acct 5312 exam 2 Latest Update 2026-2027 Exam 50
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"Noncontrolling interest":
Multiple Choice
is a component of the parent company's net income and reported on the income statement.
is a component of stockholders' equity attributable to the parent company and reported on the
balance sheet.
is the portion of equity in a subsidiary not attributable, directly or indirectly, to the parent
company, and reported on the balance sheet within equity, but separate from the parent
company's equity.
is not reported within the parent company's consolidated financial statements, but instead
reported within the minority stockholders' financial statements. - CORRECT ANSWER: is the
portion of equity in a subsidiary not attributable, directly or indirectly, to the parent company,
and reported on the balance sheet within equity, but separate from the parent company's equity.
1. A company makes the payment of a one-year insurance premium of $3,240 on April 1, 2022.
2. Prepare the adjusting entry that will be made at the end of every month to show the amount of
insurance premium "used" that month.
3. Calculate the amount of prepaid insurance that should be reported on the December 31, 2022,
balance sheet with respect to this policy.
4. If the premium had been $6,480 for a two-year period, how should the prepaid amount at
December 31, 2022, be reported on the balance sheet? - CORRECT ANSWER: 1. Prepaid
insurance: Debit 3,240
Cash: Credit 3,240
2. Insurance Expense: Debt 270
Prepaid Expense: Credit 270
3. Prepaid Insurance: (3240 * 3/12) = 810
, 4. Non-current Asset: $810
Current Asset: $3240
A loan discount is:
a loan used to purchase a bond at a discount, based on a discounted interest rate on a loan.
the same as a bond discount.
the interest amount that is subtracted from the loan principal (and effectively prepaid) when a
loan is obtained on a discount basis.
the interest amount that is paid along with the loan principal when a loan obtained on a straight
basis is paid off on the maturity date. - CORRECT ANSWER: the interest amount that is
subtracted from the loan principal (and effectively prepaid) when a loan is obtained on a discount
basis.
A magazine publisher has an account called "Unearned Subscription Revenue." The transaction
that causes the balance of this account to decrease is:
cash is received from new subscribers.
magazines are printed for the publisher.
magazines are mailed to subscribers.
subscriptions are sold to new subscribers. - CORRECT ANSWER: magazines are mailed to
subscribers.
Agrico Incorporated accepted a 10-month, 11% (annual rate), $5,450 note from one of its
customers on July 15, 2022; interest is payable with the principal at maturity. - CORRECT
ANSWER: Interest Receiveable: Debit 274.77
Interest Revenue: Credit 274.77
Interest earned = $5,450 × 11% × 5.5 ÷ 12 = $274.77
Questions with 100% Verified Correct Answers
Guaranteed A+
"Noncontrolling interest":
Multiple Choice
is a component of the parent company's net income and reported on the income statement.
is a component of stockholders' equity attributable to the parent company and reported on the
balance sheet.
is the portion of equity in a subsidiary not attributable, directly or indirectly, to the parent
company, and reported on the balance sheet within equity, but separate from the parent
company's equity.
is not reported within the parent company's consolidated financial statements, but instead
reported within the minority stockholders' financial statements. - CORRECT ANSWER: is the
portion of equity in a subsidiary not attributable, directly or indirectly, to the parent company,
and reported on the balance sheet within equity, but separate from the parent company's equity.
1. A company makes the payment of a one-year insurance premium of $3,240 on April 1, 2022.
2. Prepare the adjusting entry that will be made at the end of every month to show the amount of
insurance premium "used" that month.
3. Calculate the amount of prepaid insurance that should be reported on the December 31, 2022,
balance sheet with respect to this policy.
4. If the premium had been $6,480 for a two-year period, how should the prepaid amount at
December 31, 2022, be reported on the balance sheet? - CORRECT ANSWER: 1. Prepaid
insurance: Debit 3,240
Cash: Credit 3,240
2. Insurance Expense: Debt 270
Prepaid Expense: Credit 270
3. Prepaid Insurance: (3240 * 3/12) = 810
, 4. Non-current Asset: $810
Current Asset: $3240
A loan discount is:
a loan used to purchase a bond at a discount, based on a discounted interest rate on a loan.
the same as a bond discount.
the interest amount that is subtracted from the loan principal (and effectively prepaid) when a
loan is obtained on a discount basis.
the interest amount that is paid along with the loan principal when a loan obtained on a straight
basis is paid off on the maturity date. - CORRECT ANSWER: the interest amount that is
subtracted from the loan principal (and effectively prepaid) when a loan is obtained on a discount
basis.
A magazine publisher has an account called "Unearned Subscription Revenue." The transaction
that causes the balance of this account to decrease is:
cash is received from new subscribers.
magazines are printed for the publisher.
magazines are mailed to subscribers.
subscriptions are sold to new subscribers. - CORRECT ANSWER: magazines are mailed to
subscribers.
Agrico Incorporated accepted a 10-month, 11% (annual rate), $5,450 note from one of its
customers on July 15, 2022; interest is payable with the principal at maturity. - CORRECT
ANSWER: Interest Receiveable: Debit 274.77
Interest Revenue: Credit 274.77
Interest earned = $5,450 × 11% × 5.5 ÷ 12 = $274.77
