Accounting 1 Final (CH 1-12) 2

Bonding involves all of the following except

D) Employees do not commit inappropriate acts because of the threat of prosecution and their loyalty to the employer.

The amount of stock that may be issued according to the corporation's charter is referred to as the

A) authorized stock.

Investing activities include

A) collecting cash on loans made.

Leyland Realty Company received a check for $18,000 on July 1, which represents a 6-month advance payment of rent on a building it rents to a client. Unearned Rent Revenue was credited for the full $18,000. Financial statements will be prepared on July 31. Leyland Realty should make the following adjusting entry on July 31:

A) debit Unearned Rent Revenue, $3,000; credit Rent Revenue, $3,000.

One of the accounting concepts upon which adjustments for prepayments and accruals are based is:

A) expense recognition.

An adjusting entry is not required for

A) outstanding checks.

Under the allowance method, Bad Debt Expense is recorded

C) for an amount that the company estimates it will not collect.

Liabilities are classified on the balance sheet as current or

C) long-term.

When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when

C) management estimates the amount of uncollectibles.

The term legal capital is a descriptive term for

B) par value.

Wang Company had the following transactions during 2016: What is Wang's 2016 net income using cash basis accounting?

A) $1,600

Jackson Company recorded the following cash transactions for the year: Paid $135,000 for salaries. Paid $60,000 to purchase office equipment. Paid $15,000 for utilities. Paid $6,000 in dividends. Collected $275,000 from customers. What was Jackson's net cash provided by operating activities?

A) $125,000

Sassy Saxophones has the following inventory data: Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a LIFO basis?

A) $18,320

A machine with a cost of $640,000 has an estimated salvage value of $40,000 and an estimated useful life of 5 years or 15,000 hours. It is to be depreciated using the units-of-activity method of depreciation. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?

A) $200,000.

Nilson Company gathered the following reconciling information in preparing its August bank reconciliation: The adjusted cash balance per books on August 31 is

A) $33,280.

Equipment was purchased for $85,000 on January 1, 2016. Freight charges amounted to $3,500 and there was a cost of $10,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $15,000 salvage value at the end of its 5-year useful life. What is the amount of accumulated depreciation at December 31, 2017, if the straight-line method of depreciation is used?

A) $33,400.

Use the following data to determine the total amount of working capital. Koonce Office Supplies Balance Sheet December 31, 2017

A) $360,000

A company sells a plant asset that originally cost $360,000 for $120,000 on December 31, 2017. The accumulated depreciation account had a balance of $180,000 after the current year's depreciation of $30,000 had been recorded. The company should recognize a

A) $60,000 loss on disposal.

Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry:

A) Accounts Receivable Cash

Which of the following statements is correct?

A) Due to its liquid nature, cash is the easiest asset to steal.

Why do generally accepted accounting principles require the application of the revenue recognition principle?

A) Failure to apply the revenue recognition principle could lead to a misstatement of revenue.

Trademarks would appear in which balance sheet section?

A) Intangible assets

Moss County Bank agrees to lend the Sadowski Brick Company $500,000 on January 1. Sadowski Brick Company signs a $500,000, 6%, 9-month note. What is the adjusting entry required if Sadowski Brick Company prepares financial statements on June 30?

A) Interest Expense 15,000 Interest Payable 15,000

Which of the following is an advantage of corporations relative to partnerships and sole proprietorships?

A) Reduced legal liability for investors

A very small company would have the most difficulty in implementing which of the following internal control activities?

A) Separation of duties.

When a perpetual inventory system is used, which of the following is a purpose of taking a physical inventory?

A) To check the accuracy of the perpetual inventory records

Jason Hansen has invested $600,000 in a privately held family corporation. The corporation does not do well and must declare bankruptcy. What amount does Hansen stand to lose?

A) Up to his total investment of $600,000.

An accounting time period that is one year in length is called:

A) a fiscal year.

When expenses exceed revenues, which of the following is true?

A) a net loss results

The acquisition of land by issuing common stock is

A) a noncash transaction that is not reported in the body of a statement of cash flows.

Two individuals at a retail store work the same cash register. You evaluate this situation as

A) a violation of establishment of responsibility.

