Accounting 200 Exam 2 (ch 3,4,5,7)

Amarillo Company experienced the following events during its first accounting period. (1) Purchased $5,000 of inventory on account (2) Returned $1,000 of the inventory purchased in Event 1. (3) Paid the remaining balance in account payable within the discount period for the inventory purchased in Event 1 (4) Sold inventory purchased in Event 1 for $5,000 to customers on account At the end of the first accounting period what would be reported for net operating cash flow on the statement of cash flow? $1,000 $(4,000) $(5,000) zero

$(4,000)

Jefferson Company made a loan of $6,000 to one of the company's employees on April 1, Year 1. The one-year note carried a 6% rate of interest. The amount of cash flow from operating activities that Jefferson would report in Year 1 and Year 2, respectively would be $360 and $0 $0 and $360 $270 and $90 $90 and $270

$0 and $360

Amarillo Company experienced the following events during its first accounting period. (1) Purchased $5,000 of inventory on account (2) Returned $1,000 of the inventory purchased in Event 1. (3) Paid the remaining balance in account payable within the discount period for the inventory purchased in Event 1 (4) Sold inventory purchased in Event 1 for $5,000 to customers on account. At the end of the first accounting period what would be reported on the income statement for net income? $1,000 $4,000 $5,000 zero

$1,000

On September 1, Year 1, Western Company loaned $36,000 cash to Eastern Company. The one-year note carried a 5% rate of interest. The amount of interest revenue on the income statement and the amount of cash flow from operating activities shown on Western's Year 2 financial statements would be $600 interest revenue and $1,800 cash inflow from operating activities. $1,200 interest revenue and $1,800 cash inflow from operating activities. Correct $600 interest revenue and zero cash inflow from operating activities. $1,200 interest revenue and zero cash inflow from operating activities.

$1,200 interest revenue and $1,800 cash inflow from operating activities.

At the beginning of Year 3 Omega Company had a $52,000 balance in its accounts receivable account and a $1,400 balance in allowance for doubtful accounts. During Year 3, Omega experienced the following events. (1) Omega earned $220,000 of revenue on account. (2) Collected $230,000 cash from accounts receivable. (3) Wrote-off $1,000 of accounts receivable as uncollectible. Omega estimates uncollectible accounts to be 4% of receivables. Based on this information, the amount of uncollectible accounts expense shown on the Year 3 income statement is $1,240 $2,040 $1,000 $1,640

$1,240

At the beginning of Year 3 Omega Company had a $52,000 balance in its accounts receivable account and a $1,400 balance in allowance for doubtful accounts. During Year 3 Omega experienced the following events. (1) Omega earned $220,000 of revenue on account. (2) Collected $230,000 cash from accounts receivable. (3) Wrote-off $1,000 of accounts receivable as uncollectible. Omega estimates uncollectible accounts to be 4% of receivables. The December 31, Year 3 ending balance in the allowance for doubtful accounts account (balance after expense recognition) is $1,240 $2,040 $1,000 $1,640

$1,640

On December 31, Year 3, Alpha Company had an ending balance of $200,000 in its accounts receivable account and an unadjusted (current) balance in its allowance for doubtful accounts account of $300. Alpha estimates uncollectible accounts expense to be 1% of receivables. Based on this information, the amount of uncollectible accounts expense shown on the Year 3 income statement is $2,300 $2,200 $1,700 $2,000

$1,700

Walter Company's multistep income statement shows cost of goods sold of $60,000, a gross margin of $42,000, operating income of $12,000 and a $20,000 loss on the sale of land. Based on this information the sales revenue amounted to $72,000 $60,000 $122,000 $102,000

$102,000

During year 2, Omark Company sold merchandise costing $120,000 for $160,000. Customers returned 10% of the merchandise and a 2% cash discount was provided on $90,000 of the sales. Based on this information the amount of net sales is $144,000 $145,800 $142,200 $160,000

$142,200

an analysis of the inventory owned by Owens company as of the company's fiscal closing date is shown in the following table item quantity cost per unit market value A 200 $20 $17 B 190 $50 $52 C 400 $34 $30 D 320 $25 $29 Assuming owens applies the lower of cost or market rule on an individual basis, the company would be required to recognize an expense amounting to $1,660 $2,200 $3,860 $540

