financial accounting hw 1

Internal Revenue Service

External users

Selecting economic activities relevant to the company.

Identifies

A business pays weekly salaries of $30500 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on a Wednesday is

debit Salaries and Wages Expense, $18300; credit Salaries and Wages Payable, $18300.

Sunland Supplies Inc. purchased a 12-month insurance policy on March 1, 2022 for $16200. At March 31, 2022, the adjusting journal entry to record expiration of this asset will include a

debit to Insurance Expense and a credit to Prepaid Insurance for $1350.

What does it cost us to manufacture each unit produced?

internal users

How often must FICA taxes and federal income tax (FIT) be reported?

quarterly

Employees who have physical custody of assets do not have access to the accounting records

segregation of duties

computer repair business

service

interior design firm

service

Employees at Swifty Corporation are paid $14100 cash every Friday for working Monday through Friday. The calendar year accounting period ends on Tuesday, December 31. How much salaries and wages expense should be recorded on December 31?

$5640

A bakery shop makes a large sale for $1240 on November 30. The customer is sent a statement on December 5 and a check is received on December 10. The bakery shop follows GAAP and applies the revenue recognition principle. When is the $1240 considered to be recognized?

November 30

The purchaser of merchandise debits Sales Discounts when payment is remitted within the discount period.

false

To grant a customer a sales return, the seller credits Sales Returns and Allowances.

false

Roger Holloway, owner of Roger's Photography, records his personal living costs as expenses of the business.

incorrect / economic entity assumption

Do we need to borrow in the near future?

internal users

Securities and Exchange Commission

internal users

Which product should we emphasize?

internal users

marketing manager

internal users

pharmacy

merchandising

sporting goods store

merchandising

The department that should pay the payroll is the:

treasurer's department.

A debit memorandum could explain a service fee that the bank charges.

true

Adjusting entries are often made because some business events are not recorded as they occur.

true

A credit sale of $750 is made on June 13, terms 2/10, net/30. A return of $50 is granted on June 16. The amount received as payment in full on June 23 is:

$686

Andy Manion earns $14 per hour for a 40-hour week and $21 per hour for any overtime work. If Manion works 45 hours in a week, his gross earnings are:

= $ 14 * $ 40 + $ 21 * 5 = $ 560 + $ 105 = $ 665

The sales accounts that normally have a debit balance are:

Both Sales Discounts and Sales Returns and Allowances.

Explaining uses, meaning, and limitations of data.

Communicates

Preparing accounting reports.

Communicates

Reporting information in a standard format.

Communicates

What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, $18460, and unexpired amounts per analysis of policies of $6110?

Debit Insurance Expense, $12350; Credit Prepaid Insurance, $12350.

A prenumbered shipping document is prepared for each shipment of goods to customers.

Documentation Procedures

Which one of the following is not an objective of a system of internal controls?

Enhance the fairness of the financial statements

Customers

External users

Each month, the assets on hand are compared to the accounting records by an internal auditor.

Independent Internal verification

Which of the following is not an element of the fraud triangle?

Internal verification

When paying freight on goods purchased, a buyer using the perpetual inventory system should debit

Inventory only.

Classifying economic events.

Records

Keeping a systematic chronological diary of events.

Records

Measuring events in dollars and cents.

Records

Summarizing economic events.

Records

Ivanhoe Market has total receipts of $42400, which include sales tax of 6%. Ivanhoe should record

Sales Taxes Payable of $2400 42400-40000

Which of the following would not be considered a merchandising company?

Service firm

Which is not one of the three parties involved when national credit cards are used in retail sales?

Supplier

Which of the following is not an example of fraud involving payroll?

Using prenumbered checks to pay employees.

In a bank reconciliation, deposits in transit are:

added to the bank balance

Employee voluntary payroll deductions include which of the following?

charity

Analyzing and interpreting information.

communicate

The Sales Returns and Allowances account and the Sales Discounts account are classified as:

contra revenue accounts.

Kingston Company includes in its accounting records only transaction data that can be expressed in terms of money.

correct / monetary unit assumption

On May 25, Mt. Sheridan Company received a $520 check from Douglas Fir for services to be performed in the future. The bookkeeper for Mt. Sheridan Company incorrectly debited Cash for $520 and credited Accounts Receivable for $520. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should:

debit Accounts Receivable $520 and credit Unearned Service Revenue $520.

The balance in the Prepaid Rent account before adjustment at the end of the year is $25200, which represents three months' rent paid on December 1. The adjusting entry required on December 31 is to

debit Rent Expense, $8400; credit Prepaid Rent, $8400.

The expense recognition principle matches

expenses with revenues

Did the company earn a satisfactory income?

external users

How does the company's profitability compare to other companies?

external users

Labor unions

external users

Will the company be able to pay its short-term debts?

external users

suppliers

external users

FOB Destination means the buyer pays the freight costs.

false

Most purchases are for cash.

false

Only deposits can be made at an ATM.

false

Sales minus operating expenses equals gross profit.

false

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

false

Tisinai Company owns buildings that are worth substantially more than they originally cost. In an effort to provide more relevant information, Tisinai reports the buildings at fair value in its accounting reports.

incorrect / historical cost principle

Can we afford to give our employees a pay raise?

internal users

production supervisors

internal users

store manager

internal users

vice president of finance

internal users

furniture factory

manufactoring

chemical plant

maufacturing

A special endorsement on a check allows the check to be deposited to another person's bank account.

true

Freight costs incurred by the seller on outgoing merchandise are an operating expense to the seller.

true

The routing number is a 9-digit number at the bottom of each check.

true