Accounting

Amounts owed

Liabilities

A company purchased new equipment for $60,000. The company paid cash for the equipment. Other costs associated with the equipment were: transportation costs, $1,000; sales tax paid, $3,000; and installation cost, $2,500. The total capitalized cost reported for the equipment was:

$66,500.

Change in total assets of Kellogg's = Increase in stockholder's equity - Decrease in liabilities = $ 0.02 billion - $ 0.34 billion

- $ 0.32 billion

the PRIMARY functions of accounting are to:

-measure a company's activities-communicate info to decision makers

Below are the steps in the measurement process of external transactions. Arrange them from first (1) to last (6).

-use source documents to identify accounts affected by an external transaction -analyze the impact of the transaction on the accounting equation -assess whether the transaction results in a debit or credit to account balances -record the transaction in a journal using debits and credits -post transactions to the general ledger -prepare a trial balance

Stockholders equity of ExxonMobil = Total Assets - Total Liabilities = $ 228 billion - $ 107 billion

121 billion

When $2,500 of accounts receivable are determined to be uncollectible, which of the following should the company record to write off the accounts using the allowance method?

A debit to Allowance for Uncollectible Accounts and a credit to Accounts Receivable

A(n) _______________ summarizes all transactions related to a particular item over a period of time.

Account

Resources of a company

Assets

The accounting equation is defined as:

Assets = Liabilities + Stockholders' Equity.

The University of Nebraska football stadium is the third largest city in the state of Nebraska on game days. The stadium has sold out every game since the late 1960s. The seating capacity is about 80,000 fans. Assume the stadium sells out all six home games before the season begins, and the athletic department collects $38.4 million in ticket sales. Required: 1. What is the average price per season ticket and average price per individual game ticket sold? 2. & 3. Record the advance collection of $38.4 million in ticket sales and the revenue earned after the first home game is completed.

Average price per season ticket$480selected answer correctAverage price per individual game ticket$80selected answer correct 1Cashselected answer correct38,400,000selected answer correctnot attemptedDeferred Revenueselected answer correctnot attempted38,400,000selected answer correct22Deferred Revenueselected answer correct6,400,000selected answer correctnot attemptedSales Revenueselected answer correctnot attempted6,400,000selected answer correct

The financial statement that summarizes revenues and expenses for a period of time is the

Blank 1: income Blank 2: statement

Change in cash

Cash Flow Statement

A company's petty cash refers to:

Cash on hand to pay for minor purchases.

Prepayments occur when:

Cash payment (or an obligation to pay cash) occurs before the cost is used in running the business.

The statement of stockholders' equity includes which of the following for the period?

Changes in stockholders' equity accounts.

Entity Legally Separate from its owners

Corporation

Cost of Goods Sold is a(n):

Expense account.

Nearly all research and development costs should be:

Expensed in the period incurred.

Costs of selling products or services

Expenses

Sales taxes collected by a company on behalf of the state and local governments are recorded as a(n):

Liability.

An adjusted trial balance is a:

List of all accounts and their balances after adjusting entries.

In accounting, goodwill:

May be reported only when one company acquires another company.

Oswego Clay Pipe Company provides services of $46,000 to Southeast Water District #45 on April 12 of the current year with terms 1/15, n/60. What would Oswego record on April 12?

Option A

business Owned by Two or More Persons

Partnership

The current portion of long-term debt should be:

Reported as a current liability in the balance sheet.

Liabilities are defined as:

Resources owed by an entity as a result of past transactions.

Under accrual-basis accounting:

Revenue should be recorded in the period goods and services are provided.

Sale of products or services

Revenues

Owners' claim to resources

Stock holders' equity

Owners' claims to the company's resources are referred to as:

Stockholders' equity.

Provide information about resources and claims to resources

YES

Provide information to help users in predicting future cash flows

YES

provide information that is useful to investors and creditors

YES

Equipment= Equipment used for operations.

[Balance Sheet- Asset].

Land= Property used for operations.

[Balance Sheet- Asset].

Supplies= Purchase of office supplies.

[Balance Sheet- Asset].

Interest Payable= Amount of interest owed on borrowing.

[Balance Sheet- Liability].

Salaries Payable= Amounts owned to employees.

[Balance Sheet- Liability].

Ending retained earnings is calculated as

beginning retained earnings + net income - dividends

Stockholders' equity arises primarily from amounts invested by shareholders and amounts Blank______.

earned by the corporation

Total Assets of Citigroup = Total Liabilities + Stockholder's Equity = $ 1,500 billion + $ 110 billion

$ 1,610 billion

Total Liabilities of Amazon.com = Total Assets - Stockholder's Equity = $ 4.7 billion - $ 0.3 billion

$ 4.40 billion

Change in stockholder's equity of Nike = Increase in Assets - Increase in Liabilities = $ 1.2 billion - $ 0.3 billion

0.9 billion

Diamond Autobody purchased new equipment for $90,000. Residual value at the end of an estimated four-year service life is expected to be $10,000. During the four-year period, the company expects to use the equipment a total of 5,000 hours. Actual use per year was as follows: YearHours Used11,20021,40031,50041,100 Required: Prepare a depreciation schedule for four years using the straight-line method. Prepare a depreciation schedule for four years using the double-declining-balance method. Prepare a depreciation schedule for four years using the activity-based method.

