings.arrow_forwardWHICH STATEMENT IS FALSE?A. If the net income of prior period is overstated because of the change in accounting policy, the effect is deducted from the beginning retained earnings.B. Equity is also the net assets.C. Prior period errors are shown as adjustment of the ending balance of retained earnings. If the net income of the prior period is overstated, the amount of the error uis deducted from retained earnings.D. In the conversion of preference chares into ordinary shares, if the total par or stated value of the ordinary shares is more than the original issue of the preference shares, the difference is charged to retained earnings.arrow_forwardDirections: Please select the appropriate answer on the statement below;B - If the statement is trueS - When the statement is false or part of the statement is false Equity is the residual interest in the company's assets after deducting all liabilitiesarrow_forward
- Which of the following regarding retained earnings is false?a. Retained earnings is increased by net income.b. Retained earnings is a component of stockholders’equity on the balance sheet.c. Retained earnings is an asset on the balance sheet.d. Retained earnings represents earnings not distributed tostockholders in the form of dividendsarrow_forwardReported earnings become overstated as a result of failure to record which of the following: a. the amortization of premium on bonds payable b. a contingent liability c. the dividends in arrears on the outstanding d. an accrued liabilityarrow_forwardWhen using the allowance method, failure to record bad debt expense would have what effect on the accounting equation?: Assets Liabilities Stockholder's Equity A. No Effect No Effect No Effect В. Overstated No Effect Overstated С. Understated No Effect Understated D. Overstated Overstated Overstated Е. No Effect Understated Overstated Which of the following statements is FALSE?arrow_forward
- 4. Which of the following items will appear in the statement of changes in equity? a. Extraordinary loss b. Write-off of goodwill c. Transaction instruments d. Transaction costs directly related to issuance of equity instruments costs directly related to issuance of debtarrow_forwardThe statement of shareholders' equity reports the effects from the recognition or valuation of certain asset or liability transactions that change Accumulated Other Comprehensive Income. True Falsearrow_forwardWhen total sharcholders' equity has a negative balance, it is described in financial statement as O loss O capital deficiency liabilityarrow_forward
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