1. The bank collected a note receivable of $1,000. How would this information be included on the bank reconciliation?
An addition on the bank side
A deduction on the book side
An addition on the book side
A deduction on the bank side
2. If an investor company buys stocks in another company to hold for investment (representing less than 20% of the investee stock and they do not plan to sell the stocks in the near future, that investment would be classified as a(n):
trading equity investment.
available-for-sale debt investment.
available-for-sale equity investment.
held-to-maturity debt investment.
3. Which of the following depreciation methods does NOT use a residual value in the depreciation formula?
Units-of-production
Double-declining-balance
Straight-line
First-In, First-Out
4. The mark-to-market method means:
trading investments are carried at original cost on the balance sheet.
trading investments are carried at current market value on the balance sheet.
trading investments are carried as long-term assets on the balance sheet.
trading investments are carried at discounted values on the balance sheet .
5. Which of the following requires that financial statements should report the LEAST favorable figures?
Accounting conservatism
Materiality concept
Disclosure principle
Consistency principle