$2,200

DeKalb Company made a loan of $6,000 to one of the company's employees on April 1, Year 1. The one-year note carried a 6% rate of interest. The amount of interest revenue that DeKalb would report in Year 1 and Year 2, respectively would be $360 and $0 $0 and $360 $270 and $90 $90 and $270

$270 and $90

Weiss Company purchased two identical inventory items. The first purchase cost $30 and the second cost $32. The Company sold one of the items for $40. If the Company uses the LIFO cost flow method, the balance in the inventory account after the sales transaction will be $32 $31 $30 $8

$30

On October 1 of year 1, Zeta Company collected $1,200 cash for services to be provided for one year beginning immediately. The company's fiscal closing date is December 31. Based on this information, the amount of revenue appearing on the Year 1, income statement would be $300 $1,200 $800 $900

$300

Sales on account amounted to $80,000. Sales returns were $2,000 and sales discounts were $1,000. Cost of goods sold amounted to $45,000. Based on this information, the amount of gross margin was $33,000 $48,000 $42,000 $32,000

$32,000

an analysis of the inventory owned by Owens company as of the company's fiscal closing date is shown in the following table item quantity cost per unit market value A 200 $20 $17 B 190 $50 $52 C 400 $34 $30 D 320 $25 $29 Assuming owens applies the lower of cost or market rule on an individual basis, the amount of inventory shown on the balance sheet would be $32,900 $35,100 $34,560 $33,540

$32,900

At the beginning of Year 3 Omega Company had a $52,000 balance in its accounts receivable account and a $1,400 balance in allowance for doubtful accounts. During Year 3 Omega experienced the following events. (1) Omega earned $220,000 of revenue on account. (2) Collected $230,000 cash from accounts receivable. (3) Wrote-off $1,000 of accounts receivable as uncollectible. Omega estimates uncollectible accounts to be 4% of receivables. Based on this information, the amount of net realizable value of receivables shown on the Year 3 balance sheet is $39,360 $41,000 $42,640 $43,000

$39,360

Amarillo Company experienced the following events during its first accounting period. (1) Purchased $5,000 of inventory on account under terms 1/10/n30 (2) Returned 1,000 of the inventory purchased in Event 1. (3) Paid the remaining balance in account payable within the discount period for the inventory purchased in Event 1 Immediately after the three events have been recognized, the balance in the inventory account is $1,000 $4,000 $5,000 zero

$4,000

At the end of the accounting period Anderson company had $4,500 in accounts receivable and $500 in its allowance for doubtful accounts account. Based on this info the Net realizable value of the accounts receivable is $4,000 $4,500 $5,000 answer cannot be determined

$4,000the re

At the beginning of Year 3 Omega Company had a $52,000 balance in its accounts receivable account and a $1,400 balance in allowance for doubtful accounts. During Year 3 Omega experienced the following events. (1) Omega earned $220,000 of revenue on account. (2) Collected $230,000 cash from accounts receivable. (3) Wrote-off $1,000 of accounts receivable as uncollectible. Omega estimates uncollectible accounts to be 4% of receivables. The December 31, Year 3 unadjusted (current) balance in the allowance for doubtful accounts account (balance before expense recognition) is $400 $2,040 $2,400 $1,640

$400

At the beginning of Year 3 Omega Company had a $52,000 balance in its accounts receivable account and a $1,400 balance in allowance for doubtful accounts. During Year 3, Omega experienced the following events. (1) Omega earned $220,000 of revenue on account. (2) Collected $230,000 cash from accounts receivable. (3) Wrote-off $1,000 of accounts receivable as uncollectible. Omega estimates uncollectible accounts to be 4% of receivables. Based on this information, the December 31, Year 3 balance in the accounts receivable account is $41,000 $40,000 $52,000 none of the answers

$41,000

Keisha Dress Shops experienced the following events during its third accounting period. (1) Sold merchandise that cost $92,000 for $140,000 cash. (2) Paid $30,000 of operating expenses. (3) Paid a $4,000 cash dividend. Based on this information, the amount of the gross margin is $48,000 $18,000 $14,000 none of the answers are correct

$48,000

On August 1 of year 1, Presco Enterprises paid $1,200 cash for an insurance policy that would provide protection for a one year term. The company's fiscal closing date is December 31. Based on this information, the amount of insurance expense appearing on the year 1, income statement would be $700 $1,200 $900 $500

$500

On September 1, Year 1, Western Company loaned $36,000 cash to Eastern Company. The one-year note carried a 5% rate of interest. The amount of interest revenue on the income statement and the amount of cash flow from operating activities shown on Western's December 31, Year 1, financial statements would be $600 interest revenue and $1,800 cash flow from operating activities. $1,200 interest revenue and $1,800 cash flow from operating activities. $600 interest revenue and zero cash flow from operating activities. $1,200 interest revenue and zero cash flow from operating activities.