If a check correctly written and paid by the bank for $628 is incorrectly recorded on the company's books for $682, the appropriate treatment on the bank reconciliation would be to

A) add $54 to the book's balance.

Under the allowance method, writing off an uncollectible account

A) affects only balance sheet accounts.

With an interest-bearing note, the amount of assets received upon issuance of the note is generally

A) equal to the note's face value.

A current liability is a debt that can reasonably be expected to be paid

A) within one year, or the operating cycle, whichever is longer.

Generally, the most important category on the statement of cash flows is cash flows from

A) operating activities.

The order of presentation of activities on the statement of cash flows is

A) operating, investing, and financing.

Prepaid expenses are:

A) paid and recorded in an asset account before they are used or consumed.

Most business enterprises in the United States are

A) proprietorships and partnerships.

Using accrual accounting, expenses are recorded and reported only:

A) when they are incurred whether or not cash is paid.

Manufactured inventory that has begun the production process but is not yet completed is

A) work in process.

Alpha First Company just began business and made the following four inventory purchases in June: physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is

B) $1,508

A company purchased factory equipment for $450,000. It is estimated that the equipment will have a $45,000 salvage value at the end of its estimated 5-year useful life. If the company uses the double-declining-balance method of depreciation, the amount of annual depreciation recorded for the second year after purchase would be

B) $108,000.

Conway Company purchased merchandise inventory with an invoice price of $12,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Conway Company pays within the discount period?

B) $11,760

Financial information is presented below: The amount of net sales on the income statement would be

B) $150,000

The following information is available for Bradshaw Corporation and Newell Corporation: Based on this information, what is the amount of Bradshaw's earnings per share (rounded to two decimals) for 2017?

B) $2.50

Mitchell Corporation bought equipment on January 1, 2017. The equipment cost $300,000 and had an expected salvage value of $50,000. The life of the equipment was estimated to be 6 years. The depreciable cost of the equipment is

B) $250,000.

A plant asset cost $192,000 and is estimated to have a $24,000 salvage value at the end of its 8-year useful life. The annual depreciation expense recorded for the third year using the double-declining-balance method would be

B) $27,000.

Given the data below for a firm in its first year of operation, determine net income under the accrual basis of accounting.

B) $28,000

On January 15, Nifty Company sells merchandise on account to Martinez Associates for $5,000 with terms 3/10, n/30. On January 20, Martinez returns merchandise worth $1,000 to Nifty. On January 24, payment is received from Martinez for the balance due. What is the amount of cash received?

B) $3,880

Use the following data to determine the total amount of working capital. Eddie Auto Supplies Balance Sheet December 31, 2017

B) $351,000

Based on the following data, what is the amount of current assets?

B) $390,000

Barnes Company showed the following balances at the end of its first year: What amount did Barnes Company show as total credits?

B) $41,400

Financial information is presented below: Gross profit would be

B) $42,000

Equipment with a cost of $300,000 has an estimated salvage value of $20,000 and an estimated life of 4 years or 10,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours?

B) $70,000.

Crawford Company started the year with $60,000 in its Common Stock account and a credit balance in Retained Earnings of $44,000. During the year, the company earned net income of $48,000 and declared and paid $20,000 of dividends. In addition, the company sold additional common stock amounting to $28,000. As a result, the amount of its retained earnings at the end of the year would be

B) $72,000.

During February 2017, its first month of operations, the owner of Schwenn Enterprises invested cash of $100,000. Schwenn had cash sales of $20,000 and paid expenses of $35,000. Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28?

B) $85,000 debit

Tidwell Company's goods in transit at December 31 include sales made Which items should be included in Tidwell's inventory at December 31?

B) (1) and (4)

If Hostell Company has net sales of $500,000 and cost of goods sold of $350,000, Hostell's gross profit rate is

B) 30%.

When an account becomes uncollectible and must be written off

B) Accounts Receivable should be credited.

n 2017, Blanchard Corporation has plant equipment that originally cost $120,000 and has accumulated depreciation of $48,000. A new processing technique has rendered the equipment obsolete, so it is retired. Which of the following entries should Blanchard use to record the retirement of the equipment?

