ACCT 2301 FINAL MC PRACTICE
c
identify the principle of internal control that is violated in the following situation: Taylor company is a very small business. Alexis dancer, one of the two office clerks, opens the mail each day and removes the cash and receipts that come in the mail. Alexis then records the receipts in the cash records and the customer's account and deposits the cash in the bank. a. insure assets and bond key employee b. maintain adequate records c. divide responsibility for related transactions d. perform regular and independent reviews
c
if a company fails to make an adjusting entry to estimate doubtful accounts, then this error: a. understates owners' equity b. understates assets c. overstates net income d. overstates expenses
a
if technology needs invests $1,200,000 today at 6% annual interest and the money is compounded semiannually, how much will be in the bank account one year from the date invested? a. $1,273,080 b. $1,296,000 c. $1,397,760 d. $1,272,000
b
internal auditing is a company function that: a. audits the firm's financial statements and expresses an opinion on them b. provides independent appraisals of the company's financial statements, its internal control, and its operations c. prepares the firm's income tax returns d. all of the above
c
jager inc. purchased a new machine at a total cost of $25,000. the machine is expected to have a 5-year useful life, at which time it is expected to be sold for $5,000. which of the following is true regarding depreciation in the first year? a. $5,000 if straight-line; $10,000 if double declining balance b. $4,000 if straight-line; $8,000 if double declining balance c. $4,000 if straight-line; $10,000 if double declining balance d. $5,000 if straight-line; $8,000 if double declining balance
b
jones co. issued a $1,000 face amount 20-year bond and received $950 at the time of issuance. the bond is sold at: a. a premium b. a discount c. face value d. cannot be determined without knowing interest rate
c
lucinda company purchased land and a building for a total price of $5,200,000. individually, the land was appraised at $840,000 and the building at $4,760,000. how much should be recorded as the acquisition cost of each asset? a. land, $840,000; building, $4,760,000 b. land, $840,000; building, $4,360,000 c. land, $780,000; building, $4,420,000 d. land, $800,000; building, $4,400,000
b
m. fields, inc. wishes to accumulate $1,000,000 to be used to pay off a loan at the end of 10 years. how much will m. fields deposit each year for 10 years, beginning at the end of the first year, to accumulate the desired amount if the investment earns an annual rate of 12%? a. $45,586 b. $56,984 c. $33,334 d. $26,432
d
m. fields, inc. wishes to accumulate $1,200,000 to be used to pay off a balloon note at the end of 4 years. how much will m.fields invest today to accumulate the desired amount if the investment earns an annual rate of 12% compounded quarterly? a. $704,000 b. $130,496 c. $508,416 d. $747,804
c
o'brien company's net accounts receivable before write-offs is $1,690,000. what is the balance in net accounts receivable, if $39,600 in doubtful accounts are written off? a. $1,646,000 b. $1,734,000 c. $1,690,000 d. cannot be determined
c
on January 1, 2013, adventure corporation purchased fro $316,000, equipment having a useful lie of ten years and an estimated salvage value of $16,000. adventure has recorded depreciation of the equipment on the straight-line method. on December 31, 2020, the equipment was sold for $56,000. as a result of this sale, adventure should recognize: a. $-0- b. a gain of $27,200 c. a loss of $20,000 d. a loss of $56,000
a
on January 1, 2016, pelino, inc. issued $800,000, 10-year, 8% bonds for $700,300. the bonds pay interest on June 30 and December 31. the market rate is 10%. how much is the interest expense on the bonds for the first interest payment on June 30, 2016? a. $35,015 b. $70,030 c. $64,000 d. $32,000
a
on January 1, 2016, thad, inc. issued $1,600,000, 10-year, 8% bonds for $1,400,600. the bonds pay interest on June 30 and December 31. the market rate is 10%. how much is the interest expense on the bonds for the first interest payment on June 30, 2016? a. $70,030 b. $140,060 c. $168,000 d. $64,000
b
on december 31, 2016 before adjusting entries, accounts receivable for Nickolas company had a debit balance of $200,000, and the allowance for doubtful accounts had a credit balance of $6,000. credit sales for the year were $1,600,000. if credit losses are estimated at 1% of credit sales: a. the balance of the allowance for doubtful accounts will be $10,000 after adjustment b. the balance of the allowance for doubtful accounts will be $22,000 after adjustment c. the balance of the allowance for doubtful accounts will be $16,000 after adjustment d. bad debts expense for the year will be $22,000
c
peak, inc. acquired a machine that involved the following expenditures and related factors: the initial accounting cost of the machine should be: a. $68,352 b. $56,032 c. $64,032 d. $63,232
c
procedures requiring that the recording of asset transactions be separated from the custody of those assets: a. will uncover collusion among employees b. are important only in very large businesses c. are especially important in handling cash d. make it easy for an employee to cover up the theft of an asset
