accounting final
the entry to record a stock dividend depends on its size. which of the following percentages is the upper limit for a stock dividend to be classified as a small stock dividend?
25%
revenue is 400,000 and cogs is 100,000. how much is the gross profit percentage?
75%
the entry to record depreciation includes a debit to which account?
Depreciation expense
which of the following is paid by both the employee and the employer?
FICA
on which of the following dates does a 3-month note dated November 12 mature?
February 12
Joe purchased office equipment for $1,250 cash. What is the effect on accounts?
One asset account increases: another asset account decreases
which of the following describes a serial bond?
a bond that repays principal in installments
which of the following items is included in the journal entry if a company sells equipment at a price greater than its book value?
a credit to gain on sale of equipment
sales revenue for a sporting goods store amounted to 215,000 for the current period. all sales are on account and are subject to sales tax of 7%. which of the following would be included in the journal entry to record these sales?
a debit to accounts receivable for 230,050
which of the following is included in the entry to record warranty expense?
a debit to warranty expense
a check of 75 deposited by a company was returned to the bank for nonsufficient funds. how would this information be included on the bank reconciliation?
a deduction on the book side
the bank charges a service fee of 20. how would this information be included on the bank reconciliation?
a deduction on the book side
which of the following items will NOT appear on the book side of the reconciliation?
a deposit was in transit
a debt that a corporation owes to an outside party is called
a liability
which of the following is TRUE of a premium on bonds payable?
a premium on bonds payable is added to the bonds payable balance and shown with long-term liabilities on the balance sheet
How do you CORRECTLY describe a trial balance?
a trial balance is a list of all accounts with their balances
under a perpetual inventory system, which of the following would NOT be required?
a weekly count of the inventory
which of the following is a contra account
acc. dep
in a typical chart of accounts, what information is provided along with the account name?
account number
a purchase return of goods purchased on credit is recorded by the purchasing company as a debit to what account?
accounts payable
which of the following is an amount for products or services purchased on account?
accounts payable
a business renders services to a customer for 16,000 on account. which account is debited?
accounts receivable
which is NOT an example of a temporary account?
accumulated depreciation
paid-in capital consists of:
amounts received from stockholders
the bank recorded a 2,000 deposit as 200. how would this information be included on the bank reconciliation?
an addition on the bank side
the bank collected a note receivable of 1000. how would this information be included on the bank reconciliation?
an addition on the book side
what is the correct accounting equation?
assets = liabilities + stockholders' equity
for AR, the category of account and its normal balance are:
assets and a debit balance
which of the following is the amount of stockholders' equity on the company's ledger for each share of stock?
book value
which of the following assets is NOT an intangible asset?
building
which of the following statements is TRUE? a. notes receivable are always due in 30 days b. accounts receivable are more liquid than cash c. notes receivable are longer in term than accounts receivable d. accounts receivable are liabilities
c. notes receivable are longer in term than accounts receivable
adjusting entries NEVER involve
cash
which of the following would be included in the entry to record the issuance of 5,000 shares of 10 par value common stock at 13 per share cash?
cash would be debited for 65,000
there are relatively few types of revenue. which of the following is NOT a type of revenue? common stock, sales, service, or interest
common stock
which of the following accounts increases with a credit?
common stock
posting a transaction means
copying the information from the journal to the ledger
corporate ownership is a very popular type of ownership in the United States because
corporate shareholders have limited liability for the debts of the corporation
the largest businesses are usually organized as
corporations
Which of the following concepts (principles) would require that an item be recorded at the amount actually paid rather than at estimated market value?
cost principle
which of the following are the normal balances of sales, sales disc, and sales returns and allow, respectively?
credit, debit, debit
which of the following is used for market when valuing inventory at lower-of-cost-or-market?
current replacement price
a business pays salaries of 140,000 on the 1st and 15th day of every month. which of the following is the adjusting entry required on Dec 31?
debit 140,000 to salaries exp and a credit of 140,000 to sal pay
on january 1, 2013, davie services issued 20,000 of 8% bonds that mature in five years. they were sold at discount for a total of 19,000 on january 1, 2018. when the bonds mature, davie services will make the final principal payment. that entry will be which of the following
debit bonds payable for 20,000 and credit cash for 20,000
a company sold merchandise for 350 that cost 221. the entry to record the cost of the merchandise sold would be a
debit to COGS and a credit to inventory for 221
which of the following items found on a bank reconciliation does NOT require an adjusting entry?
deposit in transit
which of the following accounts will be closed by debiting the income summary?
depreciation expense
which of the following depreciation methods does NOT use a residual value in the depreciation formula?
double-declining-balance
which of the following depreciation methods writes off more depreciation near the start of an asset's life than in later years?
double-declining-balance
which of the following would be considered an interim accounting period?
either one month or one quarter
in accounting, the matching principle means to match which of the following?
expenses to revenues
under which of the following inventory costing methods is the COGS based on the cost of the oldest purchases?
first-in, first-out
where can closing entries be found?
in a company's general journal
which of the following occurs when a company records accrued interest expense on a note payable?
interest payable is credited
which of the following describes retained earnings?
internally generated capital that results from profitable business transactions
which of the following is TRUE of a contingent liability?
