accounting final

June 1

A pool cleaning service signs a contract with a new customer on May 1. The pool is vacuumed and "shocked" for the customer on June 1, and the bill for the services is paid on July 1. Under the accrual basis, the business should recognize revenue on:

$2,822

A year-end review of Accounts Receivable and estimated uncollectible percentages revealed the following: 1-30 days$74,000 1.3%/31-60 days$12,300 9.0%/61-90 days$7,20019.0% Amounts over 90 days past due are written off. The credit balance in the Allowance for Doubtful Accounts was $615. The Bad Debt Expense for the year is:

maintenance costs

All of the following are included in the acquisition cost of property, plant, and equipment except:

The difference between the gross amount of accounts receivable and the net realizable value of accounts receivable

Allowance for Doubtful Accounts represents:

Proper authorizations

Allowing only certain employees to order goods and services for the company is an example of what internal control procedure?

Those necessary to ensure that cash on hand and on deposit in checking accounts is beyond the minimal amount for ongoing operations.

An internal control system consists of all the following policies and procedures except:

The costs with an unlimited life will increase Land, and the costs with a limited useful life will increase Land Improvements.

Borden Company incurred the following costs to acquire and prepare land for a new parking lot: purchase price for land, cost to clear the land, cost of paving, lighting for the parking lot, and landscaping for the parking lot. How should the company determine which costs should be recorded as Land Improvements and which cost should be recorded as Land?

$1,007

Border Company's cash account had a balance of $962 on August 31. This included a bank deposit of $87 that was in transit on the 31st. The August 31 bank statement contained the following information: Bank Statement Balance$1,089/NSF check 16/Bank Service Charge 7/Collection of notes receivable 68/ Border also had checks outstanding of $169. What is Border's adjusted cash balance at August 31?

The March 31st transaction has no effect on total assets under the accrual basis.

Fox Auto sold merchandise to a customer for $3,000 on credit on March 10. The customer paid Fox Auto the amount due on March 31. Under the accrual basis of accounting, which of the following statements is true?

increase Depreciation Expense and increase Accumulated Depreciation for $22,500.

Newco Publishing Company purchased equipment at the beginning of 2016 for $200,000. The company decided to depreciate the equipment over an 8-year period using the straight-line method. The company estimated the equipment's residual value at $20,000. The journal entry to record depreciation expense for 2016 will:

best allocates the original cost of the asset to the periods benefited by the use of the asset.

A company should choose a depreciation method that

Liabilities increase and stockholders' equity decreases.

A bill is received for electric service; the charge for the electricity is recorded, but payment will be made later. For this transaction, identify the effect on the accounting equation.

Sales made during the last week of the period are not recorded.

A company forgot to record four adjustments during 2016. Which one of the following omissions of adjustments will understate net income?

1.452

A company has the following information: Cash 16,300/AR 15,000/Prepaid rent 5,000/Property plant and equipment 54,000/AP 14,800/Wages payable 7,000/Utilities payable 3,200/3- year Notes payable 32,000/ What is the current ratio?

Products are sold to customers on credit with payment due in 30 days.

As a general rule, revenue is recognized at the point of sale. Which one of the following situations illustrates this rule?

Recognition of depreciation on plant assets

Which one of the following adjustments decreases net income for the period?

Balance sheet

Which one of the following financial statements reports an entity's financial position at a specific date?

$13,200

Benton Corporation The data below is for Benton Corporation for 2016. Accounts Receivable—January 1, 2016$334,000/Credit sales during 2016 850,000/Collections from credit customers during 2016 725,000/Customer accounts written off as uncollectible during 2016 12,000/Allowance for Doubtful Accounts [Credit Balance](After write-off of uncollectible accounts) 1,700/Estimated uncollectible accounts based on an aging analysis 13,200 Refer to the data for Benton Corporation. If the aging approach is used to estimate bad debts, what should the balance in the Allowance for Doubtful Accounts be after the bad debts adjustment?

$850,000

Birken Co. purchased a building for $850,000 in 2004. At the end of 2016, when it had a book value of $675,000, it was appraised for $2,000,000. A potential buyer offered $400,000. Birken rejected the offer. What amount should be recorded on Birken's records at the end of 2016 in the account called Buildings?

Income statement account

Which one of the following is not an accurate description of Allowance for Doubtful Accounts?

A single employee is responsible for collecting and recording of cash.

Which one of the following situations reflects a weak internal control system?

Canceled checks

Checks presented for payment and paid by the bank are known as

increase liability accounts.

Credit entries are used to

Equipment and Salaries Expense

Which pair of accounts has the same set of rules for debit and credit entries?

