Final

Which of the following principles dictates that expenses are recognized in the same accounting period as their related revenue

Matching

GT company has $200 in cash, $500 in accounts receivable, and $700 in inventory. The company also What is the company's quick ratio?

1.75

A company has total assets of $350,000 consisting of current assets of $115,000 What is the current ratio

1.77

On January 2, 2019 alfredo corporation sold merchandise with a gross price of $100,000. How much sales discounts would be recorded if payment was received from the customer. Assume the company uses the gross method of recording receiveables

2000

GTO division has $14,000 in current assets, $2,000 in accounts payable, and $2,000 in unearned sales revenue. What is the divisions current ratio?

3.5

If the budget showed a projected cash shortage, the company would most likely

arrange to borrow the necessary cash for that period

A list of all assets, liabilities, stockholders' equity, revenue, expense and dividend accounts which are used by the company is called

chart of accounts

Treasury Stock is a(n)

contra stockholders' equity account

If a company fails to adjust for accrued expenses what effect will this have on that months financial statements

expenses will be understated net income and stockholders equity will be overstated

If common stock is issued for an amount greater than par value, the excess should be credited to

paid in capital in excess of par value

Hunter Company reported a net loss of $12,000 for the year ended. operating Activites

provided net cash of $50,000

After a corporation declares a cash dividend, what takes place on the date of record?

stockholders equity decreases

Which depreciation method is most frequently used In business today

straight line method

The statement of cash flows

summarizes the operating, financing, and investing activities of an entity

If a corporation issues cumulative, participating preferred stock, which of the following is true regarding the rights of the preferred stockholders?

they have the right to receive current year dividends and all unpaid dividends from prior years

For companies that use a perpetual inventory system, all of the following are purposes for taking a physical inventory except

to determine ownership of the goods

For Year 2 Daisy Corporation reported net income of $60, Net Sales $800: and average shares outstanding 6. No dividends. What were the Year 2 earnings per share?

$10.00

Tedder uses a periodic inventory system. At the end of January, 20 units were on hand. The following additional information.. How much is cost of goods sold for January? If the company uses FIFO inventory method?

$230

The interest charges on a $400 note payable at the rate of 6% on a 90 day note would be

$6

United Services and Supplies reports net income of $60,000 and cost of goods sold of $360,000. US&S's gross profit rate was 40%, net sales were

$600,000

Steps in the Accounting Cycle

1. Prepare Journal Entries 2. Post Journal Entries to General Ledger 3. Prepare Unadjusted Trial Balance 4. Prepare Adjusting Entries 5. Post Adjusting Entries to General Ledger 6. Prepare Adjusted Trial Balance 7. Prepare Financial Statements 8. Prepare Closing Entries 9. Post Closing Entries to General Ledger 10. Prepare Post-Closing Trial Balance 11. Prepare Reversing Entries 12. Post Reversing Entries to General Ledger

If total assets are $100,000, Liabilities are $60,000, and Common Stock is $25,000, the retained earnings of the firm is:

15000

Use the following data to calculate the current ratio Koonce

2.50:1

A landscaping company operates five days per week with a daily payroll of $16,000. What is the amount of wages expense recorded on the next payday, Saturday, April 3?

22400

Refer to the information provided for Pham Enterprises. What is the company's gross profit ratio for the year ended December 31?

33.44%

Parlato Corp. has an inventory turnover ratio of 8 time. Calculate the company's average days to sell inventory

45.6

Accent Flooring the company received a promissory note from a customer on March 1, 2019 The principle amount is $20,000 What entry is required on the books of accent flooring on the maturity assuming that none of the interest had already been recognized.

450

Pham Enterprises What is the company's average days to sell inventory measure?

59.7

Given the data below for a firm in its first year of operation determine net income under the cash basis of accounting.

7,700

Given the data below for a frim in its first year of operation determine net income under the cash basis

7700

Madson Company typically sells subscriptions on an annual basis, and publishes six times a year. The magazine sells 90,000 subscriptions in January at $10 each. What entry is made in January to record the sale of the subscriptions?

Cash $900,000 unearned subscription revenue 900,000

A business organized as a separate legal entity from its owners is a

Corporation

Which is the order in which assets are general listed on a classified balance sheet?

Current: Long Term investments, property plant and equipment, intangibles

Retained Earnings is reduced by

Dividends

Income statement accounts are also knowns as which of the following?

Final accounts

All of the following accounts have normal credit balances except

Investments

Ending Retained Earnings for a period is equal to beggining

Retained Earning+Net Income- Dividends

Failure to record dividends paid would result in which of the following?

