HM 335-Final Exam
An example of an intangible asset is: A) Land B) Assembly cost C) A building D) A patent
A patent
Any time an owner removes and asses for personal use it is recoded as A) An expense B) Payment of a liability C) A withdrawal D) An investment
C) Withdrawal
Par value is equal to: A) Market value of the stock B) Retained earnings C) The initial price at which the stock is sold D) The amount stated in the charter or legal capital
D) The amount stated in the charter or legal capital
Josh Kindel purchased equipment for $60,000 on January 1. Its residual value is $4,000 with a useful life of 8 years. The amount of depreciation expense in the first year under the double-declining-balance method is: A) $15,000 B) $14,000 C) $7,000 D) $7,500
A) $15,000
Rhubarb corporation's outstanding stock is 100 shares of $100, 11% cumulative nonparticipating preffered stock and 2,000 shares of $12 par value common stock. Rhubarb paid $1,600 cash dividends during the year. Common stockholders received: A) $500 B) $ 2,500 C) $1,100 D) $0
A) $500
Valerie Chandler works 42 hours as a coffee barista, and earns $12 per hour. Compute her weekly pay assuming overtime rate of 1.5. A)$516 B) $624 C) $552 D) $480
A) $516
Collins corporation reported net income of $35,000 depreciation expense of $20,000 an increase in accounts payable $2,000 and an increase in accounts receivable $3,000 Net cash flow from operating activities using the indirect method is: A)$ 54,000 B) $55,000 C) $50,000 D) $56,000
A) $54,000
A calendar quarter is made up of: A) 13 weeks B) 12 weeks C) 4 months D) However many weeks are needed to complete the month
A) 13 weeks
Information to calculate the adjusted cash balances for Sam's gift wrapping is as followed Cash balance per general ledger-2,100 Customer's check return-NSF-75 Bank service charges-40 Deposits in transit-500 Outstanding checks-700 Customer's note collected by bank-645 A) 2,630 B) 2,330 C) 2,230 D) 2,430
A) 2,630
Mount company purchases a machine at an invoice cost of $21,000 subject to terms 3.10, n/3. The discount was taken. Additional costs were installation $1200 insurance on the machine after it was in operation $370. The total cost to be added to the machinery account is: A) 21,570 B) 21,940 C) 21,000 D) 20,740
A) 21,570
If total liabilities are 7,000 and owner's equity is 15,000 the total assets must be A) 22,000 B) 8,000 C) 40,000 D0 23,000
A) 22,000
Information to calculate the adjusted cash balance for Magic's gym is as follows: Cash balance per general ledger (unadjusted)-1,900 Customer's check returned-NSF-60 Bank service chargers-15 Deposits in transit-700 Outstanding checks-600 Customer's note collected by bank-410 A) 2,235 B) 1900 C) 1835 D) 2325
A) 2235
If there is a total of 50,000 square feet of floor space, and the hardware department utilizes 12,500 square feet, what percent of the total square footage is hardware? A) 25% B) 20% C) 40% D) 80%
A) 25%
J. Long purchased computer equipment for 5,000 on January 1 it as a residua value of 500 with a useful life of 5 years. After the appropriate adjusting entries are made, the book value of the asset on december 31, under the double declining method is: A) 3,000 B) 4,000 C) 4,100 D) 3,2000
A) 3,000
On January 15, Robert Love earned 4,000 had has the following deductions FICA_OASDI 6.2% FICA-Medicare 1.45% federal income tax of 200 and state income tax of 40 what is his net pay? A) 3,454 B) 4,000 C) 3,400 D) 4,454
A) 3,454
Lacy purchased equipment for 77,000 on January 1. Its residual value is 5,000 with a useful life of 9 years. The amount of depreciation expense in the first year under straight-line method is: A) 8,000 B) 16,940 C) 15,840 D) 8,556
A) 8,000
The look-back period is used to determine whether: A) A business should make its form 941 tax deposits on a monthly or semiweekly basis B) An employer has sent the w-2s to their employees on timely basis C) an employer must pay unemployment taxes D) An employer will use for 940
A) A business should make its form 941 tax deposits on a monthly or semiweekly basis
When preparing the statement of cash flows by the indirect method, if current liabilities increase the difference is: A) Added to net income B) Deducted from net income C) Added to investments D) Subtracted from investments
A) Added to net income
The process of writing off an intangible asset is: A) Amortization B) Depletion C) Depreciation D) None of these answers are correct
A) Amortization
The financial statement that shows business results in terms of revenue-expenses is: A) An income statement B) A balance sheet C) A statement of owner's equity D) The statement of cash flow
A) An income statement
The employer records deductions from the employee's paycheck A) As credits to liability until paid B) As debits to expense accounts C) As debits to asset account until paid D) As credits to capital account
A) As credits to liability account until paid
Which of the following groups of accounts have a normal debit balance? A) Assets. expense, and withdrawals B) Liabilities, expense and assets C) Revenue, liabilities, and capital D) Assets, capital, and withdrawals
A) Assets, expenses, and withdrawals
