Accounting exam 2

While preparing the April 30th bank reconciliation, the accountant identified the following items: Company's balance according to the general ledger: 15,000 Outstanding checks: 2,500 Bank service charge: 15 A customer's NSF check returned by the bank: 100

14,885

Cozy Corporation purchased supplies at a cost of $15,000 during the year. At January 1, supplies on hand were $5,000. At December 31, supplies on hand are $2,000. Calculate supplies expense for the year.

18,000

A company receiving payment of a $20,000 accounts receivable within 10 days with terms of 2/10, n/30, would record a sales discount of:

2% of 20,000

If the end-of-year supplies on hand totaled $200, and purchases totaled $300, and supplies on hand at the beginning of the year amounted to $100, how much will be reported as supplies expense for the current year?

200

The company received a promissory note from a customer on March 1, 2019. The principal amount of the note is $20,000; the terms are 3 months and 9% annual interest.

450

A company needs to record 6 months of accrued interest on a 4-year, 12%, $12,000 promissory note payable. How much interest expense should be accrued?

720

A customer's check for $25 that had been deposited into the company's checking account the previous month was returned stamped "NSF" by the bank. Which of the following journal entries is required?`

Accounts receivable 25 Cash 25

WHEN THE RECORDS ARE VERIFIED BY SOMEONE?

Checks on recorded accounts

WHEN A DOCUMENT LISTING OUT WHO IS IN CHARGE OF WHAT EXISTS?

Clearly defined authority and responsibility

WHICH WOULD BE ADDED TO THE BANK'S CASH BALANCE ON A BANK RECONCILIATION?

Deposits in transit

Which of the following entries properly closes a temporary account?

Income summary 400 Salaries Expense 400

The company received a promissory note from a customer on March 1, 2019. The principal amount of the note is $20,000; the terms are 3 months and 9% annual interest. At the maturity date, the customer pays the amount due for the note and interest. What entry is required on the books of Accent Flooring on the maturity date assuming that none of the interest had already been recognized?

Increase Cash by $20,450, increase Interest Revenue by $450, and decrease Notes Receivable by $20,000

WHICH WOULD BE ADDED TO THE COMPANY'S CASH BALANCE ON A BANK RECONCILIATION?

Interest earned on the bank account

WHICH WOULD BE SUBTRACTED FROM THE COMPANY'S CASH BALANCE ON A BANK RECONCILIATION?

NSF Check

Failure to record the earned portion of unearned revenue would result in which of the following?

Net income being understated.

Which of the following adjusting entries involves the cash account? Accrued Expenses, Deferred Revenues, Deferred Liabilities, NOA

None of the above

WHICH WOULD BE SUBTRACTED FROM THE BANK'S CASH BALANCE ON A BANK RECONCILIATION?

Outstanding checks

WHEN THERE ARE PASSWORDS FOR A SYSTEM?

Safeguarding of assets and records

WHEN TWO RELATED TASKS ARE GIVEN TO TWO DIFFERENT PEOPLE?

Segregation of duties

WHICH OF THE FOLLOWING ENTRIES PROPERLY CLOSES A TEMPORARY ACCOUNT?

Service Revenue 500 Income summary 500

The College Store accepts MasterCard for payments of purchases made by students. The credit card drafts are deposited directly in a bank account. MasterCard charges a 1.55% collection fee. Credit card drafts totaling $10,000 are deposited during August. Recording the sales and deposits will result in an increase in

Service charge expense for 155

The asset account, Supplies, has a balance of $10,000 on January 1. During January, $22,000 of supplies were purchased on account and the liability was appropriately recorded. A count of supplies at the end of January indicates a balance of $2,000. What adjusting entry is necessary at January 31?

Supplies expense 30,000 Supplies 30,000

Under accrual accounting when is revenue recognized?

When earned, and expenses when incurred.

Each of the following items is considered a cash equivalent except: 75-Day treasury bill, 60-day corporate commercial paper, a 30-day certificate of deposit, a 180-day note issued by a local government.

a 180 day-note issued by a local government

Which of the following items would be added to the company's cash balance on a bank reconciliation? Interested earned on the bank reconciliation, bank service charges, outstanding checks, deposits in transit

interest earned on the bank account