$600 interest revenue and zero cash flow from operating activities.

Knoll Company started Year 2 with a $500 balance in its Cash account, a $500 balance in its Supplies account and a $1,000 balance in its common stock account. During Year 2 the company experienced the following events. (1) Paid $400 cash to purchase supplies (2) Physical count revealed $100 of supplies on hand at the end of Year 2 Based on this information the amount of supplies expense reported on the Year 2 income statement is $100 $800 $900 $400

$800

Weiss Company purchased two identical inventory items. The first purchase cost $30 and the second cost $32. The Company sold one of the items for $40. If the Company uses the weighted average cost flow method, the amount of gross margin shown on the income statement will be $12 $8 $10 $9

$9

Escrow Company's multistep income statement shows cost of goods sold of $60,000, a gross margin of $42,000, operating income of $12,000 and a $20,000 loss on the sale of land. Based on this information, the net income or (net loss) amounted to $12,000 ($20,000) ($8,000) none of the answers

($8,000)

On November 1 of Year 1, Falloch Inc. paid $2,400 cash for a contract allowing the company to use office space for one year. This company's fiscal closing date is December 31. Based on this information, the amount of cash flow from operating activities appearing on the year 1 statement of cash flows would be (1,200) (400) (2,400) (2,000)

(2,400)

Which of the following shows how the event "collected cash for services to be rendered in the future" affects a company's financial statements? A= L + SE rev - exp = NI cash flow + + na na na na +oa A= L + SE rev - exp = NI cash flow + + na na na na na A= L + SE rev - exp = NI cash flow + + na na + - +oa A= L + SE rev - exp = NI cash flow + na + na na na +oa

A= L + SE rev - exp = NI cash flow + + na na na na +oa

On October 1 of year 1, Wilburn company paid cash for an insurance policy that would provide protection for a one year term. Which of the following shows how the required adjusting entry on December 31, year 1, will affect Wilburn's financial statements? A= L + SE rev - exp = NI cash flow na na na + - - -oa A= L + SE rev - exp = NI cash flow na na na na na na na A= L + SE rev - exp = NI cash flow - na - na na na -oa A= L + SE rev - exp = NI cash flow - na - na + - na

A= L + SE rev - exp = NI cash flow - na - na + - na

which of the following shows how adjusting the accounts to recognize supplies expense will affect a company's financial statements? A= L + SE rev - exp = NI cash flow - na - na + - +oa A= L + SE rev - exp = NI cash flow - na - na + - -oa A= L + SE rev - exp = NI cash flow - - na na + - na A= L + SE rev - exp = NI cash flow - na - na + - na

A= L + SE rev - exp = NI cash flow - na - na + - na

Which of the following shows how the adjusting entry to recognize services provided to a client who paid for the services prior to the work being performed? A= L + SE rev - exp = NI cash flow + na + + na + na A= L + SE rev - exp = NI cash flow na - + + na + +oa A= L + SE rev - exp = NI cash flow - - na + na + na A= L + SE rev - exp = NI cash flow na - + + na + na

A= L + SE rev - exp = NI cash flow na - + + na + na

which of the following shoes how paying cash to purchase supplies will affect a company's financial statements? A= L + SE rev - exp = NI cash flow - na - na + - na A= L + SE rev - exp = NI cash flow na na na na na na na A= L + SE rev - exp = NI cash flow - na - na na na -oa A= L + SE rev - exp = NI cash flow na na na na na na -oa

A= L + SE rev - exp = NI cash flow na na na na na na -oa

which of the following shows how paying cash for an insurance policy that protects the company for some future time period affect a company's financial statements? A= L + SE rev - exp = NI cash flow na na na na na na -oa A= L + SE rev - exp = NI cash flow na na na na na na -ia A= L + SE rev - exp = NI cash flow na na na na + - -oa A= L + SE rev - exp = NI cash flow - na - na na na -oa

A= L + SE rev - exp = NI cash flow na na na na na na -oa

Barron Company accepts a credit card as payment for $1,200 of services provided to a customer. The credit card company charges a 5% handling fee for its collection services. Select the answer that shows how the entry to recognize the event would affect Barron's financial statements. Assets will increase by $1,140. Revenue will increase by $1,200. Expenses will increase by $60. All of the answers describe effects that will occur as a result of recognizing this event.