c
purchasing supplies on account involves: a. an increase and a decrease to assets b. an increase in assets and a decrease to liabilities c. a increase in assets and an increase to liabilities d. a decrease to asset and a decrease to liabilities
d
recording the collection of accounts receivable from customers involves: a. debits accounts receivable and crediting cash b. debiting cash and crediting service fees earned c. debiting cash and crediting accounts payable d. debiting cash and crediting accounts receivable
a
research and development costs that relate to a firm's products and its production processes: a. must be expensed when incurred b. are capitalized when the costs benefit future periods c. may be expensed or capitalized at the discretion of the firm's management d. must be capitalized and amortized over 40 years
a
the aging method and the percentage of sales method differ because: a. the aging method first estimates the balance in the allowance account and then computes bad debt expense b. the percentage of sales method first estimates the balance in the allowance account and then computes bad debt expense c. there is no difference between the two methods regarding how they estimate the balance in the aging account and compute bad debt expense
a
the area of accounting dealing with the preparation of financial statements showing a business's results of operations, financial position, and cash flow is referred to as: a. financial accounting b. managerial accounting c. tax accounting d. regulatory accounting e. none of the above
c
the branch of accounting which ins involved in criminal investigations related to areas such as financial statement fraud, money laundering, or investment fraud is called: a. internal auditing b. cost accounting c. forensic accounting d. all of the above e. none of the above
a
the cash t-account of rainbow, inc. has a beginning balance of $52,000. during the year, $244,000 was debited and $241,000 was credited to the account. what is the ending balance of cash? a. $55,000 b. $37,000 c. ($5,000) d. cannot be determined from the information given
d
the document that sets for the structure purposes of a corporation is the: a. charter b. certificate of common stock c. certificate of incorporation d. articles of incorporation
a
the first financial statement to be prepared is: a. income statement b. balance sheet c. statement of cash flows d. statement of stockholders' equity
b
the internal control that requires no one individual is assigned too much responsibility is: a. maintained adequate accounting records b. segregation of duties c. conduct internal audits d. use control numbers
c
the inventory method that yields the highest cost of goods sold during periods of rising costs is: a. specific identification b. FIFO c. LIFO d. weighted-average cost
d
the lower-of-cost-or-market method for inventory: a. states that inventory must be reported on the balance sheet at its current replacement cost and may cause inventory to be written up to an amount larger than historic cost b. must be applied to inventory on an item by item basis c. places losses from price declines in the period the goods are sold rather than in the period of the price decline d. none of the above
d
the lower-of-cost-or-market method for inventory: a. states that inventory must be reported on the balance sheet at its current replacement cost and may cause inventory to be written up to an amount larger than historic cost b. must be applied to inventory on an item by item basis c. places losses from price declines in the period the goods are sold rather than in the period of the price decline d.. none of the above
c
the normal balance of an account is: a. the debit side b. the credit side c. the side on which increases are recorded d. the side on which decreases are recorded
c
the price of a bond is equivalent to: I. face value II. projected interest payments discounted to the present III. the amortization amount of a bond IV. the present value of the principal payment a. I + III b. I - III c. II + IV d. I + II
d
the primary components of the stockholders' equity section of a balance sheet for a corporation are: a. a capital amount for each stockholder in the corporation b. net income and retained earnings c. common stock and dividends d. common stock and retained earnings
c
the purpose of depreciation accounting is to: a. reflect changes in the current value of a plant asset over its useful life b. accumulate funds to replace a plant asset at the end of its useful life c. allocate a plant asset's cost, less its salvage value, to expense over the asset's useful life d. have a plant asset's book value equal to its initial cost by the end of its useful life
c
the purpose of depreciation accounting is to: a. reflect changes in the market value of a plant asset over its usefulness life b. accumulate funds to replace a plant asset at the end of its useful life c. allocate a plant asset's cost, less its salvage value, to expense over the asset's useful life d. have a plant asset's book value equal its initial cost by the end of its useful life