Supplies on Hand: $160; Accounts Payable: $200

During December, Horn Inc. purchased $800 of supplies for use in its business. At the end of December, 20% of the supplies were still on hand, but only 75% had been paid. What amounts will appear on the company's balance sheet on December 31?

through allocation to the accounting periods in which the benefits are recognized.

Expenses can be matched against revenue

Assets and owners' equity decrease.

Fenchurch Corp. uses the direct write-off method to account for bad debts. What are the effects on the accounting equation of the entry to record the write-off of a customer's account balance?

$195,000

Grove City Corp. On January 1, 2016, Grove City Corp. purchased a ship for $2,000,000. It has a ten-year useful life and a residual value of $50,000. The company uses the straight line method. What was the depreciation expense for Grove City Corp. for the year ended December 31, 2016?

a debit in Accounts Receivable for $150.

Hennigan Company Use the five transactions for Hennigan Company described below to answer the question(s) that follow(s). Dec 1 Hennigan purchases two new saws on credit at $375 each. The saws are added to Hennigan's rental inventory. Payment is due in 30 days./8Hennigan accepts advance deposits for tool Company of $75./15Hennigan receives a bill from Farmer's Electric Company for $150. Payment is due in 30 days./20Customers are charged $750 by Hennigan for tool Company. Payment is due from the customers in 30 days./31Hennigan receives $500 in payments from the customers that were billed for Company on December 20. Refer to the transactions for Hennigan Rentals. Based on the December 15 transaction, Farmer's Electric will record which of the following in its accounting records?

Net income increases retained earnings on the statement of retained earnings, which ultimately increases retained earnings on the balance sheet

How is the balance sheet linked to the other financial statements?

deducted from company's book balance

How would bank service charges be dealt with in a bank reconciliation?

added to bank statement balance

How would deposits in transit be dealt with in a bank reconciliation?

$ 63,000

If a company has $152,000 of revenues, declares and pays $55,000 in dividends, and has net income of $89,000, how much were expenses for the year?

$0

Lucky Company purchased a truck at a cost of $12,000 in 2011. As of January 1, 2016, depreciation of $10,000 had been recorded on this asset. Depreciation expense for 2016 is $2,000. After the adjustments are recorded and posted at December 31, 2016, what is the carrying value of the truck? $2,000

$16,000

In 2012, Blanton Company bought equipment with a cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years. It was depreciated by the straight-line method for 4 years. Due to obsolescence, it was determined at the beginning of 2016 that the useful life should be shortened by 3 years and the residual value changed to zero. The depreciation expense for 2016 is:

will provide future benefits for a company for an unlimited period of time.

Land is not depreciated because it

7.69

Lasiter Corp. reported net credit sales of $2,000,000 and cost of goods sold of $1,400,000 for 2016. On January 1, 2016, accounts receivable was $250,000. Amounts owed by customers increased by $20,000 during 2016. Rounding to two decimal places, what is Lasiter's accounts receivable turnover rate for 2016?

$3,000

Leary Corporation's end-of-year balance sheet consisted of the following amounts: Cash$25,000/Property, plant, and equipment 69,000/Capital stock107,000/Retained earnings ?/Accounts receivable$46,000/Long-term debt41,000/Accounts Payable22,000/Inventory33,000/ What is Leary's retained earnings balance at the end of the current year?

$63,000

Leary Corporation's end-of-year balance sheet consisted of the following amounts: Cash$25,000/Property, plant, and equipment 69,000/Capital stock107,000/Retained earnings ?/Accounts receivable$46,000/Long-term debt41,000/Accounts payable22,000/Inventory33,000/ What is Leary's total liabilities balance at the end of the current year?

Unearned Service Revenue: $ 1,000; Service Revenue: $ 9,000

Lincoln Corp. received advance payments from customers during 2016 of $10,000. At December 31, 2016, $1,000 of the advance payments still had not been earned. After the adjustments are recorded and posted at December 31, 2016, the balances in the Unearned Service Revenue and Service Revenue accounts will be

$ 45,000

Marcos Company reported the following items on its financial statements for the year ending December 31, 2017: Sales$560,000/Salary expense 40,000/Dividends 20,000/Cost of goods sold$400,000/Interest expense30,000/Income tax expense25,000/ How much will be reported as retained earnings on Marcos' balance sheet at December 31, 2017, if this is the first year of operations?

$60,000

Mclaren Corp. incurred the following costs to acquire and prepare land during 2016 for a new parking lot: purchase price for land, $800,000; cost to clear the land, $30,000; cost of paving, $40,000; and lighting for the parking lot, $20,000. How much should Mclaren Corp. record in the Land Improvements account?