All of the answers describe effects that will occur as a result of recognizing this event.

Which of the following is a cost of selling merchandise on account? Uncollectible accounts expense Determining customers credit worthiness Recording keeping and collection costs All of the answers describe reasons companies accept credit cards from their customers.

All of the answers describe reasons companies accept credit cards from their customers.

Weiss Company purchased two identical inventory items. The first purchase cost $30 and the second cost $32. The Company sold one of the items for $40, and it expensed $30 to its COGS account. Based on this information, which of the following cost of flow methods is the company using? FIFO LIFO weighted average NIFO

FIFO

Which of the following cost flow methods would provide the lowest amount of let income in an inflationary environment? FIFO LIFO weighted average NIFO

LIFO

Zane Enterprises accepts a credit card as payment for $500 of services provided to a customer. The credit card company charges a 4% handling charge for its collection services. Based on this information Zane will collect $500 cash from the credit card company. Zane will pay the credit card company $500 cash. Zane will collect $480 cash from the credit card company. Correct Zane will pay the credit card company $480 cash.

Zane will collect $480 cash from the credit card company.

which of the following financial statements will be affected by a sales return? Assume the original sale and the sales return were cash transactions. balance sheet income statement statement of cash flows all of the above

all of the above

Lawyers Inc. accepted a $12,000 retainer for which the company agreed to provide services in the future. Recognizing this event would defer the recognition of revenue cause the company's assets to increase cause the company's liabilities to increase all of the answers are correct

all of the answers are correct

inventory is an asset account that appears on the balance sheet an expense account that appears on the income statement a cash item that appears on the statement of cash flows not an account, but an information item

an asset account that appears on the balance sheet

paying cash to purchase inventory is an asset source transaction an asset use transaction an asset exchange transaction a claims exchange transaction

an asset exchange transaction

Amarillo Company experienced the following events during its first accounting period. (1) Purchased $5,000 of inventory on account (2) Returned $50 of the inventory purchased in Event 1. (3) Sold the inventory for $6,000 Based on this information, which of the following shows how the recognition of the return will affect the company's financial statements? Assets (50) Liabilities (50) Assets (50) Liabilities (50) Expenses 50 Net income (50) Assets (50) Liabilities (50) cash flows 50 cash flows 50

assets (50) liabilities (50)

a deferral a. exists when a company receives cash after recognizing the associated revenue b. exists when a company receives cash before recognizing the associated revenue c. exists when a company receives cash at the time of the associated revenue is recognized

b

AmRon Company sold land that had cost $25,000 for $26,500. Based on this information, the company's year-end financial statements would show a. a cash inflow from operating activities of $1,500 on the statement of cash flows b. a gain of $26,500 on the income statement c. a cash inflow from investing activities of $26,500 on the statement of cash flows d. a balance of $25,000 in the cash account on the balance sheet

c

the amount of net sales is determined by which of the following formulas? a. gross sales + sales returns and allowances -sales discounts b. gross sales + sales returns and allowances + sales discounts c. gross sales - sales returns and allowances - sales discounts d. gross sales - sales returns and allowances + sales discounts

c

Which of the following statements is false? a. prepaid insurance is a deferred expense b. prepaid insurance represents a future economic benefit c. prepaid insurance is shown on the income statement d. prepaid insurance indicates that a company has already paid cash for insurance coverage that protects the company for some future time period

c. prepaid insurance is shown on the income statement

Baltimore Company paid $3,600 cash for the right to use office space during the coming year. Which of the following shows how this event would affect Baltimore's ledger accounts? cash (3,600) prepaid rent 3,600 prepaid rent 3,600 accounts payable 3,600 prepaid rent 3,600 retained earnings 3,600 prepaid rent (3,600) retained earnings (3,600)