it is a potential liability that depends on a future event
what is inventory?
items held by a company to be sold to customers
accountants first record transactions in the
journal
which of the following is the most basic internal control for cash?
keeping money in a bank account
which of the following asset categories would include fencing?
land improvements
which of the following inventory costing methods yields the highest cost of goods sold when costs are rising during the accounting period?
last-in, first-out
which of the following inventory costing methods yields the lowest ending inventory when costs are rising during the accounting period?
last-in, first-out
which of the following groups of accounts BOTH normally have a credit balance?
liabilities and stockholders' equity
which of the following principles requires that warranty expense be recorded in the period taht revenue is recorded?
matching principle
face value of a note payable plus total interest is called
maturity value
which of the following assets does a merchandising company but NOT a service company need?
merchandise inventory
which of the following is a TRUE statement?
neither a stock split nor a stock dividend will increase total stockholders' equity
which of the following is a TRUE statement about no-par stock?
no-par stock is a form of common stock that does not carry par value
a bond payable is similar to which of the following?
note payable
Which of the following accounts is NOT an example of an asset?
notes payable
the two basic sources of equity are:
paid-in capital and retained earnings
which of the following describes the par value of stock?
par value is a nominal, or minimal, amount assigned to shares of stock by the corporation
which of the following is the amount the borrower must pay back to the bondholders?
principal amount
the account to be debited when a stock dividend is declared and distributed on the same date would be
retained earnings
a company originally issued 10,000 shares of 5 par value common stock at 7 per share. the board of directors declares a 10% stock dividend when the market price of the stock is 9 a share. which of the following is included in the entry to record the stock dividend?
retained earnings is debited for 9,000
which of the following occurs when a corporation's board of directors distributes a 10% stock dividend
retained earnings will be debited for the new shares times the current market value of the stock
which of the following do NOT show up on a post-closing trial balance?
revenues and expenses
which of the following is a benefit of selling on credit?
revenues are increased by making sales to a wider range of customers
which of the following statements about revenue is CORRECT?
revenues increase stockholders' equity, so a revenue account's normal balance is a credit balance
which of the following accounts are temporary accounts that must be closed at the end of the year?
revenues, expenses, and dividends
keeping office supplies under lock and key is representative of
safeguarding assets
which of the following adj balances would appear in the balance sheet credit column of a worksheet? a. equipment b. insurance exp c. sal pay d. rent revenue
sal pay
which of the following accounts will be closed by crediting the income summary?
service revenue
which of the following inventory costing methods is based on the actual cost of each particular unit of inventory?
specific-unit-cost
the purpose of the depreciation adj is to
spread the cost invested in an asset over its useful life
which of the following describes preferred stock?
stock which gives shareholders certain preferences and advantages over common stock
by definition, what represents the owners of a corporation?
stockholders
which of the following depreciation methods allocates an equal amount of depreciation to each year?
straight-line
a record that contains the details by customer or vendor of the individual account balances would be called a
subsidiary ledger
a company uses the perpetual inventory method. which of the following entries would be made to record a purchase of inventory on account?
the accounting entry would be a debit to inventory and a credit to accounts payable
which of the following are the two methods of estimating uncollectible receivables?
the aging-of-accounts-receivable method and the percent-of-sales method
which of the following occurs when a bond's stated interest rate is less than the market interest rate?
the bond will be issued at a discount
accrued revenue is revenue that
the business has earned, but not collected
which of the following is TRUE if the income statement debit column exceeds the income statement credit column on a worksheet?
the company has a net loss
which of the following describes the term maturity date?
the date on which the principal amount is repaid to the bondholder
which of the following best describes other gains (losses) on the income statement?
the gains and losses from transactions that are not part of the normal operations of the business
which of the following occurs due to a 4 for 1 stock split?
the par value of each share of common stock is 25% of the par value before the split
which of the following statements is TRUE?
the purchase of treasury stock decreases assets and decreases stockholders' equity
in the credit terms of 2/10, n/30, what does the 2/10 mean?
the purchaser may take a 2% discount if the invoice is paid in 10 days
which of the following describes the term outstanding stock?
the shares of stock that are held by the stockholders
which of the following will happen to a stockholder's percentage ownership in the stock of a corporation when the corporation declares a stock dividend?
the stockholder's percentage ownership stays the same
which of the following statements is a TRUE statement concerning the worksheet
the worksheet is a document used to summarize data to prepare the financial statements
which of the following would be a reason for a company to appropriate a portion of retained earnings?
to limit the amount of retained earnings available for dividends in order to retain sufficient funds for growth
a corporation originally issued 8 par value stock for 9 per share. it purchased the stock for 10 per share for the treasury. which of the following would be included in the entry to record the reissue of 20 shares of treasury stock fro 11 per share?
treasury stock is credited for 200
which of the following entries would be used to account for uncollectible receivables using the write-off method?
uncollectible accounts expense is debited and accounts receivable is credited
if a company is using the cash-basis method of accounting, when is revenue recorded?
when cash is received, either prior to the services being rendered or at a time after the services were rendered
if a company is using the accrual method of accounting, when is revenue recorded?
when services are rendered, even though cash may be received at a later date