B) Accumulated Depreciation-Equipment 48,000 Loss on Disposal of Plant Assets 72,000 Equipment 120,000

Moss County Bank agrees to lend the Sadowski Brick Company $500,000 on January 1. Sadowski Brick Company signs a $500,000, 6%, 9-month note. The entry made by Sadowski Brick Company on January 1 to record the proceeds and issuance of the note is

B) Cash 500,000 Notes Payable 500,000

Mohling Company typically sells subscriptions on an annual basis, and publishes eight times a year. The magazine sells 60,000 subscriptions in January at $10 each. What entry is made in January to record the sale of the subscriptions?

B) Cash 600,000 Unearned Subscription Revenue 600,000

Tomlinson Packaging Corporation began business in 2017 by issuing 50,000 shares of $5 par common stock for $8 per share and 5,000 shares of 6%, $10 par preferred stock for par. At year end, the common stock had a market value of $10. On its December 31, 2017 balance sheet, Tomlinson Packaging would report

B) Common Stock of $250,000.

A corporation purchases 30,000 shares of its own $10 par common stock for $25 per share, recording it at cost. What will be the effect on total stockholders' equity?

B) Decrease by $750,000.

For which of the following errors should the appropriate amount be added to the balance per bank on a bank reconciliation?

B) Deposit of $600 recorded by the bank as $60.

Which of the following bank reconciliation items would not result in an adjusting entry?

B) Deposits in transit.

Moss County Bank agrees to lend the Sadowski Brick Company $500,000 on January 1. Sadowski Brick Company signs a $500,000, 6%, 9-month note. What entry will Sadowski Brick Company make to pay off the note and interest at maturity assuming that interest has been accrued to September 30?

B) Notes Payable 500,000 Interest Payable 22,500 Cash 522,500

Crowder Corporation recorded the return of $200 of goods originally sold on credit to Discount Industries. Using the periodic inventory approach, Crowder would record this transaction as:

B) Sales Returns and Allowances 200 Accounts Receivable 200

Stockholders of a corporation directly elect

B) The board of directors

Which of the following is not an internal control activity for cash?

B) The functions of record keeping and maintaining custody of cash should be combined.

Which one of the following is not an ownership right of a stockholder in a corporation?

B) To declare dividends on the common stock.

Under the direct write-off method of accounting for uncollectible accounts

B) a specific account receivable is decreased for the actual amount of bad debt at the time of write-off.

The right to receive money in the future is called a(n)

B) account receivable.

The current portion of long-term debt should

B) be reclassified as a current liability.

All leases are classified as either

B) capital leases or operating leases.

Receivables are

B) claims that are expected to be collected in cash.

Inventory costing methods place primary reliance on assumptions about the flow of

B) costs.

An aging of a company's accounts receivable indicates that $9,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $3,200 debit balance, the adjustment to record bad debts for the period will require a

B) debit to Bad Debt Expense for $12,200.

The following totals for the month of April were taken from the payroll records of Noll Company. The entry to record accrual of employer's payroll taxes would include a

B) debit to Payroll Tax Expense for $11,660.

In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is

B) deducted from net income.

The expense recognition principle matches:

B) expenses with revenues.

The proprietorship form of business organization

B) generally receives favorable tax treatment relative to a corporation.

A company would be expected to generate small amounts of cash from operations during the

B) growth phase.

A debit balance in the Allowance for Doubtful Accounts

B) indicates that actual bad debt write-offs have exceeded previous provisions for bad debts.

The partnership form of business organization

B) is a common form of organization for service -type businesses.

The relationship between current assets and current liabilities is important in evaluating a company's

B) liquidity.

Of the items below, the one that appears first on the statement of cash flows is

B) net increase (decrease) in cash.

A corporation has the following account balances: Common Stock, $1 par value, $80,000; Paid-in Capital in Excess of Par Value, $2,700,000. Based on this information, the

B) number of shares issued is 80,000.

If a company is given credit terms of 2/10, n/30, it should

B) pay within the discount period and recognize a savings.

Ratios that measure the income or operating success of a company for a given period of time are

B) profitability ratios.

If accounts receivable have increased during the period

B) revenues on an accrual basis are greater than revenues on a cash basis.