Supplies Expense Being overstated

Which of the following is not a significant date with respect to dividends

The incorporation date

Which of the following companies will have the highest inventory turnover

a bakery

The income statement shows

a summary of the results of operations for a period of time. Revenues - Expenses

What happens to the accounting equation when the adjustment for depreciation expense for accounting period is recorded ?

assets and stockholders equity decrease

The book value of an assets is equal to the

assets cost less accumulated depreciation

If a company uses the allowance method to account for doubtful accounts when will the companys stockholders' equity decrease?

at the end of the accounting period when an adjusting entry for bad debts is recorded

In order to determine inventory for its balance sheet, a company must count the inventory at the end of its accounting period according to

both periodic and perpetual inventory systems

The payment of Accounts payable results in

decrease in liabilities and a decrease in assets

The purchase of an asset on credit

increases assets and liabilities

Revenue Recognition dictates that revenue should be recognized in the accounting period in which it is

recognized and earned (performance obligation satisfied)

Adjusting entries are made to ensure that:

all of the above

Debit entries are used to

increase asset accounts

In a period of rising prices, which of the following inventory methods generally results in the lowest net income figure

LIFO

Net income may be defined as

The excess of revenues over expenses for the time period

Which of the following is the most appropriate and modern def..

The information system identifies, records,

Georgia's Salon The salon sells $50,000 of gift cards in May 2019. These gift cards may be used anytime before their expiration on may 31 2020. All but 1500 of the gift cards had been redeemed for salon services. Which of the following is the correct journal entry to record for the expired gift cards?

Unearned Sales Revenue $1500 Sales Revenue $1500

The interest on a $15,000, 6%, 60-day note receivable is

$150

A plant has assets with a cost of $600,000 and accumulated depreciation of $570,000 is sold for 70,000. disposal of the plant asset

$40000 gain

Tedder uses a periodic inventory system. At the end of January, 20 units were on hand. The following additional information.. How much is cost of goods sold for January? If the company uses LIFO inventory method?

$50

Convertible bonds are attractive to bondholders because?

- They can be converted into stock at the bondholder's option

Fabian Woodworks This company purchased a truck at a cost of $12000 The truck has an estimated residual value of $2000 and an estimated life of 5 year or 100000 hours of operation. Purchased Jan 1 and used 27000 hours in 2019 and 26000 hours in 2020. IF the company uses the units of production method, what is the depreciation rate per hour for the equipment?

.10 per hour

A bond issuing at 101.25 means that the bonds

1000 sold at 1012.50

Art Shoes This company received a promissory note from a customer on July 1, 2019. The face amount of the note is $45,000 ; the terms are 12 months and 10% annual interest. How much Interest Revenue will the company recognize for the year ended December 31, 2019?

2250

At January 1, 2017, Troyer Industries reported Retained Earnings of $350,000. The balance in ending retained earnings is

225000 credit

Kump Co. uses a perpetual inventory system and had the following inventory transactions. If the company uses FIFO inventory costing method, the amount of ending inventory reported on the balance sheet is?

2538

On January 1, 2019, a company's balance in retained earnings was $275,000. During 2019 the company earned net income $23,500 and paid $11,200 in dividends. Calculate the retained earnings balance at December, 31 2019.

287300

Fabian Woodworks This company purchased a truck at a cost of $12000 The truck has an estimated residual value of $2000 and an estimated life of 5 year or 100000 hours of operation. Purchased Jan 1 and used 27000 hours in 2019 and 26000 hours in 2020. If the company uses the double declining balance depreciation method what is the depreciation expense for 2020?

2880

On January 15th Nifty company sells merchandise on account to Martinez associates for $5,000 with terms...What is amount of cash received

3,880

The company purchased a semi truck at the beginning of 2019 at a cost of $100,000. The truck had an estimated life of 5 years and estimated residual value of $20,000 and will be depreciated using the straight line method. What amount should be recorded as depreciation expense each year starting in 2021?

80,000

Which of the following is not classified properly as a current asset

A receivable from the sale of an asset to e collected in two years

Which of the following is not a current liability

Bonds payable due in 5 years

Refer to Hesson Properties. what journal entry is required to record the purchase of the carts?

Equipment 1500 accounts payable 1500

In a period of declining prices, which of the following inventory methods generally results in the lowest balance sheet figure for inventory?

FIFO method

Which of the following terms fits this definition: The area of accounting principally concerned

Financial Accounting

Which of the following is not one of the three forms of business organization?

Investors

Debts and obligations of a business are referred to as

Liabilites

Many company's use MACRS depreciation for?

MACRS is used in the tax books because it allows companies to allocate a larger amount of depreciation expense upfront, reduce their taxable income, and thus reduce the amount of tax expense in the earlier years they pay to the IRS.

Two methods of accounting for uncollectible accounts are the

direct-write off method and the allowance method

If the market interest rate for a bond is higher than the stated interest rate, the bond will sell at

discount

Which of the following methods will result in the highest depreciation in the first year

double declining balance

Georgia's Salon The salon sells $50,000 of gift cards in May 2019. These gift cards may be used anytime before their expiration on may 31 2020 What is the impact on the accounting equation equation of recording the expired gift cards?

guess

Treasury shares represent the

number of previously issued shares that have been repurchased by the corporation.

