Question

1. An estimated loss from a loss contingency should be accrued when

a. It is probable at the date of the financial statements that a loss has been incurred and the amount of the loss can be reasonably estimated

b. The loss has been incurred by the date of the financial statements and the amount of the loss may be material

c. It is probable at the date of the financial statements that a loss has been incurred and the amount of the loss may be material

d. It is probable that a loss will be incurred in a future period and the amount of the loss can be reasonably estimated

2. The term used for bonds that are secured only by the general credit of a company is

a. Debenture bonds

b. Callable bonds

c. Indebenture bonds

d. Mortgage bonds

3. Payment of a dividend in stock

a. Decreases book value per share of stock outstanding

b. Increases total stockholders’ equity

c. Decreases the amount of working capital

d. Increases the current ratio

4. Treasury shares are

a. Issued but not outstanding shares.

b. Issued and outstanding shares.

c. Shares held as an investment of the corporation.

d. Shares held as an investment by the treasurer of the corporation.

Answer 1

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Please find below the answer

Q1 a. It is probable at the date of the financial statements that a loss has been incurred and the amount of the loss can be reasonably estimated

Q2 a. Debenture bonds

Q3 a. Decreases book value per share of stock outstanding

Q4 a. Issued but not outstanding shares.