When stock is issued in exchange for a noncash asset, the value recorded for the shares issued is best determined by

B) the market value of the shares.

The following information was taken from Hobson Company cash budget for the month of June If the company has a policy of maintaining an end-of-the-month cash balance of $150,000, the amount the company would have to borrow is

C) $0

The interest charged on a $300,000 note payable, at the rate of 6%, on a 90-day note would be

C) $4,500.

Baker Bakery Company just began business and made the following four inventory purchases in June: A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is

C) $1,824

The following is selected information from C Corporation for the fiscal year ending October 31, 2017. Based on the accrual basis of accounting, what is C Corporation's net income for the year ending October 31, 2017?

C) $106,000

Pearson Company bought a machine on January 1, 2017. The machine cost $180,000 and had an expected salvage value of $30,000. The life of the machine was estimated to be 5 years. The book value of the machine at the beginning of the third year would be

C) $120,000.

Use the following data to determine the total dollar amount of assets to be classified as investments. Carne Auto Supplies Balance Sheet December 31, 2017

C) $180,000

Andrea's Fashions sold merchandise for $190,000 cash during the month of July. Returns that month totaled $4,000. If the company's gross profit rate is 40%, Andrea's will report monthly net sales revenue and cost of goods sold of

C) $186,000 and $111,600.

Olympus Climbers Company has the following inventory data: A physical count of merchandise inventory on July 30 reveals that there are 48 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for July is

C) $2,010.

In the first month of operations, the total of the debit entries to the Cash account amounted to $7,000 and the total of the credit entries to the Cash account amounted to $4,000. The Cash account has a

C) $3,000 debit balance

Trumpeting Trumpets has the following inventory data: Assuming that a periodic inventory system is used, what is the cost of goods sold on a FIFO basis?

C) $38,480

During January 2017, its first month of operation, Osborn Enterprises earned net income of $6,800 and paid dividends to the owners of $2,000. At January 31, the balance in Retained Earnings will be

C) $4,800 credit.

Jack's Copy Shop bought equipment for $240,000 on January 1, 2016. Jack estimated the useful life to be 3 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2017, Jack decides that the business will use the equipment for a total of 5 years. What is the revised depreciation expense for 2017?

C) $40,000.

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $55,000. If the balance of the Allowance for Doubtful Accounts is $11,000 debit before adjustment, what is the amount of bad debt expense for that period?

C) $66,000

Sampson Company's accounting records show the following for the year ending on December 31, 2017. Using the periodic system, the cost of goods purchased is

C) $681,020.

Clark Company developed the following reconciling information in preparing its September bank reconciliation: Using the above information, determine the cash balance per books (before adjustments) for the Clark Company.

C) $7,455.

Kinsler Company uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $250,000 and credit sales are $1,000,000. Management estimates that 6% of accounts receivable will be uncollectible. What adjusting entry will Kinsler Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment?

C) Bad Debts Expense 12,500 Allowance for Doubtful Accounts 12,500

Jack and Jill form a partnership. Jack runs the business in New York, while Jill vacations in Hawaii. During the time Jill is away from the business, Jack increases the debts of the business by $20,000. Which of the following statements is true regarding this debt?

C) Both Jack and Jill are personally liable for the business debt.

Which of the following statements concerning taxation is accurate?

C) Corporations pay federal and state income taxes.

Which of the following is not an advantage of the corporate form of business organization?

C) Favorable tax treatment

If Norben Company issues 6,000 shares of $5 par value common stock for $210,000, the account

C) Paid-in Capital in Excess of Par Value will be credited for $180,000.

Which of the following items does not result in an adjustment in the merchandise inventory account under a perpetual system?

C) Payment of freight costs for goods shipped to a customer

Which of the following is an example of a deferral adjusting entry?

C) Prepaid expense

Which accounts normally have credit balances?

C) Revenues, liabilities, and retained earnings

A local retail shop has been operating as a sole proprietorship. The business is growing and now the owner wants to incorporate. Which of the following is not a reason for this owner to incorporate?

C) The prestige of operating as a corporation

Which of the following methods of computing depreciation is production based?

C) Units-of-activity.

Which one of the following questions is most likely asked by an internal human resources director for the company?

C) What average pay raise is affordable for employees this year?

