basic training

Which of the following is a contra-asset that is associated with accounts receivables

allowance for bad debts

Your company is remodels kitchens. Last month, a customer gave you a $1,000 deposit to remodel a kitchen When you complete the job, the customer pays you the additional $3,000. When you complete the job the journal entry would be:

not Cash $3,000 Unearned Revenue $1,000 Remodeling Expense $4,000 not re 3000 ap 3000 Response Feedback: Once you complete the remodel, you get to recognize revenue for the entire remodel. not cash 3, rev 4, ur 3

On January 1, your company signs a $1,000 3-month note payable, that charges 6% interest. What entry is made when the note is paid off? (You don't make adjusting journal entries for interest until year-end.)

not Note Payable $60 Interest Expense $1,000 Cash $1,015 or 1k, ap, 1015, 1060 or 1015, cash 15, cash 1000 Response Feedback: Remember Rate x Time x Principal, so .06 x 3/12 x 1,000 is the interest.

Your company remodels kitchens. A customer gives you a $1,000 deposit to remodel a kitchen next month. The entry when you receive the deposit is:

not Unearned Revenue $1,000 Cash $1,000 Response Feedback: It's not earned until the remodeling is done. not Re, UR. not cash, re. rev, rev

Sales returns and allowances

not increase expens. use contarevenue account.

A difference between accounts payable and notes payable is:

notes payable charge interest beginning when the note is issued while accounts payables offer discounts for paying early

Which of the following is NOT normally a current liability?

notes payable due in 3 years

Your company allows a customer to sign a $1,200 note receivable (increase asset) in rather than paying off a $1,200 past due account receivable (decrease asset). You will debit [account1] for $1,200 and credit [account2] for $1,200

notes rec , accounts rec

The difference between an account receivable and a note receivable is

notes receivables ordinarily charge interest

Which of the following is not an acceptable way to estimate uncollectible accounts?

percent of total assets

.

.

For the year, the balance in the equipment account is $100,000, the balance in depreciation expense is $15,000, and the balance in accumulated depreciation is $51,000. On the Balance Sheet, the Equipment portion should be shown as

0% For the year, the balance in the equipment account is $100,000, the balance in depreciation expense is $15,000, and the balance in accumulated depreciation is $51,000. On the Balance Sheet, the Equipment portion should be shown as: Equipment 100,000 Depreciation Expense 15,000 Accumulated Depreciation 51,000 0% Equipment, net 85,000 Accumulated Depreciation 51,000 Depreciation Expense 15,000 0% Accumulated Depreciation 51,000 Equipment 49,000 Equipment, net 100,000 0%

On January 1, 2016, you buy a building for $100,000 and believe it has a 20 year life. It has a $40,000 salvage value. What is the book value on January 1, 2019 if straight line depreciation is used?

100,000 - 40,000 = 60,000/20 = $3,000 per year x 3 years = 9,000 in Accumulated Depreciation. The original cost of $100,000 - 9,000 = 91,000 book value

You have a credit balance in the allowance for bad debts account of $100,000 before adjusting journal entries are made. Using the percentage of sales method, you calculate 2% of sales to be $119,000. Your adjusting journal entry should be for:

119,000

You have a balance in the allowance for bad debts account of $100,000 before adjusting journal entries are made. Using the aging of accounts receivables method, you calculate uncollectible receivables to be $119,000. Your adjusting journal entry should be for

19,000

You have a balance in the allowance for bad debts account of $100,000 before adjusting journal entries are made. Using the percentage of accounts receivables method, you calculate 2% of receivables to be $119,000. Your adjusting journal entry should be for:

19,000

A customer signs a note receivable for $1,000 on November 1 of this year. The note is for 8 months at 12%. Total interest revenue on this note receivable recognized this year (November and December) is

20

Your net accounts receivables totals $500,000. Your allowance for bad debts totals $25,000. The total of accounts receivables in your general ledger is

525,000

Net sales are $900,000. Cost of Goods Sold is $250,000, Salaries Expense is $100,000, and Tax Expense is $200,000. What is gross profit (gross margin)?