c
the trial balance: a. is prepared at the beginning of the accounting period b. is prepared after the financial statements c. serves as a check to debits = credits d. lists only the accounts from the general ledger with debit balances
c
town co. began the period with $20,000 of accounts receivable and an allowance for doubtful accounts balance of $1,000. if town wrote-off $100 of receivables and then recovered $50 of this amount, what would be the net receivables balance?
d
treasury stock is: a. stock of other corporations owned by a corporation b. a u.s. government security c. a corporation's own stock that has been retired d. a corporation's own stock that has been reacquired and held for future use
a
using a perpetual inventory system, the seller's journal entry to record the sale of merchandise on account includes a: a. credit to inventory b. debit to inventory c. debit to accounts payable d. credit to cost of goods sold
a
when invoices are sent to customers billing them for services that have been performed, the correct transaction analysis is: a. debit accounts receivable and credit service fees earned b. debit accounts payable and credit service fees earned c. debit service fees earned and credit accounts receivable d. debit cash and credit service fees earned
a
which best describes par value for stock? a. an arbitrary amount set by the company for each share of stock b. the value at which stock shares were issued c. the current market value of the stock d. the amount expected to be paid out as a dividend on a share of stock
b
which depreciation method does not consider salvage value in its first year calculation? a. straight line b. double-declining balance c. units of production d. none of the above
a
which of the following accounts is not affected by closing entries? a. common stock b. cash dividends c. retained earnings d. service fees earned
c
which of the following activities is an example of an investing activity? a. receiving a loan from a bank b. selling merchandise online c. purchasing a delivery truck d. issuing shares of stock in exchange for cash
c
which of the following activities is considered an investing activity? a. purchase of merchandise for resale b. payment on an existing bank loan c. purchase of a new warehouse d. payment of wages to employees
d
which of the following applies to common stock relative to preferred stock? a. voting rights b. shares in the corporation's ent income c. dividend preference d. both (a) and (b)
b
which of the following decreases stockholders' equity? a. purchasing equipment for cash b. paying monthly rent in cash c. issuing shares of stock d. paying cash to settle an account payable
a
which of the following depreciation methods would result in the most depreciation in the first year, assuming an eight year life and no salvage value? a. double-declining balance b. straight line c. not enough information available to determine answer d. the depreciation would be the same under both methods
d
which of the following does not affect the current liabilities section of the balance sheet? a. purchase of inventory on credit b. wages owed to employees but not yet paid c. insurance bill to be paid next month d. sale of goods on credit
d
which of the following does not affect the current liabilities section of the balance sheet? a. purchase of inventory on credit b. wages owed to employees but not yet paid c. insurance ill to be paid next month d. sale of goods on credit
d
which of the following does not occur when a company receives additional information that requires it to increase its expectations of doubtful accounts receivable? a. accounts receivable (net) is reduced b. bad debts expense is increased c. net income is reduced d. the allowance account is decreased
d
which of the following financial statements displays a company's revenues and expenses? a. balance sheet b. statement of cash flows c. statement of stockholders' equity d. income statement
c
which of the following is a capital expenditure? a. cleaning, waxing, and polishing a company car b. purchasing a wastebasket for company office c. adding a power winch to a company service truck d. replacing filters on the company furnace
d
which of the following is a required separate disclosure for firms using the direct method in the statement of cash flows? a. a reconciliation of net income to net cash flows from operating activities b. a list of all non cash investing and financing transactions c. the policy for determining which highly liquid, short-term investments are treated as cash equivalents d.. all of the above
d
which of the following is a revenue expenditure? a. adding air conditioning to a company car b. adding a loading and unloading dock to the company's warehouse c. purchasing a microcomputer for the marketing department d. replacing the battery in a company truck
b
which of the following is an example of a financing activity? a. acquisition of land b. borrowing money from a bank c. producing and selling a product d. disposition of old equipment
d
which of the following is not a current liability? a. account payable b. unearned revenue c. payroll taxes payable d. bonds payable
b