Bad Debt Expense is considered

C) a necessary risk of doing business on a credit basis.

In preparing a statement of cash flows, a conversion of bonds into common stock will be reported in

C) a separate schedule or note to the financial statements.

An account consists of

C) a title, a debit side, and a credit side.

In order to determine net cash provided by operating activities, a company must convert net income from an accrual basis to a cash basis under

C) both the direct method and the indirect method.

Bonds that may be exchanged for common stock at the option of the bondholders are called

C) convertible bonds.

Depreciation is a process of

C) cost allocation.

Sales taxes collected by a retailer are recorded by

C) crediting Sales Taxes Payable.

The current ratio is

C) current assets divided by current liabilities

On July 1 the Fisher Shoe Store paid $24,000 to Acme Realty for 6 months rent beginning July 1. Prepaid Rent was debited for the full amount. If financial statements are prepared on July 31, the adjusting entry to be made by the Fisher Shoe Store is:

C) debit Rent Expense, $4,000; credit Prepaid Rent, $4,000.

Greese Company purchased office supplies costing $7,000 and debited Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $2,500 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be:

C) debit Supplies Expense, $4,500; credit Supplies, $4,500.

An aging of a company's accounts receivable indicates that $9,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $2,400 credit balance, the adjustment to record bad debts for the period will require a

C) debit to Bad Debt Expense for $6,600.

The entry to record the return of goods from a customer would include a

C) debit to Sales Returns and Allowances.D) credit to Sales Returns and Allowances

When an account is written off using the allowance method, accounts receivable

C) decreases and the allowance account decreases.

An employee assigned to counting computer monitors in boxes should

C) determine that the box contains a monitor.

Debts and obligations of a business are referred to as

C) liabilities.

The receipt of cash n advance from a customer

C) increases assets and liabilities

A business organized as a corporation

C) is owned by its stockholders.

Financing activities involve

C) issuing debt.

After a business transaction has been analyzed and entered in the journal, the next step in the recording process is to transfer the information to

C) ledger accounts.

The primary purpose of the statement of cash flows is to

C) provide information about the cash receipts and cash payments during a period.

Unearned Rent Revenue is

C) reported as a current liability.

Joe is a warehouse custodian and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates

C) segregation of duties is violated.

The normal balance of any account is the

C) side which increases that account.

Depreciation is the process of allocating the cost of a plant asset over its useful life in a(n)

C) systematic and rational manner.

A retailer that collects sales taxes is acting as an agent for the

C) taxing authority.

A change in the estimated useful life of equipment requires

C) that the amount of periodic depreciation be changed in the current year and in future years.

The left side of an account is

C) the debit side.

The LIFO inventory method assumes that the cost of the latest units purchased are

C) the first to be allocated to cost of goods sold.

Notes or accounts receivables that result from sales transactions are often called

C) trade receivables.

Significant noncash transactions would not include

C) treasury stock acquisition.

Using the following balance sheet and income statement data, what is the earnings per share?

C)$2.80

Charlene Cosmetics Company just began business and made the following four inventory purchases in June: A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the average cost method, the amount allocated to the ending inventory on June 30 is

D) $1,680

What causes the balance on the bank statement to differ from the ca sh balance in the general ledger?

D) All of these answer choices are correct.

A factory machine was purchased for $140,000 on January 1, 2017. It was estimated that it would have a $28,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. If the actual number of machine hours ran in 2017 was 4,000 hours and the company uses the units-of- activity method of depreciation, the amount of depreciation expense for 2017 would be

D) $11,200.

A retail store credited the Sales Revenue account for the sales price and the amount of sales tax on sales. If the sales tax rate is 5% and the balance in the Sales Revenue account amounted to $294,000, what is the amount of the sales taxes owed to the taxing agency?

D) $14,000

Quiet Phones Company has the following inventory data: A physical count of merchandise inventory on July 30 reveals that there are 48 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is

D) $2,070.

An analysis and aging of the accounts receivable of Watts Company at December 31 reveal these data: What is the cash realizable value of the accounts receivable at December 31 after adjustment?

D) $2,940,000

For 2017 Fielder Corporation reported net income of $32,000; net sales $400,000; and average share outstanding 16,000. There were no preferred dividends. What was the 2017 earnings per share?