Which of the following is prepared last? A) Balance sheet B) Statement of owner's equity C) Trail balance D) Income statement
A) Balance sheet
The cost of an asset less accumulated depreciation equals: A) Book value B) Depreciation expense C) Residual value D) None of these are correct
A) Book value
The bank would issue a credit memorandum to Alliant Health when the bank A) Collect a note receivable from an Alliant Health customer B) Discovered a check previously deposited by the Alliant Health is an insufficient funds check C) Posted the monthly service charges D) None of these answers are correct
A) Collected a note receivable from an Alliant Health customer
Riley's limousines' entry to establish a $75 petty cash fund for the office would include a: A) Credit to cash for 75 B) Debit to cash for 75 C) Credit to petty cash for 75 D) Debit to office expense for 75
A) Credit to cash for 75
When equipment that is fully depreciated is discarded: A) Debit accumulated depreciation and credit equipment B) Debit the original cost of the asset C) Credit the balance of accumulated depreciation
A) Debit accumulated depreciation and credit equipment
The entry to record selling 150 shares of non-par common stock with a stated value of $30 and $40 would be: A) Debit cash for $6,000, credit common stock for $4,500, credit paid in capital in excess of stated value-comon for $1,5000 B) Debit common stock $6,000 credit cash $6,000 C) A) Debit cash for $6,000, credit common stock for $4,500, credit paid in capital in excess of par value-comon for $1,5000 D) Debit cash for $6,000 credit common stock $6,000
A) Debit cash for $6,000, credit common stock for $4,500, credit paid in capital in excess of stated value-comon for $1,5000
As accumulated depreciation is recorded, the book value A) Decreases B) Increases C) Remains the same D) Is closed out
A) Decreases
The depreciation method which charges more expense in earlier years than in later year is the: A) Double declining-balance method B) Straight-line method C) Units-of-production method A) All of the above
A) Double-declinging
A summary record of each person's earning, deductions and net pay is called a(n): A) Employee individual earnings record B) General Journal C) W-4 D) Payroll register
A) Employees individual earnings record
A plant asset is fully depreciated when the book value is: A) Equal to the salvage value B) Equal to the market price C) Greater than the market value D) Greater than the salvage value
A) Equal to the salvage value
Which taxes are considered 941 taxes? A) FICA and FIT B) FICA, FUTA, and SUTA C) FICA and SIT D) None of these answers are correct
A) FICA, and FIT
The number of allowances claimed by an employee determines how much will be withheld from their paycheck for: A) Federal income tax B) FICA-OASDI C) FICA-Medicare D) All of these answers are correct
A) Federal income tax
The twelve-month period a business chooses for its accounting period is a(n): A) FIscal year B) Calendar year C) Accounting cycle D) Accounting period
A) Fiscal year
Which form contains information about gross earning and is given to the employee on January 31? A) Form w-2 B) Form w-4b C) Form w-3 D) Form ss-4
A) Form w-2
Which form is sent to the social security administration along with the W-2s? It reports total wages, Fica tax withheld, ect, for the previous year? A) Form w-3 B) Form SS-4 C) Form 940 D) Form w-2
A) Form w-3
Which financial statement is prepared first? A) Income statement B) Balance sheet C) Statement of owner's equity D) None of the above
A) Income Statement
The financial statement that shows business results in terms of revenue and expense is A) Income statement B) A statement of owner's equity C) The statement of cash flow D) A balance sheet
A) Income statement
The general ledger: A) Is the book of final entry B) Is before the general journal C) Is the book of original entry D) Lists the transactions in chronological order
A) Is the book of final entry
A restrictive endorsement on a check: A) Is the safest endorsement for businesses B) Can be further endorsed by someone else C) Permits the bank to use its best judgement D) Non of these answers are correct
A) Is the safest endorsement for business
Transactions listed in chronological order appear in the: A) Journal B) Trail balance C) Balance sheet D) Ledger
A) Journal
The purchase of equipment with both cash and on account was recorded as only a credit purchase. Due to this error: A) Liabilities would be overstated B) Assets wold be overstated C) Owner's equity would be overstated D) None of the above are correct
A) Liabilities would be overstates
A share of stock may be sold at any given time according to the stock's A) Market value B) Par value C) Stated value D) Book vale
A) Market value
For vertical analysis purposes, the base item on an income statement is: A) Net sales B) Total expenses C) Total sales D) Net income
A) Net sales
To explain in detail the weekly payroll of all employees, one would look at the: A) Payroll register B) Employee earning record C) W-2 D) W-4
A) Payroll register
Which of the following accounts would most likely be debited in the replenishment of petty cash? A) Postage expense B) Cash C) Withdrawals D Petty cash