Outstanding shares represent the

number of shares that are currently held by stockholders.

A merchandiser that sells directly to consumers is a

retailer

All of the following statements regarding retained earnings are true except

retained earnings represents a claim on clash

Gross Profit

sales revenue - cost of goods sold

Pham Enterprises What is the company inventory turnover ratio for the year ended December 31?

sales/inventory

A very small company would have the most difficulty in implementing which of the following internal control activities?

separation of duties

Having one employee prepare company checks and sign those checks is:

separation of duties

The common characteristic possessed by all assets is

service potential or future economic benefit

Receivables might be sold

to generate cash quickly

A current Liability is a debt that can reasonably be expected to be paid

within one year or the operating cycle, whichever is longer

Plant assets are ordinarily presented in the balance sheet

At cost less accumulated depreciation

Fantasy Cruise Lines On January 1, 2019 the company purchased a ship for 1,000,000. It has a 10 year useful life and a residual value of $100,000. The company uses the double declining balance method. What is the book value at the end of the useful life?

$100,000

Given the data below for a firm in its first year of operation, determine net income under the accrual basis of accounting

11750

A corporation purchased a three-year insurance policy on December 1, Year A...The adjusting entry on December 31, Year A the company's year end will include.

B. Insurance Expense will would be $100 a month, insurance expense account should have 100 balance

The Current Portion of a Long-Term debt should

be reclassified as a current liability

The category that is generally considered to be the best measure of a companys ability to continue as a going concern is

cash flows from operating activities

Cash, Accounts Receivable and Prepaid insurance will be classified on a balance sheet as

current assets

All of the following are examples of internal control procedures except

customer satisfaction surveys

A company receives $348, of which $28 is for sales tax. The journal entry to record the sale would include a

debit to cash for $348

Under the accrual basis of accounting

events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. not the ledger accounts must be adjusted

A company would be expected to generate small amounts of cash from operations during the

growth phase

Which one of the following is not one of the main factors that contribute to fraudulent activity?

incompatible duties

On October 1st, a company borrowed $60,000 from Eighth National Bank on a 1-year, 7% note. If the company's fiscal year ends on December 31sr, a year-end adjusting entry is required to increase?

interest payable by 1050

What happens to the accounting equation when the adjustment is recorded to recognize earned revenue previously recorded as unearned revenue?

liabilities decreases and stockholders equity increases

Dividends in arrears on cumulative preferred stock

must be paid before common stockholders can receive a dividend

Which of the following would be deducted form the balance per bank on a bank reconciliation

outstanding checks

Working Capital is

used to evaluate a companies liquidity and short-term debt paying ability.

Fabian Woodworks This company purchased a truck at a cost of $12000 The truck has an estimated residual value of $2000 and an estimated life of 5 year or 100000 hours of operation. Purchased Jan 1 and used 27000 hours in 2019 and 26000 hours in 2020. What amount will be reported as depreciation expense over the 5 year life of the equipment?

10,000

A high accounts receivable turnover ratio indicates

Customers are making payments quickly

The primary purpose of the statement of cash flows is to

D. entity's cash receipts and cash payments during a period.

This company purchased a truck at a cost of $12000 The truck has an estimated residual value of $2000 and an estimated life of 5 year or 100000 hours of operation. Purchased Jan 1 and used 27000 hours in 2019 and 26000 hours in 2020. Refer to Fabian Woodworks. Based on the information presented above, what method of depreciation will maximize depreciation expense in 2019?

Double Declining Balance

Refer to A-One Construction. What is the balance of accounts receivable at December 31?

Guess

A credit sale of $1,400 is made on July 15, terms 2/10 on which a return of $100 is granted .Payment in full on July 24th

$1274

If a company has assets of $5,000,000. liabilities of $3,000,000, and retained earnings of $1,200,000, how much is total stockholders equity?

2,000,000

which of the following correctly identifies normal balances of accounts?

Assets : Debit Liabilities: Credit Common Stock: Credit Revenue: Credit Expenses: Debit

Powers Corporation received a cash advance of $500 from a customer. As a result of this event

Assets increased by $500

Which one of the following relationships shows the proper structure of a corporation

shareholders vote on board of directors, employees report to officers

If a company determines cost of goods sold each time a sale occurs, it

uses a perpetual inventory system

On January 1, 2019 this company issued $500,000, 10 year, 9% bonds for 480,745. Market rate 10%. What is the carrying value of the bond after the first interest payment is made?

482,282

If a company has $10,500,000 of revenues, declares and pays $550,000 in dividends, and has net income of $1,600,000, how much were expenses for the year?

8,900,000

An internal control system is important to a business because it

All of the above

Which of the following represents the expanded basic accounting equation

Assets + Dividends + Expenses = Liabilities + Common stock + Retained Earnings + Revenues.

If goods in transit are shipped FOB destination

the seller has legal title to the goods until they are delivered.