cash (3,600) Prepaid rent 3,600

Taha Company purchased $8,000 of inventory under terms FOB destination point. Freight cost amounted to $200. The cost of inventory and freight were paid with cash. Which of the following shows how the recognition of this purchase, including freight costs if applicable, will affect Taha's financial statements? cash (8,200) Inventory 8,200 expenses 8,200 net income (8,200) cash (8,200) inventory 8,200 cash flows (8,200) oa cash (8,000) inventory 8,000 expenses 200 net income (200) Cash flows (8,200) oa cash (8,000) inventory 8,000 cash flows (8,000) oa

cash (8,000) inventory 8,000 cash flows (8,000) oa

Taha Company purchased $8,000 of inventory under terms FOB shipping point. Freight cost amounted to $200. The cost of inventory and freight were paid with cash. Which of the following shows how the recognition of this purchase, including freight costs if applicable, will affect Taha's financial statements? cash (8,000) inventory 8,000 cash (8,200) inventory 8,200 expenses 8,200 net income (8,200) cash (8,200) inventory 8,200 cash flows (8,200) oa cash (8,000) Inventory 8,000 expenses 200 net income (200) cash flows (8,200) oa

cash (8,200) inventory 8,200 cash flows (8,200) oaTaha

Beachwood Clothing Company operates a chain of high end men's clothing stores. Recently the Company closed one of its stores and sold the equipment that was used in the store. The equipment had cost $5,000 and was sold for $6,000. Which of the following shows how the recognition of this event would affect the Company's financial statements?

cash 6,000 equipment (5,000) equity 1,000 gain 1,000 net income 1,000 6,000 IA

AAA Consulting Services collected $6,000 cash for services to be provided in the future. Which of the following shows how recognizing the cash receipt will affect the company's ledger accounts? cash 6,000 unearned rev 6,000 unearned rev 6,000 retained earnings (6,000) cash 6,000 retained earnings 6,000 unearned rev (6,000) retained earnings 6,000

cash 6,000 unearned rev 6,000

Contours, Inc. sold merchandise that cost $6,000 to a customer on account for $9,000 under terms 2/10, n/30. Customers returned merchandise that had been sold for $1,000. This merchandise had originally cost Contours $700. The remaining receivables were collected after the discount period had expired. Which of the following shows how recognizing the collection of the receivables will affect a company's financial statements? cash 8,000 a/r (8,000) net sales 8,000 net income 8,000 cash flow 8,000 oa cash 8,000 a/r (8,000) cash 7,840 a/r (7,840) cash flow 7,840 oa cash 8,000 a/r (8,000) cash flow 8,000 oa

cash 8,000 a/r (8,000) cash flow 8,000 oa

Amarillo Company experienced the following events during its first accounting period. (1) Purchased $5,000 of inventory for cash (2) Returned $100 of the inventory purchased in Event 1. Based on this information, which of the following shows how the recognition of the return will affect the company's financial statements? assets (100) liabilities (100) assets (100) liabilities (100) expenses 100 net income (100) assets (100) liabilities (100) cash flows 100 cash flows 100 oa

cash flows 100 oa

assume a company paid $800 for a computer that it plans to sell to its customers. Suppose that because of new technology the company could buy the same computer today for $600. How could the lower-of-cost of market rule affect the financial statements? decrease the net income on the income statement decrease common stock reported on the balance sheet increase liabilities on the balance sheet Increase SE on the balance sheet

decrease net income on the income statement

When a company purchases prepaid rent, it will never recognize rent expense recognizes rent expense immediately defers recognition of rent expense

defers recognition of rent expense

the gross margin percentage is determined by dividing net sales by the gross margin dividing the gross margin by the net sales dividing the gross margin by the COGS dividing the COGS by the gross margin

diving the gross margin by the net sales

GAAP requires that inventory be shown on the balance sheet at its cost (price paid) regardless of its current value. This statement is true/false

false

McDonald's will recognize a gain if it generates an amount of revenue that is higher than its operating expenses. This statement is true/false

false

Recognizing a sales discount will cause the amount of net sales to increase. This statement is true/false

false

most companies expect to collect the full balance of all their accounts receivable. this statement is true/false

false

product costs are expensed when they are incurred. true/false

false

the amount of net income shown on a multistep income statement will differ from the amount of net income shown on a single-step income statement. this statement is true/false