A) Postage expense
A w-4 form: A) Provides the number of allowance an employee has claimed B) Determines the amount of FICA_OASDI to be withheld C) Determines the amount of FICA_Medicare to be withheld D) Shows total wages earned for the year
A) Provides the number of allowances an employee has claimed
Form 941 is filed: A) Quarterly B) Monthly C) Weekly D) Annually
A) Quarterly
The increase or decrease in the owner's equity is reported to the; A) Statement of owner's equity B) Income statement C) Balance sheet D) All of these
A) Statement of owners equity
Treasury Stock is A) Stock that has been reacquired by the corporation B) Previously issued stock that has been canceled C) Stock that has been issued in a stock split D) unissued stock
A) Stock that has been reacquired by the corporation
The articles of incorporation are: A) Submitted by the incorporation to the office of secretary of state for approval B) Submitted by the securities and exchange commission for approval C) Oral or written D) Approve by a committee of lawyers
A) Submitted by the incorporation to the office of secretary of state for approval
If rent expense has been debited, it is likely that: A) This months rent was paid B) A copy of the lease was received C) The rent was paid for 3 months in advance D) All these are possible
A) This months rent was paid
Logan's Motor sport buys $30,000 of equipment on credit. Which of the following is true? A) Total assets increase B) Total liabilities decrease C) Total liabilities are unchanged D) Total assets are unchanged
A) Total assets increase
A chart of accounts: A) Is a listing of all the accounts used by a company B) Includes account balances C) Is set up in alphabetical order D) All of the above are correct
A) is a listing of all the accounts used by the company
A corporation: A) is owned by stockholders B) Has limited risk to stockholders C) Can continue indefinitely D) All of the above
All of the above
Accounts payable had a normal balance of $800. There were debit postings of $600 and credit postings of $300 during the month. The ending balance is: A) $500 debit B) $500 credit C) $1,00 debit D) $1,000 credit
B) $500 credit
If the employee has $500 withheld from their check for federal income tax, what is the amount that the employer would need to pay for their portion of the federal income tax? A) $500 B) 0 C) $400 D) $100
B) 0
If total stockholder's equity was 21,000 with 2,100 common shares outstanding, what is the book value par stock? A) 15.40 B) 10.00 C) 11.00 D) 15.oo
B) 10.00
Before a three-for-one stock split, outstanding shares were 5,000 shares at $12 par. After split, what was the par and number of shares A) 5,000 shares at $48 per share B) 15,000 shares are $4 per share C) 20,000 shares at $6 par share D) 15,000 shares at $12 per share
B) 15,000 shares are $4 per share
With a beginning Accounts Receivable balance of $20,000 an ending balance $26,000 and net credit sales of $408,000, compute accounts receivable turnover ratio A) 20.4 B) 17.7 C) 0.05 D) 68
B) 17.7
Brain Temple's cumulative earnings are $73,000 and his gross pay for the week is $5,300. If the FICA rate are OASDI 6,2% on a limit of $106,800 and Medicare is 1.45%, what are his FICA-OASDI and FICA-Medicare taxes of the week? A) 0, 76.85 B) 328.60, 76.85 C) 328.60, 0 D) 3286,768.50
B) 328.6, 76.85
What would be the depreciation expense in year 1, using units-of-production, for a molding machine that costs 18,00, had a useful life of 3 years, no residual value, and an estimated total machine hours of 36,000. Production in year 1 wad 10,000 hours A) 6,000 B) 5,000 C) 2,667 D) 4,000
B) 5,000
Liquidity ratios measure: A) How effectively a company is using its equity B) A company's ability to pay off short-term debits C) How effectively a company is using its liabilities D) A company's ability to pay shareholders
B) A company's ability to pay off short-term debts
The journal entry to record a withdrawal by the owner would most commonly include: A) A debit to wage expense and a credit to cash B) A debit to withdrawals and a credit t cash C) A debit to capital and a credit to cash D) A debit to cash and a credit to wage expense
B) A debit to withdrawals and a credit to cash
If accounts payable has been debited, it is most likely that: A) A charge customer made a payment B) A payment was made on account C) A purchase was made on account D) None of these are possible
B) A payment was made on account
The process that begins with the recording business transactions and includes the completion of the financial statement is the: A) Fiscal year B) Accounting cycle C) Calendar year D) Natural business years
B) Accounting cycle
FICA (OASDI and Medicare) and unemployment taxes are similar in that they: A) Have the same maximum wage base B) Are payroll tax expenses of the employer C) Are a specified percent of federal income tax withholdings D) Are paid by the employee
B) Are payroll tax expenses of the employer
FICA and unemployment taxes are similar in that they: A) have the same maximum taxable wage base B) Are payroll tax expenses of the employer C) Are a specific percent of federal income tax withholding D) Are paid by the employee
