Accounting 201 Final

Freight cost to deliver goods to customers reported as an operating expense

Freight-out

Which depreciation method would result in the lower total reported income over the period?

Neither, both would result in same amoung

The Bluejay Company has four plants nationwide that cost $450 million. Accumulated depreciation on the plants is $100 million at December 31, 2022. The current fair value of the plants at that date is $300 million. The plants will be reported on the December 31, 2022 balance sheet at a. $350 million. b. $700 million. c. $300 million. d. $600 million

a. $350 million.

If Wheaties company issues 10,000 shares of $5 par value common stock for $210,000 the account: a. Common stock will be credited for $50,000 b. Paid in capital in excess of par value will be credited for $50,000 c. Paid in capital in excess of par value will be credited for $210,000 d. Cash will be debited for $160,000

a. Common stock will be credited for $50,000

Earnings per share is a a. profitability ratio. b. liquidity ratio. c. solvency ratio. d. trending ratio.

a. profitability ratio.

Which of the following is NOT a right or preference associated with preferred stock? a. the right to vote b. first claim to dividends c. preference to corporate assets in case of liquidation d. to receive dividends in arrears before common stockholders receive dividends

a. the right to vote

Biscuit Corporation issued a one year 10% $400,000 note on April 30, 2022. Assuming that the company only accrues interest at year-end, the interest expense to be recorded at December 31, 2022 is: a. $36,000 b. $26,667 c. $40,000 d. $27,000

b. $26,667

The following data is available for Puffs Corporation at December 31, 2017: Common Stock, par $10 (authorized 30,000 shares) $270,000 Treasury Stock (at cost $15 per share) $1,200 Based on the data how many shares of common stock are issued? a. 30,000 b. 27,000 c. 29,920 d. 26,920

b. 27,000

9. Which of the following is not considered an asset? a. Equipment b. Dividends c. Accounts receivable d. Inventory

b. Dividends

4. The usual sequence of steps in the transaction recording process is a. journalize, analyze, post to the ledger. b. analyze, journalize, post to the ledger. c. journalize, post to the ledger, analyze. d post to the ledger, journalize, analyze.

b. analyze, journalize, post to the ledger.

When a company performs a service but has not yet received payment, it a. debits Service Revenue and credits Accounts Receivables b. debits Accounts Receivables and credits Service Revenue c. debits Service Revenue and credits Accounts Payable d. makes no entry until cash is received

b. debits Accounts Receivables and credits Service Revenue

The acquisition of treasury stock by a corporation: a. increases its total assets and total stockholders equity b. decreases its total assets and total stockholders equity c. has no effect on total assets and total stockholders equity d. requires that a gain or loss be recognized on the income statement

b. decreases its total assets and total stockholders equity

Paid-in capital in Excess of par value: a. is credited when no par stock doesn't have a stated value b. is reported as part of paid in capital on the balance sheet c. represents the amount of legal capital d. normally has a debit balance

b. is reported as part of paid in capital on the balance sheet

The board of directors of Crunch Company declared a cash dividend on November 15, 2017, to be paid on December 15, 2017 to stockholders owning the stock on November 30, 2017. Given these facts, the date of November 30 2017 is referred to as the: a. declaration date b. record date c. payment date d. ex-dividend date

b. record date

During January 2022, 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 a. $0 b. $6,800 credit c. $4,800 credit d. $2,000 credit

c. $4,800 credit

Cheerios packaging corporation began business in 2021 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, 2021 balance sheet, Cheerios would report: a. Common stock of $500,000 b. Common stock of $250,000 c. Common stock of $400,000 d. Paid in capital of $330,000

c. Common stock of $400,000

A donut shop makes a large sale for $300 on November 30. The customer is sent a statement on December 5 and a check is received on December 10. The donut shop follows GAAP and applies the revenue recognition principle. When is the $300 considered earned? a. December 5 b. December 10 c. November 30 d. December 1

c. November 30

Which of the following is an example of a deferral adjusting entry? a. Accrued Expense b. Accrued Revenue c. Prepaid Expense d. All of the choices are correct

c. Prepaid Expense

Inventory system where company determines the COGS each time a sale occures

perpetual inventory system

A corporation purchases 20,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders equity? a. increase by $700,000 b. decrease by $400,000 c. decrease by $700,000 d. decrease by $300,000

c. decrease by $700,000

Accrued expenses are: a. paid and recorded in an asset account before they are used or consumed b. paid and recorded in an asset after they are used or consumed c. incurred but not yet paid or recorded d. incurred and already paid or recorded

c. incurred but not yet paid or recorded

An item is considered material if a. it does not cost a lot of money. b. it is of a tangible good. c. its size is likely to influence the decision of an investor or creditor. d. the cost of reporting the item is greater than its benefits.

c. its size is likely to influence the decision of an investor or creditor.