false

Smith Co. sold inventory that cost $5,000 for $9,000 cash. Freight cost was $600 paid in cash. Freight terms were FIB shipping point. Based on this Information, gross margin would be $4,000 net income would be $3,400 Gross margin would be $3,400 none of the answers

gross margin would be $4,000

The adjusting entry to recognize the write down of inventory based on the lower-of-cost-or-market rule will decrease the amount of liabilities decrease the cash flow from OA increase the amount of expenses increase the amount of assets

increase the amount of expenses

On May 1 of year 1, Matthew company paid $2,400 cash for an insurance policy that would protect the company for one year. The company's fiscal closing date is December 31. Based on this information, the amount of insurance expense and the cash flow from operating activities shown on the year 1, financial statements would be insurance exp 1,600 cash flow (800) insurance exp 2,400 cash flow (1,600) insurance exp 1,600 cash flow 800 insurance exp 1,600 cash flow (2,400)

insurance exp 1,600 cash flow (2,400)

which of the following events experienced by a department store would be presented in the operating section of a multistep income statement? inventory sold for less than its cost equipment sold for more than its cost land sold for less than its costs all of the above are reported within op income

inventory sold for less than its cost

when a company purchases supplies on account total assets decrease expense increases cash flow from investing activities increases liabilities increase

liabilities increase

the gross margin appears on a single-step income statement multistep income statement single-step statement of cash flows multistep statement of cash flows

multistep income statement

Smith Co. purchased inventory for $5,000 on account with the freight terms FOB destination. Smith Co. then sold the inventory to customers for $8,000 cash with freight terms FOB shipping point. In both cases, the freight carrier charged $600 for shipping. Based on this information gross margin would be $2,400 net income would be $3,000 net income would be $1,800 none of the answers

net income would be $3,000

Smith Co. sold inventory that cost $5,000 for $9,000 cash. Freight cost was $600 paid in cash. The freight terms were FOB destination. Based on this information, gross margin would be $3,400 net income would be $3,400 net income would be $4,000 none of the answers

net income would be $3,400

When a merchandising company pays cash to purchase inventory the amount of total assets increases the amount of expenses increases the amount of total assets decreases none of the above

none of the above

the recovery and collection of an account receivable that had previously been written off will increase total assets decrease total assets not affect total assets not affect cash flow

not affect total assets

Which of the following shows the effects of purchasing inventory on account? A= L + SE rev - exp = NI cash flow A. + + na na + - na B. + na + na na na +oa C. + + na na na na na D. + + na na na na +oa

option C

Edwards Shoe Store sold shoes that cost the company $5,700 for $8,200. Which of the following shows how the recognition of the cost of goods sold will affect the Company's financial statement? (Ignore the effects of the associated revenue recognition.) A= L + SE rev - exp = NI cash flow a. - na - na + - -oa b. - na - na na na na c. + na + + na + +oa d. - na - na + - na

option d

Bookmyer Company experienced a business event that affected its financial statements as indicated below. A= L + SE rev - exp = NI cash flow na na na na na na -oa which of the following events could have caused these effects? paid cash to purchase supplies paid cash to reduce supplies payable purchased supplies on account recognized supplies expense

paid cash to purchase supplies

On October 1 of Year 1, Lesikar Company paid $1,200 cash for an insurance policy that would provide protection for a one year term. Which of the following shows how the required adjustment on December 31, Year 1, would affect Lesikar's ledger accounts? prepaid insurance (300) retained earnings (300) prepaid insurance 1,200 retained earnings (1,200) prepaid insurance (900) retained earnings (900) cash (1,200) prepaid insurance 1,200 prepaid insurance 3,600 accounts payable 3,600

prepaid insurance (300) retained earnings (300)