B) Are payroll tax expenses of the employer
What type of an account is the petty cash fund? A) Revenue B) Asset C) Liability D) Expense
B) Asset
Items owned by the business such as land, supplies, and equipment are: A) Liabilities B) Assets C) Owner's Equity D) Revenue
B) Assets
The business provided services to a cash customer A) Assets and owner's equity increase B) Assets and revenue increase C) Liabilities and owner's equity increase D0 None of the above are correct
B) Assets and revenue increase
Form SS-4 is: A) Submitted annually to pay unemployment taxes B) Completed to obtain an EIN C) Submitted quarterly to pay FIT and FICA taxes D) Submitted to summarize the W-2 forms to the social security administration
B) Completed to obtain an EIN
The entry to record the payment of taxes from employees and FICA taxes would be to: A) Debit cash, credit FICA-Social security payable, FICA-medicare payable, and Federal income tax payables, B) Credit cash, debit FICA-Social security payable, FICA-medicare payable, and Federal income tax payables C) Credit cash, credit FICA-Social security payable, FICA-medicare payable, and Federal income tax payables D) None of these answers are correct
B) Credit cash, debit FICA-Social security payable, FICA-medicare payable, and Federal income tax payables
The entry to record MidIowa.net selling 500 shares of 5 par value common stock at 8 would be to: A) Debit cash 4,000 credit common stock 4,000 B) Debit cash 4,000, credit common stock 2,500 debit paid in capital in excess of par value common-1,500 C) Debit cash 2,500 credit common stock 2,500 debit paid in capital in excess of par value common-1,500 D) None of these are correct
B) Debit cash 4,000, credit common stock 2,500 debit paid in capital in excess of par value common-1,500
When preparing the statement of cash flows by the indirect method, of current assets have increased the difference is: A) Added to net income B) Deducted from net income C) Added to investments D) Subtracted from investments
B) Deducted from net income
The check is written and signed by the A) Drawee B) Drawer C) Payer D) Payee
B) Drawer
If the adjustment for supplies used during the period was not made: A) Revenue would be too high B) Expense would be too low C) Assets would be too low D) Expense would be too high
B) Expenses would be too low
Both employees and employers pay which of the following taxes? A) Federal income tax B) FICA taxes (OASDI and Medicare) C) FUTA tax D) Worker's compensation
B) FICA taxes (OASDI and Medicare)
Which taxes are considered 941 taxes? A) FICA, SIT B) FICA, FIT C) FICA, FUTA and SUTA D) None of these answers are correct
B) FICA, FIT
Transactions involving the purchase and sale of fixed assets would be considered A) operating activities B) Investing activities C) Buying and selling activities D) Financing activities
B) Investing activities
A chart of accounts: A) includes account balances B) Is a listing of all the accounts used by the company C) is set up in alphabetical order D) All of the above are correct
B) Is a listing of all the accounts used by a company
Which of the following describes preemptive rights A) Disposal of or sell stock B) Maintain proportionate ownership interest C) Vote at stockholders meetings D) Share in profits
B) Maintain proportionate ownership interest
If beginning capital was 85,000, ending capital is 75,000 and the owners withdrawals were 15,000 the amount of net income or net loss was: A) Net income of 20,000 B) Net income of 5,000 C) Net loss of 5,000 D) Net income of 15,000
B) Net income of 5,000
Company policy for internal control should include all the following except: A) Employees will be rotated B) One employee should have total responsibility for approving purchases, authorizing payments, and signing checks C) At time of payment, all supporting invoices or documents will be stamped "paid" D) The owner ( or responsible employee) signs all checks after receiving authorization to pay from the departments concerned
B) One employee should have total responsibility for approving purchases, authorizing payments, and signing checks
When historical cost is used in the accounting records, the book vale of the asset is: A) Closed out B) Original cost less accumulated depreciation C) The market value D) The original cost
B) Original cost less accumulated depreciation
The adjustment for supplies was omitted. This would: A) Understate this period's net income and overstate next period's net income B) Overstate this period's net income and understate next period's net income C) Overstate this period's net income and overstate next period's net income D) Understate this period's net income and understate next period's net income
B) Overstate this period's net income and understate next period's net income
Worker's compensation insurance is: A) Paid by the employee t protect himself against non job-related accident and deaths B) Paid by the employer to protect the employee against job-related injury or death C) Paid by the employer to protect the employee against non job-related injury or death D) Paid by the employee to protect himself against job-related accidents or death