which of the following is not a feature of good internal accounting control over cash? a. all cash receipts are deposited in the bank each day b. most bills are paid with paper currency and coins to minimize the bank service charges c. a bank reconciliation is prepared when each bank statement is received d. cash is handled separately from the recording of cash transactions
c
which of the following is not a subgroup on a classified balance sheet? a. current liabilities b. long-term assets c. net sales d. stockholders' equity
a
which of the following is not a type of accrual adjustment? a. common stock b. accrued expenses c. prepaid expenses d. unearned revenue
c
which of the following is not an advantage of the corporate form of business organization? a. the ease with which capital can be raised b. the protection afforded stockholders against personal liability c. both the business and the owners are taxed d. the relative ease of selling ownership shares
c
which of the following is not an internal control component identified in the COSO framework? a. risk assessment b. monitoring activities c. technology d. control environment
c
which of the following is not an inventory account for manufacturing companies? a. work-in-process b. finished goods c. cost of goods sold d. raw materials
d
which of the following is not part of a multi-step income statement? a. operating expenses b. net sales c. income from operations d. current assets
d
which of the following is the correct order of the steps in the accounting cycle? a. adjust, report, analyze, adjust, and close b. record, report, analyze, adjust, and close c. report, analyze, close, record, and adjust d. analyze, record, adjust, report, and close
b
which of the following journal entries will record the payment of a $1,700 accounts payable originally incurred for office supplies? a. debit cash; credit accounts payable b. debit accounts payable; credit cash c. debit office supplies; credit cash d. debit office supplies; credit accounts payable
d
which of the following plant assets is not depreciated? a. furniture and equipment b. land improvements c. delivery truck d. all of these are depreciated
d
which of the following rights do common stockholders typically not have? a. right to vote and the right to elect the board of directors b. right to receive the final distribution of assets in liquidation after prior claims have been settled c. right to participate in additional issues of stock d. right to receive dividends at a predetermined rate
a
which of the following statements is correct? a. a corporation's issued stock may exceed its outstanding stock b. a corporation's outstanding stock may exceed its authorized stock c. a corporation's issued stock may exceed its authorized stock d. a corporation's treasury stock may exceed its issued stock
c
which of the following will properly record the payment of a two-year insurance policy? a. increase assets and increase retained earnings b. increase liabilities and decrease retained earnings c. increase and decrease assets d. decrease assets and decrease liabilities
d
which one of the following does not impact retained earnings directly? a. net income b. net loss c. dividends d. stock issuances
d
which one of the following errors causes an overstatement of net income? a. failure to accrue revenue earned but not billed b. failure to record collection of an account receivable c. failure to record a portion of fees received in advance that is earned by year end d. failure to record depreciation expense
d
which one of the following errors causes an overstatement of net income? a. failure to accrue revenue earned but not billed b. failure to record collection of an account receivable c. failure to record a portion of fees received in advance that is earned by year-end d. failure to record depreciation expense
c
Howard company issues bonds with a par value of $900,000 on their issue date. the bonds mature in 5 years and pay 6% interest in semiannual payments. on the issue date, the market rate of interest (annual) is 8%. the price of the bonds on their issue date is: a. higher than 900,000 b. 900,000 c. lower than 900,000 d. not enough information available to determine answer
c
Jane cooper industries plans to issue 8-year, 8%, $200,000 bonds paying interest on an annual basis, at a $4,000 premium. which one of the following statements is true? a. the cash paid to bondholders will be $4,000 each interest period b. Jane cooper will receive $196,000 as the issue price c. Jane cooper's annual interest expense on the bonds will be less than the amount of interest payments to bondholders each year d. Jane cooper's annual interest expense on the bonds will be greater than the amount of interest payment to bondholders each year
c
John den bear company had a $150,000 beginning balance in accounts receivable and a $6,000 credit balance in the allowance for doubtful accounts. during the year, credit sales were $600,000 and customer's accounts collected were $590,000. also, $4,000 in worthless accounts were written off. what was the net amount of receivables included in the current assets at the end of the year, before any provision was made for doubtful accounts?