650000

A customer signs a note receivable for $1,000 on January 1. The note is for 8 months at 12%. Total interest revenue on this note receivable is:

80

freight-out

increases freight expense

Under the perpetual inventory system, you buy merchandise under the terms 2/10, n/30. You pay off a $100 account payable within the discount period. The entry when you pay for the merchandise is:

Accounts Payable 100 Cash 2 Inventory 98 1/3

Under the perpetual inventory system, you buy $300 in merchandise under the terms 2/10, n/30. You pay off a $300 account payable within the discount period. The entry when you make the payment is:

Accounts Payable 300 Cash 294 Inventory 6

Under the perpetual inventory system, you buy $4,500 of merchandise under the terms 2/10, n/30. You pay after the discount period. The entry made when you pay for the merchandise is:

Accounts Payable 4,500 Cash 4,500

Assuming a company is using the percent of accounts receivables method to estimate uncolletibles, when a company makes the adjusting journal entry the entry will be:

Bad Debt Expense Allowance for Bad Debts

Assuming a company is using the percent of sales method to estimate uncolletibles, when a company makes the adjusting journal entry the entry will be:

Bad Debt Expense Allowance for Bad Debts

To DECREASE inventory you:

CREDIT

Your company sells a car $20,000. The car originally cost you $45,000 and there is $30,000 of accumulated depreciation on the date of sale. The journal entry for the sale is:

Cash $20,000 Gain on Sale $30,000 Automobile $45,000 Loss on Sale $15,000 1/8 Cash $20,000 Gain on Sale $15,000 Automobile $45,000 Depreciation Expense $5,000 1/8 Cash $20,000 Gain on Sale $5,000 Automobile $45,000 Accumulated Depreciation $30,000 0% Cash $20,000 Depreciation Expense $30,000 Automobile $45,000 Accumulated Depreciation $5,000 50%

For the year, the balance in the equipment account is $100,000, the balance in depreciation expense is $15,000, and the balance in accumulated depreciation is $51,000. On the Balance Sheet, the Equipment portion should be shown as:

Depreciation Expense 15,000 Accumulated Depreciation 51,000 Equipment, net 85,000 0%

Depreciation expense on automobiles is recorded to:

Expense the original cost over the useful life of the car.

Contrasting straight line depreciation and double declining balance depreciation, over the life of an asset, you will:

Expense the same amount

Under the FIFO perpetual inventory system, given the information below, what would be January's Cost of Goods Sold be? Date Description Units Cost per Unit 1/1 Beginning Inventory 150 10.00 1/5 Bought Inventory 75 12.00 1/16 Sold Inventory 130 ?? 1/20 Bought Inventory 100 8.00 1/28 Sold Inventory 60 ??

FIFO - COGS 150 $ 10.00 $ 1,500 40 $ 12.00 $ 480 190 $ 1,980 (FIFO COGS is actually pretty easy. You know you sold 190 units this month. Since it's first in-first out, you'll sell the first 190 units in your table.)

Under the FIFO perpetual inventory system, given the information below, what would be January's Ending Inventory value? Date Description Units Cost per Unit 1/1 Beginning Inventory 150 10.00 1/5 Bought Inventory 75 12.00 1/16 Sold Inventory 130 ?? 1/20 Bought Inventory 100 8.00 1/28 Sold Inventory 60 ??

FIFO-- EI 35 $ 12.00 $ 420 100 $ 8.00 $ 800 135 $ 1,220

If we buy inventory FOB shipping point and freight costs $100, shipping costs:

Increase Inventory cost by $100

Under the perpetual inventory system, you sell merchandise under the terms 3/15, n/30. Your customer pays off their $2,000 account receivable within the discount period. The entry when you receive the payment is:

Inventory 1,940 Cost of Goods Sold 60 Accounts Receivable 2,000 Response Feedback: You need to zero out the A/R and you only get $1,940 in cash. 1/3

Under the perpetual inventory system, when you sell an item for $100 cash that only cost you $40 to buy, the entries would be:

Inventory 100 Accounts Payable 100 Cost of Goods Sold 40 Cash 40 Response Feedback: Assuming you plan to make money, Sales for the bigger number, COGS for the smaller one. 1/4

Under the perpetual inventory system, you buy $1,000 of merchandise under the terms 2/10, n/30. You return $250 of the merchandise for credit. The entry for the return is:

Inventory 250 Cost of Goods Sold 250 0/2 return expense , inventory 1/2

Last week you bought $500 worth of merchandise from your supplier on account. After receiving it, you return $100 worth of merchandise to the supplier. The journal entry when you received the goods is:

Inventory] $500 Accounts Payable $500 The journal entry when you returned the goods is: Cash $100 Inventory $100 Response Feedback: Take this one step by step. Cost of goods sold is a new account for us. It's one of the few expense accounts that doesn't end in the word 'expense'. However, if you think about the words separately, it makes perfect sense. It is the cost of the goods that we sold in this transaction. The cost is what we paid for the inventory. 3/4

There is a pending lawsuit against your company and you have a counter suit against the other party. A contingent liability is recorded when:

It is probably you will lose, and the amount you will pay is estimatable

Under the LIFO perpetual inventory system, given the information below, what would be January's Ending Inventory value? Date Description Units Cost per Unit 1/1 Beginning Inventory 150 10.00 1/5 Bought Inventory 75 12.00 1/16 Sold Inventory 130 ?? 1/20 Bought Inventory 100 8.00 1/28 Sold Inventory 60 ??

LIFO --EI 95 $ 10.00 $ 950 40 $ 8.00 $ 320 135 $ 1,270

Under the LIFO perpetual inventory system, given the information below, what would be January's Cost of Goods Sold value? Date Description Units Cost per Unit 1/1 Beginning Inventory 150 10.00 1/5 Bought Inventory 75 12.00 1/16 Sold Inventory 130 ?? 1/20 Bought Inventory 100 8.00 1/28 Sold Inventory 60 ??

LIFO-COGS 55 10.00 $ 550 75 12.00 $ 900 60 8.00 $ 480 190 $ 1,930

What probably did NOT occur to make you debited the account for that amount?

Made adjusting journal entry using percent of sales method is wrong? not made using the aging method

Ending Inventory is what type of account?

NOT expense You knew this one. Cost of Goods Sold is an expense.

Cost of Goods Sold normally goes:

On the Income Statement right after Net Revenues.

The Book Value or Carrying Value of Equipment is:

Original Cost Equipment - Accumulated Depreciation

Which of the following is an intangible asset?

Patents

Under the perpetual inventory system, you sell 100 items at $50 each of merchandise under the terms 3/15, n/30. Your customer returns 10 of those items for credit. (The cost of each item is $18.) The entries for the return is:

Sales Returns and Allowance 500 Accounts Recv. 500 Inventory 180 Cost of Goods Sold 180

sales discounts due to timely payments:

Sales discounts due to timely payments: increase a contra-revenues account

If we purchase inventory FOB destination and freight costs $100, shipping costs:

We don't pay the shipping

Under the Weighted Average perpetual inventory system, given the information below, what would be January's Cost of Goods Sold value? Weighted Average Date Description Units Cost per Unit 1/1 Beginning Inventory 220 $100.00 1/8 Bought Inventory 180 $120.00 1/16 Sold Inventory 160 ??

Weighted Average 220 $100.00 $22,000 180 $120.00 $21,600 400 $43,600 = $109 Average 160 Units Sold $17,440 COGS

Under the Weighted Average perpetual inventory system, given the information below, what would be January's Ending Inventory value? Weighted Average Date Description Units Cost per Unit 1/1 Beginning Inventory 220 $100.00 1/8 Bought Inventory 180 $120.00 1/16 Sold Inventory 160 ??

Weighted Average 220 $100.00 $22,000 180 $120.00 $21,600 400 $43,600 = $109 Average 240 Units in EI $26,160 EI

Your company buys $1,000 worth of inventory and promises to pay at the end of the month. You will debit [account1] for $1,000 and credit [account2] for $1,000.