B) Paid by the employer to protect the employee against job-related injury or death
After the adjustment for depreciation has been made, the original cost of the equipment: A) Decreases with a debit B) Remains the same C) Increases with a credit D) None of these answers are correct
B) Reamins the same
Which of the following transactions would result in an accrual? A) Equipment depreciated over the period B) Salary expense has been incurred but unpaid C) Supplies used during the accounting period D) Rent expired for the month
B) Salary expense has been incurred but unpaid
Which of the following transactions would cause one asset to increase and another asset to decrease? A) The business paid a creditor B) The business bought supplies for cash C) The owner invested cash in the business D) The business incurred an expense on credit
B) The business bought supplies for cash
The date of declaration for cash dividends is: A) The date the board of directors pay a dividend B) The date creates a liability for the company C) The date the board of directors determines who will receive the dividends D) None of these are correct
B) The date creates a liability for the company
Under the Fair Labor Standards Act, for any hours that an employee works over 40 during a work week: A) The employee must receive the minimum wage B) The employee is paid time and a half C) The employee must be paid double D) All of these answers are correct
B) The employee must be paid time and a half
A purchase of a vehicle for cash would have what affect on the accounting equation? A) Total owner's equity is overstated B) Total asset amount remains the same C) Total liabilities are overstated D) Both A and B are correct
B) Total asset amount remains the same
Dexter Corporation has total paid-in-capital of $160,000 and retained earnings of $60,000. It has 1,500 shares of $10 preferred stock with no dividends in arrears and 2,000 shares of $10 par value common stock. The book value of each share of common stock is: A) $88.00 B) $7.50 C) $10 D) $102.50
C) $102.5
Chocolate supreme purchased new baking equipment for $15,000 subject to terms 4/10, n/45. The discount was taken. Additional cost include sales tax $900 and installation $300. The total coast to be added to the machinery account is: A) $15,000 B) $15,300 C) $15,600 D) $15,900
C) $15,600
Samuel purchased a truck for $25,000 with a residual value of $5,000 and a life expectancy of 5 years; the depreciation for a year would be: A) $5,000 B) $6,000 C) $4,000 D) $500
C) $4,000
Compute the contribution margin for the video department, when gross profit is $880,000, direct expenses $370,000 and indirect expenses are $190,000 A) $700,000 B) $690,000 C) $510,000 D) $320,000
C) $510,000
Currently the FUTA is: A) 6.2% with a base limit of 76,200 B) 5.4% with a base limit of 7,000 C) .8% with a base limit of 7,000 D) 5.4% with a base limit of 76,200
C) .8% with a base limit of 7,000
Talarico's Subs purchased a new van for $25,000, its estimated useful life is 100,000 miles, residual value of $5,000. The can was driven 15,000 miles in year 1. What is the depreciation expense in year 1? A) 6,667 B) 3,760 C) 3,000 D) 4,000
C) 3,000
Vanessa's gymnastics' cash register tapes do not agree with cash receipts. The facts are: total cash register tapes $400; total coins and currency $404. The summary journal entry to record the day's transaction would include a: A) 400 debit to cash, 4 debit to cash short/over and 404 credit to sales B) 400 debit ti cash, and 400 credit to sales C) 404 debit to cash, 4 credit to cash short/over and 400 credit to sales D) 404 debit to cash, and 404 credit to sales
C) 404 debit to cash, 4 credit to cash short/over and 400 credit to sales
An employee has gross earning of 700 and withholdings of 53.33 FICA and 50 for income taxes. The employer pays 53.33 FICA, 10 SUTA and 5.60 FUTA what is the employer's total cost of the employee? A) 819.15 B) 780 C) 769.15 D) 905.55
C) 769.15
The payment for FUTA would include A) A debit to FUTA expense B) A credit to FUTA payable C) A credit to cash D) A credit to FUTA expense
C) A credit to cash
In the statement of cash flows, which event would cause net income to be increased? A) An increase in prepaid insurance B) An increase in accounts receivable C) A decrease in inventory D) A decrease in accounts payable
C) A decrease in inventory
A contra-asset is: A) An asset with a debit balance B) In reality a liability C) An account with an opposite balance of a normal asset D) An account that increases the asset
C) An account with an opposite balance of a normal asset
The business provided services to a cash customer. To record this: A) An expense is debited and capital is credited B) An asset is debited and a liability is credited C) An asset is debited and a revenue is credited D) None of these are correct
C) An asset is debited and a revenue is credited
A contra-asset is: A) An account that increases the asset B) In reality a liability C) An account with an opposite balance of a normal asset D) An asset with a debit balance
C) An asset with an opposite balance of a normal asset