c
Kate company purchased a tractor at a cost of $180,000. the tractor has an estimated salvage value of $20,000 and an estimated life of 8 years, or 12,000 hours of operation. the tractor was purchased on January 1, 2016 and was used 2,400 hours in 2016 and 2,200 hours in 2017. what method of depreciation will produce the maximum depreciation expense in 2016? a. straight-line b. units-of-production c. double-declining-balance d. all methods produce the same expense in 2016
b
Sienna corp paid $30,000 for a new specialized machine. in addition, Sienna paid $600 to transport the equipment to its installation location and paid an additional $300 to have the equipment professionally installed. Sienna expects the new machine to lower operating costs by $5,000 the first year. what is the amount Sienna should show as the cost of the equipment? a. $30,000 b. $30,900 c. $30,600 d. $25,900
c
Wilson company is authorized to issue 1,000,000 shares of $10 par value common stock. by march 15, 2016, the company had issued 200,000 shares at $34 per share. on march 15, 2016, the company declared a 10% stock dividend when the market price was $40 per share. what amount is transferred from retained earnings to paid-in capital as a result of the stock dividend? a. $600,000 b. $200,000 c. $800,000 d. $2,400,000
a
a firm's cash flow from investing activities includes: a. cash received from the sale of a plant asset b. cash paid as dividends c. cash received form the rendering of services to customers d. cash paid to retire bonds payable
c
a firm's net cash flow from operating activities includes: a. cash received from sale of equipment b. cash received from issuance of common stock c. cash received from sale of merchandise d. cash received as payment of loan from a borrower
d
a retailer that makes credit card sales: a. absorbs any losses on uncollectible credit card accounts b. is charged a fee ranging from 1% to 5% of the amount of each credit card sale c. records such sales as a debit to cash or accounts receivable, a debit to credit card fees expense, and a credit to sales revenue d. both (b) and (c)
b
a statement of stockholders' equity: a. replaces the income statement as a basic financial statement b. presents an analysis of all components of stockholders' equity for the accounting period c. may be presented in a single-step or multiple-step format d. none of the above
c
an adjusting entry will not take the format of which one of the following entries? a. a debit to an expense account and a credit to a liability account b. a debit to an asset account and a credit to a revenue account c. a debit to an expense account and a credit to a revenue account d. a debit to a liability account and a credit to a revenue account
c
assets are recorded in the balance sheet in order of: a. market value b. historic value c. liquidity d. maturity
c
assuming rising prices, which method will give the highest dollar value for cost of goods sold on the income statement? a. FIFO b. average cost c. LIFO d. all of these give equal values for cost of goods sold
a
at what point is an asset considered to be impaired? a. when the net book value is greater than the sum of expected cash flows b. when the net book value is less than the sum of expected cash flows c. when the net book value is less than the fair value d. when the net book value is greater than the fair value
c
beautiful lawns company estimates its doubtful accounts by aging its accounts receivable and applying percentages to various aged categories of accounts. the beautiful lawns company computes a total of $3,600 in estimated doubtful accounts as of December 31, 2016. its accounts receivable account has a balance of $112,800 and its allowance for doubtful accounts has a credit balance of $600 before adjustment at December 31, 2016. how much bad debts expense will beautiful lawns report in 2016? a. $480 b. $3,840 c. $3,000 d. $3,360
c
caars inc. issued a 120-day note in the amount of $360,000 on November 1, 2016 with an annual rate of 6%. what amount of interest has accrued as of December 31, 2016? a. $6,000 b. $4,500 c. $3,600 d. zero. the interest is accrued at the end of the 120 day period
b
camire & sons company, inc., has a net income from the current year. the entry to close the company's income summary account would be: a. debit income summary; credit common stock b. debit income summary; credit retained earnings c. debit common stock; credit income summary d. debit retained earnings; credit income summary