Your company buys $1,000 worth of inventory and promises to pay at the end of the month. You will debit Inventory for $1,000 and credit Accounts Payable for $1,000.

accumulated depreciation is

a contra asset account

click on the place where accounts receivables should go on the financial statements

assets

Your company buys a car $20,000 by getting a $20,000 car loan. You will debit [account1] for $20,000 and credit [account2] for $20,000.

automobile, car loan payable

Your company is a retailer, like Macy's. The customer pays you $3,500 in cash for merchandise sold to them in the store. The journal entry is:

cash 3500, sales 3500. cogs 2000, inventory 2000

To DECREASE cash, you:

credit

To INCREASE unearned revenue (a liability), you:

credit

To increase the accumulated depreciation account, you: (type dr or cr)

credit

To increase the allowance for bad debts, you

credit

to decrease cash, you

credit

to increase sales you

credit

when making closing journal entries, assuming accounts have their "normal" balances, what do you do with the payroll tax expense?

credit

When making closing journal entries, assuming accounts have their "normal" balances, what do you do with the Bad Debts Expense?

credit to close the account

A customer returns a product that you sold earlier in the week. Would you debit or credit the sales returns and allowances account to increase it?

debit

To DECREASE accounts payable, you:

debit

To DECREASE the Allowance for Bad Debts, you

debit

To DECREASE the Allowance for Bad Debts, you:

debit

To increase accounts receivables, you:

debit

To increase the depreciation expense account, you: (type dr or cr)

debit

To increase the inventory account, you:

debit

To increase the office furniture account, you: (type dr or cr)

debit

to decrease accounts payable, you

debit

to increase the cost of goods sold account, you:

debit

When making closing journal entries, assuming accounts have their "normal" balances, what do you do with a Gain on the Sale of Equipment account? (Click or tap the correct answer.)

debit to close the account

Which PPE account is closed at year end?

depreciation expense

Depreciation on equipment for the year is calculated to be $12,000. The adjusting journal entry would be:

depreciation expense, accumulated depreciation

The graph below shows straight line and double declining balance depreciation expense. Which line is which?

double declining balance

Sales tax collected by a retailer is an expense to the company.

false

Under the perpetual inventory system, you buy $1,000 worth of merchandise on account 2/10, n/30 with $85 in freight. While it's sold to you FOB-shipping point, the seller prepays for the freight of $85 and adds it to your bill, so the accounts payable is recorded $1,085. You pay the bill within the discount period. The cash paid is:

hat's a tough one! No discount on the freight. So $1,000 x 98% = $980 + $85 = $1,065.

Which of the following accounts would be closed at year end?

interest expense

Accounts payable are normally for:

inventory purchases or other regularly occurring short-term payables

freight in:

is not increases freight expense is also not decreases revenues

If we sell inventory FOB destination and freight costs $100, shipping costs:

itincrease freight expense by 100

click on the place where a notes payable should go on the financial statements

liabilities

purchase discounts due to timely payments

reduce inventory costs

Under the perpetual inventory system, you sell 100 items at $30 each of merchandise that cost you $12 a unit to purchase. Within a week of receiving the items, your customer returns 5 of those items for credit. The entries for the return is:

sales returns and allowances 150 Accounts Receivable 150 Inventory 60 Cost of goods sold 60

what probably did not happen when you credited the account for that amount 96k

sold something on credit

In the first year of an asset's life, which depreciation method results in higher net income?

straight line

When making closing journal entries, assuming accounts have their "normal" balances, what do you do with the Accumulated Depreciation account? (Click or tap the correct answer.)

the account does not get closed

The allowance method that brings the balance of the allowance account to the needed amount as determined by the aging schedule is

the aging-of-receivables method

The value in the Buildings account will always be:

the original cost of the building

A company recognizes goodwill only when:

they buy another company

If we sell inventory FOB shipping point and freight costs $100, shipping costs:

we don't pay the shipping

We recognize the costs related to a warranty on our products when:

we sell the product

Which of the following is NOT a payroll tax expense to the employer?

withholding for employee income tax