What would be the effect on accounts if the business received the telephone bill but did not pay it immediately? A) An asset would be debited and capital credited B) Capital would be debited and revenue credited C) An expense would be debited and a liability credited D) An expense would be debited and an asset credited
C) An expense would be debited and a liability would be credited
If prepare rent for the period is not adjusted: A) Assets will be understated and expense will be understated B) Assets will be overstated and expenses will be overstated C) Assets will be overstated and expenses will be understated D) Assets will be understated and expenses will be overstated
C) Assets will be overstated and expense will be understated
The credit recorded in the journal to replenish the petty cash fund is: A) Accounts payable B) Petty cash C) Cash D) Accounts receivable
C) Cash
The bank would issue a credit memorandum to Maria's life management when the bank A) Received the deposits transit B) Discovered a check that was deposited was retuned for non-sufficient finds C) Collects a note receivable from a customer D) None of these answers are correct
C) Collects a note receivable from a customer
The entry to record the payment of taxes withheld from employees and FICA taxes would be to: A) Credit Cash; credit FICA-Social security payable, FICA-medicare payable, and Federal income tax payables B) Debit cash; credit FICA-social security payables, FICA-medicare payable, and Federal income tax payables C) Credit cash; debit FICA-Social security payable, FICA-medicare payable, and Federal income tax payables D) None of these answers are correct
C) Credit cash, debit FICA-Social security payable, FICA-medicare payable, and Federal income tax payables
In the dividend process, the liability Dividend Payable is recognized on the: A) Date of record B) Date of stock issue C) Date of declaration D) Date of payment
C) Date of declaration
Greetings online diposed a van that cost $22,000 with accumulated depreciation of $15,00. The journal entry would be to: A) Debit accumulated depreciation 15,00, debit depreciated expense 7,00 and credit van 22,000 B) Debit accumulated depreciation 15,000 and credit van 15,000 C) Debit loss disposal of plant asset 7,000, debit accumulated depreciation 15,000 and credit van 22,000 D) None of these answers are correct
C) Debit loss disposal of plant asset, 7,000, debit accumulated depreciation 15,000 and credit can 22,000
A business paid $5,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to: A) Increase an asset, and increase a liability B) Increase and asset, and increase owner's equity C) Decrease an asset, and decrease a liability d) Increase one asset, and decrease another asset
C) Decrease an asset, and decrease a liability
The difference between a department's gross profit and its operating expense is know as the: A) Departmental operating margin B) Departmental gross profit C) Departmental operating income D) Departmental operating cost
C) Departmental operating income
The wages and salaries expense account would be used to record: A) A debit for the amount of net pay owed to the office workers B) Net earning for the office workers C) Gross earning for the office workers D) A credit to the amount owned to the office workers
C) Gross earnings fro the office workers
The payroll register includes sections for recording: A) accrued expenses, unearned revenues, and net pay B) Assets, liabilities, equity, revenues, and expenses C) Gross pay, deductions and net pay D) Trade account receivable and short-term note receivables
C) Gross pay, deductions and net pay
In a cost center, the manager: A) Is not responsible for controlling costs, but is responsible for generating revenue B) Is responsible for controlling costs and generating revenue C) Has the responsibility for controlling costs, but not directly generating revenue D) None of these are correct
C) Has the responsibility for controlling costs, but not directly generating revenue
If preferred stock is cumulative, the preferred stockholders: A) Will always receive a yearly dividend B) May receive a bonus C) Have a right to certain dividends each year D) None of these answers are correct
C) Have a right to certain dividends each year
A profit center is a unit in which the manager: A) is not responsible for controlling costs, but is responsible for generating revenue B) Has the responsibility for controlling costs, but not for directly generating revenue C) Is responsible for controlling costs and generating revenue D) None of these answers are correct
C) Is responsible for controlling costs and generating revenue
The general journal: A) Contains account balances B) Is the book of final entry C) Is the book of original entry D) Is completed after the general ledger
C) Is the book of original entry
Posting is performed by transferring information from the journal to the: A) Income statement B) Trial balance C) Ledger D) Balance sheet
C) Ledger
Which of the following would be considered the book of final entry? A) Trial balance B) Journal C) Ledger D) Work sheet
C) Ledger