d
didwania company had a transaction that caused a $80,000 decrease in both assets and liabilities. this transaction could have been a(n): a. purchase of office equipment for $108,000, paying $28,000 cash and issuing a note payable for the balance b. investment of $80,000 cash in the business by the stockholders c. purchase of office equipment for $80,000 cash d. repayment of a $80,000 bank loan
d
during may, 2016, nevling outdoor corporation announced a 3-for-1 forward stock split. this brought the number of shares outstanding from 25,792,000 shares to ______ shares, and its $1.80 par value to ______ per share. a. 8,597,334; $5.40 b. 8,897,334; $0.60 c. 77,376,000; $5.40 d. 77,376,000; $0.60
d
during may, 2016, tang outdoor corporation announced a 4-for-1 stock split. this brought the number of outstanding shares from 14,681,000 shares to ______ shares, and its $3.60 par value to _____ per share a. 3,670,250; $14.40 b. 3,670,250; $0.90 c. 58,724,000; $14.40 d. 58,724,000; $0.90
d
from the viewpoint of a good internal accounting control, which of the following individuals would be the proper person to prepare bank reconciliations for a company that receives cash payments both through the mail and from customers in person? a. the individual who opens the company's mail and lists the payments received b. the individual who works in the customer service department and receives payment from customers who pay in person c. the individual who deposits the daily cash receipts in the bank d. none of the above
d
from the viewpoint of good internal accounting control, which of the following individuals would be the proper person to prepare bank reconciliations for a company that receives cash payments both through the mail and from customers in person? a. the individual who opens the company's mail and lists the payments received b. the individual who works in the customer service department and receives payments from customers who pay in person c. the individual who deposits the daily cash receipts in the bank d. none of the above
b
goods in transit which are shipped F.O.B. shipping point should be: a. included in the inventory of the shipping company b. included in the inventory of the buyer c. included in the inventory of the seller d. none of the above
b
goods in transit which are shipped F.O.B. shipping point should be: a. included in the inventory of the shipping company b. included in the inventory of the buyer c. included in the inventory of the seller d. none of the above
c
how should intangible assets be disclosed on the balance sheet? a. at the estimated fair value at the balance sheet date b. at cost in the current assets section c. net of the costs already amortized d. as a reduction of stockholders' equity
c
which of the following accounts normally has a debit balance? a. accounts payable b. common stock c. dividends d. service fees earned
c
which of the following is a primary principle underlying accrual accounting? a. materiality b. cash flows c. revenue recognition d. income statement
b
which of the following is desirable in a good system of internal accounting control: a. responsibility and authority for a given function should be shared among several employees b. appropriate forms, such as checks and sales invoices, should have preprinted control numbers c. all accounting personnel in a firm should be bonded d. to obtain the benefit of specialization, employees should not be rotated among similar jobs
b
which of the following is desirable in a good system of internal accounting control? a. responsibility and authority for a given function should be shared among several employees b. appropriate forms, such as checks and sales invoices, should have preprinted control numbers c. all accounting personnel in a firm should be bonded d. to obtain the benefit of specialization, employees should not be rotated among similar jobs
c
which of the following is not an internal control component identified in the COSO framework: a. risk assessment b. monitoring activities c. technology d. control environment
d
which of the following would appear as an addition to net income on an indirect statement of cash flows? a. depreciation b. a decrease in accounts receivable c. a decrease in accounts payable d. both (a) and (b)
a