$ 168,000

Mobile Power Corp. reported the following information for the year ended December 31, 2017. Revenue $40,000/Expenses 23,000/Dividends 10,000/Retained earnings at December 31, 2017 175,000/ What was the retained earnings balance for Mobile Power at December 31, 2016?

$9,600

Music Corporation The data below is for Music Corporation for 2016. Accounts receivable—January 1, 2016$236,000/Credit sales during 2016 820,000/Collections from credit customers during 2016 590,000/Customer accounts written off as uncollectible during 2016 8,000/Allowance for doubtful accounts—January 1, 2016 8,700/Estimated uncollectible accounts based on an aging analysis 9,600 Refer to the data for Music Corporation. If the aging approach is used to estimate bad debts, what is the balance in the Allowance for Doubtful Accounts after the bad debt expense adjustment?

$458,000

Music Corporation The data below is for Music Corporation for 2016. Accounts receivable—January 1, 2016$236,000/Credit sales during 2016 820,000/Collections from credit customers during 2016 590,000/Customer accounts written off as uncollectible during 2016 8,000/Allowance for doubtful accounts—January 1, 2016 8,700/Estimated uncollectible accounts based on an aging analysis 9,600/ Refer to the data for Music Corporation. What is the balance of Accounts Receivable at December 31, 2016?

$ 2,796

On March 2, Fenton Corporation sold merchandise with a gross price of $93,200 to a customer with terms of 3/10, n/30. How much Sales Discounts would be recorded if payment was received from the customer on March 10? Assume the company uses the Gross Method of recording receivables.

total assets remain the same.

One effect on the accounting equation when a firm lends money is

There is no effect on the accounting equation as one asset account increases while another asset account decreases.

Payment is received from customers who were billed earlier for services provided for them. For this transaction, identify the effect on the accounting equation.

$56,000

Royal Company purchased a dump truck at the beginning of 2014 at a cost of $60,000. The truck had an estimated life of 6 years and an estimated residual value of $24,000. On January 1, 2016, the company made major repairs of $20,000 to the truck that extended the life 1 year. Thus, starting with 2016, the truck has a remaining life of 5 years and a new salvage value of $8,000. Royal uses the straight-line depreciation method. What is the book value of the truck to be reported on the balance sheet at December 31, 2016?

The income statement reports the revenues and expenses of a company.

Which of the following statements is true?

A debit to Accounts Receivable for $6,600.

Squidly Products sold and delivered modems to Detail Solutions for $6,600 to be paid by Detail Solutions in three equal installments over the next three months. The journal entry made by Squidly to record this transaction will include:

$28,700

Taylor Corp. identified the following data in preparing a bank reconciliation on October 31, 2016. Bank statement balance$29,600/Taylor's book balance (before adjustments) ?/Outstanding checks 3,100/NSF checks 300/Service charges 200/Deposits in transit 2,200/Interest earned on checking account 100 How much is Taylor's adjusted cash balance on October 31, 2016?

$46,110

The accountant for Fazzi Corp. was preparing a bank reconciliation as of April 30, 2016. The following items were identified: Fazzi's book balance$46,200/Outstanding checks 1,100/Interest earned on checking account 50/Customer's NSF check returned by the bank 500/ In addition, Fazzi made an error in recording a customer's check; the amount was recorded in cash receipts as $150; the bank recorded the amount correctly as $510. What amount will Fazzi report as its adjusted cash balance at April 30, 2016?

Payment is made on a bank loan which Gravette had obtained 6 months ago.

Which of the following transactions affects the liabilities for Gravette, Inc.?

The net realizable value of Gloria's accounts receivable is $1,600,000.

The following information was presented in the balance sheet of Gloria Company as of December 31, 2016: Trade accounts receivable $1,600,000 Net of allowance for uncollectibles $100,000 Which one of the following statements is true?

$390,000

The following transactions occurred during March, the first month of operations for Canyon Products, Inc.:1. Issued 50,000 shares of capital stock in exchange for $600,000 cash/2. Purchased land for $400,000, using a $150,000 cash down payment and signing a note payable for the balance./3. Made a $60,000 cash payment on the note payable from the purchase of land./4. Purchased equipment on credit from Burton, Inc. for $63,000.What is the balance in the Cash account at the end of March?

Assets increase and liabilities increase

The purchase of office equipment on credit has what effect on the accounting equation?

Liabilities increase and stockholders' equity decreases.

What effect does "recognizing an accrued liability for utilities at the end of the accounting period" have on the accounting equation?

Canceled checks

Which of the following items would not be a reconciling item?

Balance Sheet

You are a potential stockholder and are concerned that a particular company you are ready to invest in might have too much debt. Which financial statement would provide you information needed in order to evaluate your concern?