The cash flow statement has all of the following sections except: A) Net cash flow from operating activities B) Net cash flow from financing activities C) Net cash flow from managing activities D) Net cash flow from investing activities
C) Net cash flow from managing activities
Wages and Salaries payable would be used to record: A) Gross earning of the employees B) Cumulative earnings of the employees C) Net earning of the employees not paid D) The paid portion of the earnings
C) Net earning of the employees not paid
If beginning capital is $110,000 ending capital is $95,000 and the owner's withdrawals were $10,000 the amount of net income or net loss was: A) Net loss of $15,000 B) Net income of $5,000 C) Net loss of $5,000 D) Net income of $15,000
C) Net loss of $5,000
A corporation is a business which is: A) Ends with the death of a stockholder B) Easy to form C) Owned by stockholder D) None of these are correct
C) Owned by stockholders
The major parts of the Stockholders equity section of the balance sheet are A) Stock, paid-in-capital, and retained earnings B) Common stock and preferred stock C) Paid in capital and retained earnings D) Common stock and retained earnings
C) Paid in capital and retained earnings
A credit to a revenue account was posted to an owner's equity account. This would cause: A) Expense to be understated B) Liabilities to be understated C) Revenue to be understated D) Assets to be overstated
C) Revenue to be understated
Revenue is traditionally recognized in the accounting records when: A) Cash is received B) It is incurred C) Services are rendered D) None of the answers are correct
C) Servies are rendered
On a worksheet, the income statement debit column totals $10,200 and the credit column totals $10,000. WHich of the following statements is correct? A) The company had a net income of $200 B) The company's revenue were greater than expenses C) The company had a net loss of $200 D) None of these are correct
C) The company had a net loss of $200
If prepaid rent has been debited, it is most likely that: A) A bill for the past month's rent was received B) This month's rent was paid C) The rent was paid for three months D) All of these are possible
C) The rent was paid for three month
Residual value is the: A) Cost of the asset B) Allocation of the cost C) Value of the asset at the end of its useful life D) Value of the asset when it is purchased
C) Value of the asset at the end of its useful life
Financial statements are prepared from the: A) Adjusted trial balance B) Ledger C) Worksheet income and balance sheet columns D) Trial balance
C) Worksheet income and balance sheet columns
The balance sheet contains: A) liabilities, expenses and capital B) expenses, assets and cash C) assets, liabilities, and owner's equity D) assets, liabilities, and revenues
C) assets, liabilities, and owner's equity
If cash is $2,345 in 2012, and $3,671 in 2011, what is the percent of increase or decrease from 2011 to 2012 A) 56.55% B) 36.12% C) (36.12%) D) (56.55%)
C)(36.12%)
Sues jewelry shoppe's payroll includes the following data: Gross salaries-$12,000 Salaries subject to FICA: 6.2% social security-$12,000 1.45% medicare-$12,000 Salaries subject to FUTA .8% $6,000 SUTA 2.7% $6,000 The employer's payroll tax for the period would be A) $918 B)$1,000 C) $210 D) $1,128
D) $1,128
What would be the accumulated depreciation at the end of year 3 for a computer system using the straight-line method when cost is $5,000 residual value is $1,000 and the expected life is 4 years A) $1,000 B) $3,750 C) $1,250 D) $3,000
D) $3,000
An employee has gross earning of $1,000 with withholding of 6.2% FICA-OASDI, 1.45% FICA-Medicare, $50 for federal income tax and $10 for state income tax. How much net pay? A) $900 B) $781.15 C) $791.15 D) $863.50
D) $863.50
The revenue of Carol's environmental services for years 1, 2, and 3 are $40,000, $60,000, and $80,000, respectively. Year 1 is bas year. The trend percentage for year 2 is: A) 133% B) 50% C) 200% D) 150%
D) 150%
Given the following lists of accounts with normal balances, what are the trial balance total of all the debits and credits Cash-$1100 Accounts receivable-$800 Capital-$1900 Withdrawals-$500 Service Fees-$1000 Rent expense-$500 A) 3,900 debit, 3900 credit B) 2,00 debit, 2000 credit C) 1,200 debit, 1200 credit D) 2,900 debit, 2900 credit
D) 2,900 debit, 2900 crdit
Compute employee FICA taxes for the year on earnings f 108,000 at 6.2% on a limit of 106,800 for OASDI and 1.45% for medicare A) 8,262 B) 8,170.2 C) 6.621.6 D) 8,187.6
D) 8,187.6
Capital expenditure would include: A) Betterments B) Additions C) Extraordinary repais D) All of these answers are correct
D) All of these answers are correct
Internal control over a company's assets should include the following policy: A) All cash receipts will be deposited into a bank the same day they arrive B) All cash payments will be made by check C) Responsibilities and duties of employees will be divided D) All of these answers are correct
D) All of these answers are correct
The bank statement shows: A) Any other charges or additions to the bank balance B) The checks the bank has paid and any deposits received C) The beginning bank balance at the start of the month D) All of these answers are correct