D) $2.00

Wilton sells softball equipment. On November 14, they shipped $4,000 worth of softball uniforms to Paola Middle School, terms 2/10, n/30. On November 21, they received an order from Douglas High School for $2,400 worth of custom printed bats to be produced in December. On November 30, Paola Middle School returned $400 of defective merchandise. Wilton has received no payments from either school as of month end. What amount will be recognized as net accounts receivable on the balance sheet as of November 30?

D) $3,600

Piper Pipes has the following inventory data: Assuming that a periodic inventory system is used, what is the cost of goods sold on a LIFO basis?

D) $38,530

Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment. Eddie Auto Supplies Balance Sheet December 31, 2017

D) $564,000

Sampson Company's accounting records show the following for the year ending on December 31, 2017. Using the periodic system, the cost of goods purchased is

D) $691,620.

Financial information is presented below: The profit margin would be

D) .10

Of a company fails to adjust a Prepaid Rent account for rent that has expired, what effect will this have on that month's financial statements?

D) Assets will be overstated and net income and stockholders' equity will be overstated.

Which accounts normally have debit balances?

D) Assets, expenses and revenues.

Which of the following represents the largest number of common shares?

D) Authorized shares.

An accountant has debited an asset for $1,000 and credited a liability account for $500. What can be done to complete the recording of the transaction?

D) Credit a different asset account for $500

Which one of the following would not be considered an advantage of the corporate form of organization?

D) Government regulation.

Of the following companies, which one would not likely employ the specific identification method for inventory costing?

D) Hardware store

S. Lawyer performed legal services for E. Corp. Due to a cash shortage, an agreement was reached whereby E. Corp. would pay S. Lawyer a legal fee of approximately $20,000 by issuing 8,000 shares of its common stock (par $1). The stock trades on a daily basis and the market price of the stock on the day the debt was settled is $2.40 per share. Given this information, the best journal entry for E. Corp. to record for this transaction is

D) Legal Expense 19,200 Common Stock 8,000 Paid-in Capital in Excess of Par - Common 11,200

Which one of the following affects cash during a period?

D) Payment of an accounts payable.

Which of the following would not create a cash flow?

D) The company converts bonds into common stock.

A gain or loss on disposal of a plant asset is determined by comparing the

D) book value of the asset with the proceeds received from its sale.

Under the allowance method of accounting for bad debts, why must uncollectible accounts receivable be estimated at the end of the accounting period?

D) To match bad debt expense to the period in which the revenues were earned.

Treasury stock is

D) a corporation's own stock, which has been reacquired and held for future use.

The balance in the Accumulated Depreciation account represents the

D) amount charged to expense since the acquisition of the plant asset

A debit to an asset account indicates a(n)

D) increase in the asset.

The account Allowance for Doubtful Accounts is classified as a(n)

D) contra account to Accounts Receivable.

In a classified balance sheet, assets are usually classified as

D) current assets; long-term investments; property, plant, and equipment; and intangible assets.

The primary difference between a periodic and perpetual inventory system is that a periodic system

D) determines the inventory on hand only at the end of the accounting period.

Intangible assets are the rights and privileges that result from ownership of long-lived assets that

D) do not have physical substance.

A current asset is

D) expected to be converted to cash or used in the business within a relatively short period of time.

The statement of cash flows would disclose the payment of a dividend

D) in the financing activities section.

Stan's Market recorded the following events involving a recent purchase of inventory: As a result of these events, the company's inventory

D) increased by $115,848.

A revenue account

D) is increased by credits.

Which of the following methods will result in the highest depreciation in the first year?

D)Declining-balance

Earnings available to common stockholders is equal to

D) net income-preferred dividends.

Adjusting entries affect at least:

D) one income statement account and one balance sheet account.

A small neighborhood barber shop that is operated by its owner would likely be organized as a

D) proprietorship.

The journal entry to record a credit sale ignoring cost of goods sold is

D)Accounts Receivable Sales Revenue

When using the balance sheet approach, the balance in Allowance for Doubtful Accounts must be considered prior to the end of period adjustment when using which of the following methods?

D)Allowance method