Acct Multiple choice

Depreciation is the process of

allocating the cost of an asset to the periods in which it is used.

When is a physical inventory usually taken?

at the end of the company fiscal year

Under the perpetual inventory system, in addition to making the entry to record a sale, a company would

debit cost of goods sold and credit inventory

Expenses are recognized when

they contribute to the production of revenue

Accounts often need to be adjusted because

many transactions affect more than one time period

Which of the following is an example of a deferral adjusting entry? -accrued expense -Accrued revenue -prepaid expense

prepaid expense

a credit sale of $3,800 is made on April 25, terms 2/10, net/30, on which a return of $200 is granted on April 28. what amount is received as payment in full on may 4?

$3,528

La more company had the following transactions during 2016: -sales of $9,000 on account -collected $4,000 for services to be performed in 2017 -paid $3,750 cash in salaries for 2016 -purchased airline tickets for $500 in December for a trip take place in 2017 What is la mores 2016 net income using accrual accounting?

$5,250

The following information was available for Bowyer company at December 31, 2017; beginning inventory $90,000; ending inventory $70,000; cost of goods sold $800,000; and sales $1,100,000. Bowyers inventory turnover in 2017 was

10 times

Which statement is correct concerning the adjusted trial balance? A) an adjusted trail balance eliminates the need for the preparation of financial statements B) The purpose of an adjusted trial balance is to prove the equality of the total debit balances and the total credit balances in the ledger C) An adjusted trial balance will contain only permanent - balance sheet - accounts. D) The adjusted trail balance is prepared after the adjusting entries have been journalized but before they been posted

B) the purpose of an adjusted trial balance is to prove the equality of the total debit balances and the total credit balances in the ledger

Greese company purchases 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:

Debit supplies expense, $4,500; credit supplies, $4,500

Which of the following companies would be most likely to use a perpetual inventory system? -grain company -beauty salon -clothing store -fur dealer

Fur dealer

Which of the following should not be included in the physical inventory of a company?

Goods held on consignment from another company

Under a perpetual inventory system

accounting records continuously disclose the amount of inventory

On July1 the Fisher shoe store paid $24,000 to Acme Reality for 6 months rent beginning July 1. Prepaid Rent was debited for the full amount. If financial statements are prepared on July 31st, the adjusting entry to be made by the fisher shoe store is:

debit rent expense, $4,000, credit prepaid rent, $4,000

Reeves Company is taking a physical inventory on March 31, the last day of its fiscal year. Which of the following must be included in this inventory count?

goods that Reeves is holding in inventory on march 31st for which the related accounts payable is 15 days past due

Tonys market recorded the following events involving a recent purchase of inventory: -Received goods for $80,000, terms 2/10, n/30. -returned $1,600 of the shipment for credit. paid $400 freight on the shipment - paid the invoice within the discount period. as a result. of these events, the company inventory

increased by $78,800

The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit

purchase returns and allowances

which of the following accounts is classified as a contra revenue account? - sales revenue - cost of goods sold - sales returns and allowances -purchase discounts

sales returns and allowances

gross profit equals the difference between

sales revenue - cost of goods sold

The revenue recognition principle dictates that revenue should be recognized in the accounting records:

when the performance obligation is satisfied