D) All of these answers are correct
What would be the effect on accounts if the business provided services to a customer on account? A) An asset would be debited and capital credited B) An asset would be debited and an expense credited C) Capital would be debited and revenue credited D) An asset would be debited and revenue credited
D) An asset would be debited and revenue credited
A statement comparing data from two or more consecutive periods is called a: A) Comparative balance sheet B) Comparative income statement C) Common-size statement D) Both A and B
D) Both A and B
Adjusting entries affect: A) The income statement B) The balance sheet C) Neither of these are correct D) Both A and B are correct
D) Both a and B are correct
The exclusive right to produce and sell a manuscript is called: A) Patent B) Franchise C) Goodwill D) Copyright
D) Copyright
The entry to record the disposal of a laptop computer with a cost of 2,5000 and an accumulated depreciation of 1,500 would be A) Debit cash 2,500, credit equipment 2,5000 B) Debit equipment 2,500 credit accumulated depreciation 2,500 C) debit depreciation expense 2,500 credit equipement 2,500 D) Debit accumulated depreciation 1,500 debit loss on disposal of an asset 1,000 credit equipment 2,500
D) Debit accumulated depreciation 1,500 debit loss on disposal of an asset 1,000 credit equipment 2,500
Another name for the Fair labor standards act is: A) Federal Insurance Contributions act B) Federal Hourly act C) Federal Income Tax act D) Federal Wage and Hour law
D) Federal Wage and Hour law
The tweleve-month period a business chooses for its accounting period is a(n): A) Calendar year B) Accounting period C) Accounting cycle D) Fiscal year
D) Fiscal year
A task station that originally cost $2,500 has no estimated salvage value and was deprecated at the rate of 20% per year (straight-line depreciation). At the end of the third year, it was sold for $1,500 cash. The transaction would result in a: A) Loss of $500 B) Loss of $250 C) Gain of $250 D) Gain of $500
D) Gain of $500
Kevin purchased 20,000 of new equipment on account. The effect on the basic accounting equation was to: A) Decrease cash, 20,000 and increase equipment 20,000 B) Decrease cash 20,000 and increase equipment 20,000 C) Decrease cash 20,000 and increase equipment 20,000 D) Increase equipment 20,000 and increase accounts payable 20,000
D) Increase equipment 20,000 and increase accounts payable 20,000
Which of the statements of the rules of debit and credit are true: A) Decrease accounts receivable with a credit and the normal balance is a credit B) Increase Accounts payable with a credit and the normal balance is a debit C) Decrease cash with a credit and The normal balance is a credit D) Increase rent expense with a debit and the normal balance is a debit
D) Increase rent expense with a debit and the normal balance is a debit
Assets are equal to: A) Revenue-expenses B) Liabilities-owner's equity C) Liabilities-revenues D) Liabilities+ Owner's equity
D) Liabilities + Owner's Equity
The statement of cash flows provides information about all of the following except: A) Financing activities B) Operating activities C) Investing activities D) Organizing activities
D) Organizing activities
Workers' compensation insurance is: A) Paid by the employee to protect himself against job-related accidents or death B) Paid by the employer to protect employee against non-job related injury or death C) Paid by the employee to protect himself against non-job related accidents and death D) Paid by the employer to protect the employee against job-related injury or death
D) Paid by the employer to protect the employee against job-relate injury or death
The order of the steps to prepare the worksheet are: A) extend the totals to the income statement and balance sheet columns, prepare the trial balance, complete the adjustments, prepare the adjusted trial balance B) Complete the adjustments, prepare the adjusted trial balance, prepare the trial balance, extend the respective total to the income statement and balance sheet columns C) Prepare the adjusted trial balance, complete the adjustments, prepare the trial balance, extend the respective total to the income statement and balance sheet columns D) Prepare the trial balance, complete adjustments, prepare the adjusted trial balance, extend the respective total to the income statement and balance sheet columns
D) Prepare the trial balance, complete adjustments, prepare the adjusted trial balance, extend the respective total to the income statement and balance sheet columns
For vertical analysis purposes, a base item on a balance sheet is: A) Total liabilities B) Net equity C) Total equity D) Tota Assets
D) Total assets
Rhubard Corporations outstanding stock is 200 shares of $100, 9% cumulative preferred stock and 2,000 shares of $10 oar value common stock. The company paid $1,200 cash dividends during the year. Common stock received: A) $600 B) $1,800 C) $1,200 D)$ 0
D)$0
Financial statements that are prepared for a period shorter than a year are called: A) Fiscal year statements B) Journal statements C) Accounting period statements D) Interim statements
Interim statements