20,000selected answer correct$20,000selected answer correct$70,000selected answer correct220,000selected answer correct40,000selected answer correct50,000selected answer correct320,000selected answer correct60,000selected answer correct30,000selected answer correct420,000selected answer correct80,000selected answer correct10,000selected answer correctTotal$80,000 45,000selected answer correct$45,000selected answer correct$45,000selected answer correct222,500selected answer correct67,500selected answer correct22,500selected answer correct311,250selected answer correct78,750selected answer correct11,250selected answer correct41,250selected answer correct80,000selected answer correct10,000selected answer correctTotal$80,000 19,200selected answer correct$19,200selected answer correct$70,800selected answer correct222,400selected answer correct41,600selected answer correct48,400selected answer correct324,000selected answer correct65,600selected answer correct24,400selected answer correct414,400selected answer correct80,000selected answer correct10,000selected answer correctTotal$80,000

The full set of procedures used to accomplish the measurement/communication process of financial accounting is referred to as the:

Accounting cycle.

For each account, indicate (1) the type of account and (2) whether the normal account balance is a debit or credit.

Accounts Type of Account Normal Balance (Debit or Credit) 1. Salaries Payable Liability Credit 2. Common Stock Stockholders' Equity Credit 3. Prepaid Rent Asset Debit 4. Buildings Asset Debit 5. Utilities Expense Expense Debit 6. Equipment Asset Debit 7. Rent Expense Expense Debit 8. Notes Payable Liability Credit 9. Salaries Expense Expense Debit 10. Insurance Expense Expense Debit 11. Cash Asset Debit 12. Service Revenue Revenue Credit

Which of the following accounts would normally have a credit balance?

Accounts Payable, Service Revenue, Common Stock.

A perpetual inventory system measures cost of goods sold by:

Adjusting the Inventory account for each purchase and sale.

Which of the following is considered cash for financial reporting purposes?

All of the choices are correct.

Using a balance sheet approach to estimate bad debts involves calculating the desired ending balance in which account?

Allowance for uncollectible accounts

A note receivable is reported in the balance sheet:

As either a current asset or long-term asset depending on the expected collection date.

The accounts that represent the resources of the company are called:

Assets

On November 1, 2024, a company signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2025. What effect does receiving cash and signing a note have on the financial statements?

Assets increase and liabilities increase.

Independent intermediaries that help to ensure that management appropriately applies financial reporting rules in preparing the company's financial statements.

Auditors

The four primary financial statements published to provide information to external users include which of the following?

Balance Sheet Statement of Stockholders' Equity Income Statement Statement of Cash Flows

Resources equal creditors and owners claimes to those resoruces

Balance Sheet or Statement of Financial Position

Income Tax Payable= Amounts owned to IRS for taxes.

Balance Sheet- Liability].

Which financial statement provides information for a point in time only?

Balance sheet

FIFO is considered a balance-sheet approach for reporting inventory because it:

Better approximates the value of ending inventory.

The form of business organization that is legally separate from its owners is a:

Corporation.

Credit sales are recorded as:

Debit Accounts Receivable, credit Service Revenue.

When a company pays utilities of $1,760 in cash, the transaction is recorded as:

Debit Utilities Expense $1,760, credit Cash $1,760.

A gym offers one-year memberships for $99 and requires customers to pay the full amount of cash at the beginning of the membership period. For the gym, this is an example of a(n):

Deferred revenue.

Distributions to stockholders

Dividends

During 2024, Liberty Company has the following inventory transactions. DateTransactionsUnitsCostTotal CostJanuary 1Beginning inventory10$ 430$ 4,300April 9Purchase2247010,340October 4Purchase184007,200 50 $ 21,840January 1 to December 31Sales44 Because trends change frequently, Liberty estimates that the remaining six units have a net realizable value at December 31 of only $300 each. Required: Using FIFO, calculate ending inventory and cost of goods sold. Using LIFO, calculate ending inventory and cost of goods sold. Determine the amount of ending inventory to report using the lower of cost and net realizable value under FIFO. Record any necessary adjusting entry.

Ending inventory$2,400selected answer correctCost of goods sold$19,440selected answer correct Ending inventory$2,580selected answer correctCost of goods sold$19,260 Lower of Cost or NRVFIFO$1,800 1Cost of Goods Soldselected answer correct600selected answer correctnot attemptedInventoryselected answer correctnot attempted600selected answer correct

Which of the following is not an employer payroll cost?

Federal and state income taxes

Statements represent a company's primary means of communicating information to external users.

Finance,

Independent, private-sector group that is primarily responsible for setting financial reporting standards in the United States.

