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Series 86 General Missed Questions and answers verified 2024
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Series 86 General Missed Questions and answers verified 2024
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Series 86 General Missed QuestionsAccounting for stock dividends requires an adjustment to:
The common stock account (based on par value), additional paid-in capital
(for the market value in excess of par), and retained earnings.
Accounting for stock dividends requires an adjustment to additional paid-in
capital by...
Increasing it by the market value in excess of par:
Ex. Par : $1
Common stock price $25
Stock dividend: 5%
Shares outstanding: 5,000,000
1.) 5,000,000 * .05 = 250,000
2.) $25 - $1 = $24
3.) 24 * 250,000 = $6,000,000
The quick asset ratio:
Is a stringent liquidity measurement
, Is used primarily to evaluate solvency
Does not include work-in-progress inventory, but does include finished
inventory
Would include accounts receivable in the liquid asset category
Is a stringent liquidity measurement
Would include accounts receivable in the liquid asset category
The quick asset ratio is a stringent method of computing liquidity. Cash,
marketable securities, and accounts receivables are divided by current
liabilities. Inventory is not included. This is not a measurement of solvency,
which is the company's long-term ability to stay in business.
Revenue recognition under the percentage-of-completion method recognizes
revenues and expenses:
In proportion to the work completed
As a percentage of the work to be completed
On the basis of work certified
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