Financial Accounting Final
Camping Co. was organized to sell a single product that carries a 45-day warranty against defects. Engineering estimates indicate that 12%of the units sold will prove defective and require an average repair cost of $25 per unit. During Camping's first month of operations, total sales were 500 units; by the end of the month, twelve defective units had been repaired. The liability for product warranties at month-end should be
$1,200
Appleton Corporation had a balance of $1,400 in Prepaid Supplies at the beginning of the year. The company purchased $1,100 of supplies during the year. At yearend, Prepaid Supplies had a balance of $2,100. What is the amount of Supplies Expense that Appleton Corporation will recognize for theyear?
$1,400+$1,100-$2,100= $400
Greenworks Company purchased a delivery van for $55,000 on January 1. The van has an estimated 4-year life with a residual value of $6,500. What would the depreciation expense for this van be in the first year if Greenworks uses thestraight-line method
$12,125
Slinger Company reports the following information for their fiscal year end March 31, 2019. What is the total paid in-capital for the Slinger Company on March 31, 2019?
$412 million (Common stock + Paid in capital in excess of par Common = Total Paid in capital)
On the first day of its fiscal year, True Test Company purchased a new computer system for a total cost of $30,000. The computer system is expected to have a life of 10 years with a residual value of $4,000. If the company uses the double-declining-balance method, its depreciation expense for this computer system in the first year will be
$6,000
Which of the following is not a liability?
Allowance for bad debts
The accounting equation can be expressed as
Assets - Liabilities = Owner's Equity
If the indirect method is used, which of the following items appears on a statement of cash flows?
Depreciation expense
Which of the following is not considered to be an advantage of a corporation?
Double taxation
A doctor for the Benson Family Practice performs a sports physical exam for Allison Smythe on February 1. The charge for the exam is $100; Smythe's insurance company, Cardinal Health, is billed for the entire $100 on February 1. Cardinal Health receives the invoice on February 2, and enters the amount into its payment system on February 4. Benson Family Practice receives the $100 payment from Cardinal Health on February 20. On which date would Benson Family Practice recognize the revenue for the Smythe's physical?
February 1
Identify the asset from the following lists of accounts:
Inventory
Financial statements can be used by which of the following groups?
Regulatory bodies, individuals and Investors and creditors
All of the following are internal control procedures except
Sarbanes-Oxley reforms
Accounts payable turnover for Blue Industries increased from 10 to 12 during 2018. Which of the following statements best describes what this means?
The company paid its account payable more quickly in 2018, signaling a stronger liquidity position
Which of the following situations indicates that an asset is impaired?
The net book value of the asset is more than the asset's estimated future cash flows
Bonds with an 8% stated interest rate were issued when the market rate of interest was 5%. This bond was issued at
a premium
How is cost of goods sold classified in the financial statements?
as an expense
All of the following are reported as current liabilities except:
bonds payable due in 18 months
When a customer returns a product to Hartville Equipment that the customer purchased on account, Hartville will issue a __________ to authorize a credit to the customer's account receivable on Hartville's books:
credit memo
When a company expenses the cost of maintenance for its heating and cooling system, that cost will appear on its
income statement
Thorpe Corporation purchases a new delivery truck and signs a note payable at the truck dealership for the total cost. The impact of this transaction on Thorpe Corporation
increases assets and increases liabilities
The Discount on Bonds Payable account
is a contra account to Bonds Payable
The par value of a share of common stock
is stated in the charter
What type of account is Unearned Revenue?
liability
The two main categories of stockholders' equity are
retained earning and paid in capital
The two main categories of stockholders' equity are
retained earnings and paid in capital
Requiring that an employee with no access to cash do the accounting is an example of which characteristic of internal control?
separation of duties
All of the following are types of adjusting entries expect
transactions