Financial Accounting Standards Board

Profitability of the company

Income Statement /Statement of Financial Performance

Which financial statement reports revenues and expenses?

Income statement

Which of the following are financial statements? (Select all that apply.)

Income statement Balance sheet Statement of stockholders' equity

On December 2, 2023, Quebecor Printing received cash from customers for online subscriptions to begin in 2024. What effect will receiving cash on December 2, 2023, have on the financial statements?

Increase assets and increase liabilities

Providing services and receiving cash will:

Increase assets and increase stockholders' equity.

Body that is attempting to develop a single set of high-quality, understandable global accounting standards.

International Accounting Standards Board

Which one of the following statements regarding the book value of an asset is correct?

It reflects the original cost of the asset less accumulated depreciation.

What is the primary purpose of financial accounting?

Measure business activities and communicate those measures to external users to make decisions

Companies that purchase inventories that are primarily in finished form for resale to customers are known as:

Merchandising companies.

Guarantee that businesses will not go bankrupt

NO

Maximize tax revenue to the federal government

NO

Prevent competitors from offering lower-priced products

NO

Gable Incorporated provides legal services. During 2024, the company provides services of $500,000 on account. Of this amount, $74,000 remains uncollected at the end of the year. An aging schedule as of December 31, 2024, is provided below. Age GroupAmount ReceivableEstimated Percent UncollectibleNot yet due$ 40,0005%0 to 30 days past due19,00010%31 to 60 days past due9,00020%More than 60 days past due6,00040%Total$ 74,000 Required: Calculate the allowance for uncollectible accounts. Record the December 31, 2024 adjusting entry, assuming the balance of Allowance for Uncollectible Accounts before adjustment is $500 (debit). On April 3, 2025, a customer's account balance of $600 is written off as uncollectible. Record the write-off. On July 17, 2025, the customer whose account was written off in Requirement 3 unexpectedly pays $200 of the amount but does not expect to pay any additional amounts. Re

Not yet due$2,000selected answer correct0 to 30 days past due1,900selected answer correct31 to 60 days past due1,800selected answer correctMore than 60 days past due2,400selected answer correctTotal$8,100 December 31, 2024Bad Debt Expenseselected answer correct8,600 Allowance for Uncollectible Accountsselected answer correct600selected answer correctnot attemptedAccounts Receivableselected answer correctnot attempted600selected answer correct July 17, 2025Accounts Receivableselected answer correct200selected answer correctnot attemptedAllowance for Uncollectible Accountsselected answer correctnot attempted200selected answer correct2July 17, 2025Cashselected answer correct200selected answer correctnot attemptedAccounts Receivableselected answer correctnot attempted200selected answer correct Required 3

In financial accounting which of the following are the three types of business activities of a company?

Operating activities Financing activities Investing activities

Simplex Corporation provides the following information at the end of the year: Salaries payable to workers at the end of the year$ 3,500Advertising expense for the year8,700Building that has been purchased70,000Supplies at the end of the year7,500Retained earnings at the end of the year38,000Utilities expense for the year4,200Note payable to the bank21,500Service revenue during the year67,800Salaries expense for the year24,200Accounts payable to suppliers6,700Dividends paid to stockholders during the year?Common stock that has been issued, including $8,000 that was issued this year30,000Cash remaining5,500Interest expense for the year1,800Accounts receivable from customers16,700

SIMPLEX CORPORATIONIncome StatementFor the year ended December 31Service Revenue$67,800Expenses:Advertising Expense$8,700Utilities Expense4,200Interest Expense1,800Salaries Expense24,200Interest Expense1,800Interest ExpenseTotal expenses40,700Net Income$27,100

Group that has been given power by Congress to enforce the proper application of financial reporting rules for companies whose securities are publicly traded.

Securities and Exchange Commission

Business Owned by a Single Person

Sole Proprietorship

Change in owner's claims to resources

Statement of Changes to Equity

When a company reports a gain on the sale of a depreciable asset, which of the following is always true?

The company sold the asset for more than its book value.

The lower of cost and net realizable value rule causes losses in the value of inventory to be recognized in the period when:

The value of inventory declines below cost.

The primary reason the balance of cash in the company's records will differ from the balance of cash in the bank's records includes:

Timing differences of recording cash transactions by the company and by the bank.

What is a direct purpose of internal controls?

To improve the accuracy and reliability of accounting information.

The primary purpose of closing entries is to:

Update the balance of Retained Earnings and prepare revenue, expense, and dividend accounts for next period's transactions.

Common Stock= Sale of common stock to investors.

[Balance Sheet- Stockholders' Equity].

Research and Development Expense= Cost of research and development.

[Income Statement- Expense].

Utilities Expense= Cost of utilities.

[Income Statement- Expense].

Service Revenue= Sales of services to customers.

[Income Statement- Revenue].

The system that maintains records of a company's operations and then communicates that information to decision makers is referred to as

accounting

Companies communicate information about their business activities primarily through

financial statements.

Retained earnings represents

the total net income earned over the life of the company that has not been distributed as dividends.