On June of year 1, Doe company paid $1,800 cash for an insurance policy that would protect the company for one year. The fiscal closing date is December 31. Based on this information alone, the amount of prepaid insurance and insurance expense shown on the year 2 financial statements would be prepaid insurance 750 insurance exp 1,050 prepaid insurance 1,050 insurance exp 750 prepaid insurance zero insurance exp 1,800 prepaid insurance zero insurance exp 750

prepaid insurance zero insurance exp 750

When a merchandising company sells inventory it will recognize only as an expense recognize only revenue recognize revenue and expense not recognize revenue or expense

recognize inventory and expense

Bookmyer Company experienced a business event that affected its financial statements as indicated below. A= L+ SE Rev-Exp=NI cash flow - na - na - - na Which of the following events could have caused the effects? Paid cash to reduce supplies payable Paid cash to purchase supplies purchased supplies on account recognized supplies expense

recognized supplies expense

On May 1 of year 1, Matthew company collected $2,400 cash for services to be provided for one year beginning immediately. The company's fiscal closing date is December 31. Based on this information, the amount of service revenue and the cash flow from operating activities shown on the Year 1 financial statements would be service rev 1,600 cash flow 800 service rev 2,400 cash flow 1,600 service rev 2,400 cash flow 800 service rev 1,600 cash flow 2,400

service rev 1,600 cash flow 2,400

Delta Company started Year 2 with a $1,700 balance in its Cash account, a $700 balance in its Supplies account and a $2,400 balance in its Common Stock account. During Year 2 the company experienced the following events. (1) Paid $1,600 cash to purchase supplies. (2) Physical count revealed $400 of supplies on hand at the end of Year 2. Based on this information, which of the following show how the year end adjusting entry required to recognize supplies expense would affect Delta's account balances? supplies 1,900 accounts payable 1,900 cash (1,600) supplies 1,600 supplies (1,900) retained earnings (1,900) supplies (1,600) retained earnings (1,600)

supplies (1,900) retained earnings (1,900)

Howard Company purchased $300 of supplies on account. Which of the following shows how is purchase will affect Howard's financial statements? accounts payable 300 retained earnings (300) supplies 300 accounts payable 300 cash (300) supplies 300 supplies (300) retained earnings (300)

supplies 300 accounts payable 300

Zack's, Inc. sold land that cost $85,000 for $70,000 cash. As a result of this event total assets increased total assets were not affected total assets and liabilities increased total assets decreased

total assets decreased

A company will earn more profit from a cash sale than from a credit card sale. true/false

true

A cost may be recorded as an expense or as an asset purchase. This statement is true/false

true

Cash revenue generated from notes receivable appears in the operating activities section of the statement of cash flows but as a non-operating item on the income statement. true/false

true

Common size statements are presented as percentages to promote comparisons between different size companies. This statement is true/false

true

Many retail companies are motivated to incur credit costs because many customers are emotional buyers and offering credit generally leads to increases in sales revenue. This statement is true/false

true

The balance in the allowance for doubtful accounts provides an estimate of the amount of accounts receivable that is expected to be uncollectible. This statement is true/false

true

The cash flow associated with buying and selling inventory is not affected by the inventory cost flow method. this statement is true/false

true

accrued interest revenue will appear on the income statement but not on the statement of cash flows true/false

true

net realizable value of accounts receivable represents an estimate of the amount of the accounts receivable that a company realistically expects to collect. this statement is true/false

true

Underwood Company's gross margin percentage increased from 40% to 45%. Which of the following is not a possible explanation for this increase, assuming all other things being equal? underwood raised its per unit sales price underwood's supplier lowered its per unit price underwood sold more products underwood started taking advantage of purchase discounts

underwood sold more products

On August 1 of year 1, Accounting Associates collected $1,200 cash for consulting services to be provided for one year beginning immediately. Based on this information, which of the following show how the required readjustment on December 31, year 1, would affect their ledger accounts? unearned rev 700 retained earnings (700) unearned rev (500) retained earnings 500 unearned rev (700) retained earnings 700 unearned rev 500 retained earnings (500)

unearned rev (500) retained earnings 500

On June 1 year 1, Zoe company collected $1,800 cash for medical services to be provided for one year beginning immediately. The company's fiscal closing date is december 31. Based on this information the amount of unearned revenue and service revenue shown on the year 1 financial statements would be unearned rev 1,050 service rev 750 unearned rev 750 service rev 1,050 unearned rev zero service rev 1,800 unearned rev 1,800 service rev zero

unearned rev 750 service rev 1,050

On August 1 of year 1, Accounting Associates collected $1,200 cash for consulting services to be provided for one year beginning immediately. the company's fiscal closing date is December 31. Based on this information, the amount of unearned revenue appearing on the december 31 year 2 balance sheet would be $700 $500 zero $1,200

zero