Which of the following statements is Not considered a disadvantage of the corporate form of organization? a. additional taxes b. government regulations c. limited liability of stockholders d. separation of ownership and management

c. limited liability of stockholders

In recording an accounting transaction in a double-entry system, a. the number of debit accounts must equal the number of credit accounts. b. there must always be entries made on both sides of the accounting equation. c. the amount of the debits must equal the amount of the credits. d. there must only be two accounts affected by any transaction.

c. the amount of the debits must equal the amount of the credits.

If an individual asset is increased, then.... a. there could be an equal decrease in a specific liability. b. there could be an equal decrease in stockholders' equity. c. there could be an equal decrease in another asset. d. None of these answer choices are correct.

c. there could be an equal decrease in another asset.

an account that is offset against a revenue account on the income statement

contra revenue

specifies the amount of cash discount and time period during which it is offered

credit terms

These are selected account balances on December 31, 2022. Land $150,000 Land (held for future use) $225,000 Buildings $1,200,000 Inventory 300,000 Equipment 675,000 Furniture 150,000 Accumulated Depreciation 450,000 What is the total amount of property, plant, and equipment that will appear on the balance sheet? a.)$2.250.000 b)$1,950,000 c)$2,700,000 d) $1,725,000

d) $1,725,000

Wolf Company had the following transactions during 2021: Sales of $10,800 on account Collected $4,800 for services to be performed in 2022 Paid $2,600 cash in salaries for 2021 Purchased airline tickets for $600 in December for a trip to take place in 2022 What is Wolf's 2021 net income using accrual accounting? a. $8,800 b. $13,600 c. $13,000 d. $8,200

d. $8,200

Which of the following is generally not classified as a current liability? a. Salaries and Wages Payable b. Accounts Payable c. Taxes Payable d. Bonds Payable.

d. Bonds Payable.

All of following are assumptions within the FAB accounting standards, except for a. Periodicity Assumption b. Going Concern Assumption c. Monetary Unit Assumption d. GAAP Assumption

d. GAAP Assumption

3. If a company buys a $500 machine on account, this transaction will affect the d. income statement and retained earnings statement only. b. income statement only. c. income statement retained earnings statement and balance sheet. d. balance sheet only.

d. balance sheet only.

Liabilities are generally classified on a balance sheet as a. small liabilities and large liabilities. b. present liabilities and future liabilities. c. tangible liabilities and intangible liabilities. d. current liabilities and long-term liabilities.

d. current liabilities and long-term liabilities.

2. The payment of a liability a. decreases assets and stockholders' equity. b. increases assets and decreases liabilities. c. decreases assets and increases liabilities. d. decreases assets and liabilities.

d. decreases assets and liabilities.

All of the following statements about preferred stock are true except: a. preferred stock will have a paid in capital account that is separate from other stock b. preferred stock is presented first on the stockholders equity section c. preferred stock can be either par value or no-par value d. there can be only one class of preferred stock

d. there can be only one class of preferred stock

In a classified balance sheet, assets are usually classified as a. current assets; long-term assets; property, plant, and equipment; and intangible assets. b. current assets; long-term investments; property, plant, and equipment; and common stocks. c. current assets; long-term investments; tangible assets; and intangible assets. d.current assets; long-term investments; property, plan, and equipment; and intangible assets.

d.current assets; long-term investments; property, plan, and equipment; and intangible assets.

gross profit divided by net sales

gross profit rate

a cash discount claimed by a buyer for prompt payment of a balance due

purchase discount

A reduction given by a seller for prompt payment of a credit sale.

sales discount

provides support for a credit sale

sales invoice

Which depreciation method would result in the lower reported income in the first year?

straight line