which one of the following is not a reason for which adjusting entries are made? a. to close the income statement accounts and prepare them for the following year's activity b. to allocate used or expired assets to reflect expenses incurred in the period c. to allocate the earned portion of unearned revenue to reflect revenues earned during the period c. to accrue expenses to reflect expenses incurred in the period that are not yet paid or recorded
a
which one of the following is not a reason for which adjusting entries are made? a. to close the income statement accounts and prepare them for the following year's activity b. to allocate used or expired assets to reflect expenses incurred in the period c. to allocate the earned portion of unearned revenue to reflect revenues earned during the period d. to accrue expenses to reflect expenses incurred in the period that are not yet paid or recorded
a
which one of the following selections is not a component of paid-in capital? a. retained earnings b. common stock c. additional paid-in capital d. all of the above
c
which one of the following will never appear on a post-closing trial balance? a. unearned revenue b. retained earnings c. rent expense d. common stock
a
why is one dollar now worth more than one dollar in the future? a. funds can be invested in earning assets to yield a positive return b. the amount to be received in the future is smaller than the amount to be paid off today c. the value of interest declines over time d. the time value of money depreciates over long periods of time
a
willamette company sells a plant asset and correctly records a gain on the sale. the presence of a gain means the sales proceeds must have been greater than the plant asset's: a. book value b. accumulated depreciation c. original cost d. original cost minus salvage value
a
Kiki company has 5 sales employees each of whom earns $8,000 per month and is paid on the last working day of the month. each employee's wages are subject to FICA social security taxes of 6.2% and medicare taxes of 1.45% on all wages. withholding for each employee also includes federal income tax of 16% and monthly medical insurance premiums of $220 for each employee. the entry to accrue the company's monthly sales salaries expense on January 31 will not include: a. a credit to accrued payroll payable of $10,560 b. a credit to FICA-medicare taxes payable for $580 c. a credit to FICA-social security taxes payable for $2,480 d. a credit to employee medical insurance payable for $1,100
c
currently, the organization with the primary responsibility for formulating u.s. generally accepted accounting principles is the: a. American institute of certified public accountants b. securities and exchange commission c. financial accounting standards board d. internal revenue service e. none of the above
c
each of the following is an advantage of the corporate form except: a. limited liability b. transferability of ownership c. taxation d. capital raising ability
a
financial accounting oversight in the United States is provided by all of the following organizations except the: a. international accounting standards board (IASB) b. financial accounting standards board (FASB) c. public company accounting oversight board (PCAOB) d. u.s. securities exchange commission (SEC)
c
goodwill can be recorded as an asset when: a. an offer is received to purchased the business at a price in excess of the value of the assets b. a business has above normal profitability compared to other businesses in its industry c. a business is purchased and payment is made in excess of the fair value of the identifiable net assets d. a business can determine that it has created customer goodwill and name recognition
b
in a double-entry accounting system: a. all accounts have normal debit balances b. a debit entry is recorded on the left side of an account c. liabilities, common stock, and expense accounts all have normal credit balances d. a credit entry records a decrease in an account
a
in a statement of cash flows, interest paid to creditors is classified as a cash flow from: a. operating activities b. trading activities c. financing activities d. investing activities
a
in accounting for credit losses: a. the allowance method matches losses with related sales better than the direct write-off method b. the direct write-off method involves estimating credit losses c. the direct write-off method consistently understates assets on the balance sheet d. both (b) and (c)
b
the first step in the accounting cycle is: a. report b. analyze c. record d. adjust
