45The bookkeeper prepared a check for S58 but accidentally recorded it as S85, w

Question

45The bookkeeper prepared a check for S58 but accidentally recorded it as S85, when preparing the bank reconciliation, this should be corrected by: A) Adding $27 to the bank balance. B) Subtracting $27 from the bank balance. C) Adding $27 to the book balance. D) Subtracting $27 from the book balance 46·The valuation of assets in the balance sheet is based primarily upon: What it would cost to replace the assets. Cost, because cost is usually factual and verifiable. Current fair market value as established by independent appraisers. Cost, because in the event of liquidation, the assets would be sold at an amount equal to their original cost. A) B) C) D) 47·The primary function of external auditors is to: Express an opinion on the fairness and reliability of the company's financial statements. Determine the accuracy of the management reports. Evaluate the efficiency of operations and the degree of compliance with management's policies in all departments within a large organization. Determine that financial statements and all special reports to management are A) B) C) D) pre in conformity with generally accepted accounting principles. 48, Hickory Corporation issued 400,000 shares of $2 par value capital stock at it's date of incorporation for cash at a price of $8 per share. During the first year of operations, the company earned $80,000 and declared a dividend of $20,000. At the end of this first year of operations, the A) $3,200,000. B) $3,280,000. C) S 800,000. D) $3,260,000 balance of the Common Stock account is: 49. When a corporation issues capital stock at a price higher than the par values amount received over par value increases retained earnings. A) B) C) The The entire issue price is credited to the Capital Stock account. The amount received in excess of par value constitutes profit to the issuing corporation. The amount received in excess of par value becomes part of paid-in capital D)

Explanation / Answer

45. Ans C Adding $27 to the book balance

46. Ans B Cost, because cost is usually factual and verifiable

47. Ans A Express an opinion on the fairness and reliability of the companies financial statements.

48. Ans C 800000 (400000*2)

49. Ans D The amount received in excess of par value becomes part of paid-in capital

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