acct test review 3

81. Acme Enterprises began the year owing its suppliers $3,000 for merchandise purchased last year. Acme then sold half of this merchandise for $5,000 on account. Two weeks later, Acme paid its suppliers $1,000 and bought another $4,000 of merchandise on account. Acme now has an Accounts Payable balance of:

A) $11,000. B) $6,000. C) $1,000. D) $4,500.

78. During one pay period, your company distributes $130,500 to employees as net pay. The income tax withholdings were $19,000 and the FICA withholdings were $5,000. Total payroll costs to the company for this pay period, excluding any unemployment taxes, was:

A) $149,500. B) $130,500. C) $154,500. D) $159,500.

86. Engstrom Company makes a sale and collects a total of $378, which includes an 8% sales tax. What is the amount that will be credited to the Sales Revenue account?

A) $378 B) $350 C) $406 D) $348

84. ABC Airlines collects $300 for a roundtrip ticket from Chicago to Los Angeles. The flights will not occur until the next accounting period. How does ABC Airlines record the $300 collected in advance?

A) A debit to Cash of $300 and a credit to Unearned Revenue of $300 B) A debit to Unearned Revenue of $300 and a credit to Cash of $300 C) A debit to Cash of $300 and a credit to Revenue of $300 D) A debit to Revenue of $300 and a credit to Cash of $300

80. Which of the following statements about payroll is correct?

A) Payroll deductions are an expense of the company. B) When recording the payroll, Salaries and Wages Expense equals the sum of all the deductions. C) The net pay is debited to Salaries and Wages Expense when the payroll is recorded. D) Gross earnings are computed by multiplying the time worked by the pay rate promised by the employer.

85. A 6-month note is issued on November 1. If no previous accruals have been made, how many months of interest should be accrued at December 31?

A) Six B) Two C) Four D) None

73. The principal of a loan does not include any interest charges.

A) True B) False

74. At the maturity date, the carrying value of a bond should always be equal to the face value.

A) True B) False

75. The debt-to-assets ratio indicates financing risk by computing the proportion of total assets financed by debt.

A) True B) False

87. The purpose of adjusting entries is to transfer net income and dividends to retained earnings.

A) True B) False

72. A company would most likely choose the double-declining balance depreciation method for which of the following long-lived tangible assets?

A) Vehicles B) Office buildings C) Warehouses D) Land improvements

76. Current liabilities could include all of the following except:

A) an accounts payable due in 30 days. B) a notes payable due in 9 months. C) a bank loan due in 18 months. D) any part of long-term debt due during the current period.

82. The law requires ______ to pay FICA taxes.

A) both employee and employer B) the employee C) the employer D) only retailers

71. At the end of the first year of an asset's life, the declining-balance depreciation:

A) causes an asset to be carried at a higher book value than that computed using the straight-line method. B) causes an asset to be carried at a lower book value than that computed using the straight-line method. C) causes an asset to be carried at the same book value as that computed using the straight-line method. D) cannot be used if the resulting book value will be significantly different from that which would result from using the straight-line method.

83. Texable, Inc. is required to match $45,900 for its portion of FICA and $4,700 for federal and state unemployment taxes. The entry to record Texable's payroll taxes includes:

A) debit to Payroll Tax Expense for $50,600. B) credit to Payroll Tax Expense for $50,600. C) debit to FICA Payable for $45,900. D) debit to Unemployment Tax Payable of $4,700.

79. If a company's gross salaries and wages are $12,000, and it withholds $1,800 for income taxes and $800 for FICA taxes, the journal entry to record the employees' pay should include a:

A) debit to Salaries and Wages Expense for $9,400. B) debit to Salaries and Wages Payable for $9,400. C) credit to Salaries and Wages Payable for $12,000. D) credit to Salaries and Wages Payable for $9,400.

77. A company typically records the amount owed to suppliers for goods or services when:

A) they are ordered. B) a verbal commitment to purchase the goods or services has first been made. C) payment is made. D) the goods or services are received.

91. During 2014, a company provided services for cash of $21,000 and services on credit of $15,000. The company collected accounts receivable of $8,000 and incurred operating expenses of $22,700, $14,000 of which were paid during the year. The amount of net income (loss) for the year is:

A. $13,300. B. ($1,700). C. $22,700. D. $6,300.

89.) What is the total of the credit column of the adjusted trial balance?

A. $24,700 B. $37,050 C. $74,900 D. $37,450

90. What is the amount of net income

A. ($2,000) B. ($3,800) C. ($1,600) D. ($3,300)

93. Which of the following groups of accounts contains only those that normally have credit balances?

A. Accounts Payable; Retained Earnings; Service Revenue. B. Equipment; Cash; Contributed Capital. C. Notes Payable; Wages Payable; Rent Expense. D. Accounts Receivable, Retained Earnings, Cash.

94. Which of the following statements regarding the balance sheet is true?

A. Any item on a balance sheet labeled payable is a liability of that company. B. Current Assets are listed on the balance sheet in alphabetical order. C. Assets + Liabilities = Equity D. It lists all the accounts and their debit and credit balances.

92. Which of the following statements regarding revenues and expenses is true?

A. Both revenues and expenses typically have credit balances. B. Revenues and expenses are considered assets and liabilities, respectively. C. Revenue is the same as cash. D. Expenses decrease the amount of stockholders' equity.

88. Which of the following statements about an adjusted trial balance is true?

A. Debits should equal credits both before and after adjustments are made. B. Debits will equal credits after adjustments are made but not necessarily before. C. Debits will equal credits before adjustments are made but not necessarily after. D. Debits do not have to equal credits in the adjusted trial balance but they must be equal in the post-closing trial balance.

95. Which of the following is not an example of an asset?

A. Notes receivable B. Supplies C. Prepaid expenses D. Retained Earnings