ACC 1000 FINALS

A firm's bank reconciliation statement shows a book balance of $17,620, an NSF check of $1,300, and a service charge of $110. Its adjusted book balance is:

$16,210 *$17,620 - $1,300 - $110 = $16,210.*

A firm had purchases of $17,900, freight charges of $470, and purchases returns and allowances of $1,950 during one month. Its net delivered cost of purchases was:

$16,420. *$17,900 + $470 − $1,950 = $16,420*

Hour Place Clock Shop sold a grandfather clock for $2,380 subject to a 7% sales tax. The entry in the sales journal will include a credit to Sales for

$2,380.00

At the end of the first month of operations for SloMo Delivery Service, the business had the following accounts: Accounts Receivable, $11,350; Prepaid Insurance, $400; Equipment, $26,200 and Cash, $21,650. On the same date, SloMo owed the following creditors: Simpson Supply Company, $17,000; Allen Office Equipment, $14,500.The total amount of Liabilities is:

$31.500 *Liabilities = Simpson Supply Company, $17,000 + Allen Office Equipment, $14,500 = $31,500.*

On a statement of owner's equity, beginning capital is $30,000, Net Income for the year is $11,000 and Drawing for the year is $6,000, the ending capital amount would be:

$35,000

A creditor's account in the accounts payable ledger has a $3,400 beginning balance. After a transaction for $700 is posted from the purchases journal, the balance of the creditor's account is:

$4,100 credit.

At the end of the first month of operations for SloMo Delivery Service, the business had the following accounts: Accounts Receivable, $11,350; Prepaid Insurance, $400; Equipment, $26,200 and Cash, $21,650. On the same date, SloMo owed the following creditors: Simpson Supply Company, $17,000; Allen Office Equipment, $14,500.The total assets for the SloMo Delivery Service are:

$59,600 *Assets = Accounts Receivable, $11,350 + Prepaid Insurance, $400 + Equipment $26,200 + Cash, $21,650 = $59,600.*

Lacy Crawford has a regular hourly rate of $21.65. In a week when she worked 40 hours and had deductions of $110.80 for federal income tax, $53.70 for social security tax, and $12.60 for Medicare tax, her net pay was

$688.90 *$21.65 × 40 hours = $866.00; $866.00 − $110.80 − $53.70 − $12.60 = $688.90*

An employee whose regular hourly rate is $15 and whose overtime rate is 1.50 times the regular rate worked 47 hours one week. The employee's gross pay was

$757.50 *$15 × 40 hours = $600.00;$15 × 1.50 = $22.50; $22.50 × 7 = $157.50; $157.50 + $600.00 = $757.50*

Tune Tones Instrument Tuning Company owes Mandy Lynn's Music Studio $5,606 as of November 1. During November Tune Tones purchased merchandise from Mandy Lynn totaling $9,995 and made payments on account to Mandy Lynn in the amount of $7,400. The amount Tune Tones owes Mandy Lynn on November 30 is:

$8,201 *$5,606 + $9,995 − $7,400 = $8,201*

Kay Sadia sold merchandise for $8,400 subject to a 7% sales tax. The entry in the sales journal will include a debit to Accounts Receivable for

$8.988.00

Merchandise is sold for $9,400, terms 1/10, n/30. Prior to payment, the customer returned $660 of the merchandise. If the invoice is paid within the discount period the amount of the sales discount is:

$87.4 *$9,400 - $660 = $8,740; $8,740 × 0.01 = $87.4*

An employee whose regular hourly rate is $25 and whose overtime rate is 1.50 times the regular rate worked 47 hours in one week. In the payroll register, the employer should record an overtime premium of

$87.50 *$25 × 0.50 = $12.50; $12.50 × 7 = $87.50*

MacGyver Company bought equipment on January 3, 2019, for $52,000. At the time of purchase, the equipment was estimated to have a useful life of five years and a salvage value of $4,000. Using the straight-line method, the amount of one year's depreciation is:

$9,600

Identify the accounts below that are ALL permanent accounts.

Accounts Receivable, Accumulated Depreciation, Accounts Payable

When recording transactions in the T-accounts, the debits should equal the credits:

Always.

A firm wrote a check for $86 but entered the amount as payment of $107 in its records. On a bank reconciliation statement this error would be shown as:

An addition of $21 to the book balance. *$107 - $86 = $21*

On a worksheet, the adjusted balance of the Prepaid Rent account is extended to the:

Balance Sheet Debit column.

The owner's investment or equity in a business is called:

Capital

A business purchases equipment costing $5,500. They pay $1,500 right away and charge the remaining amount. To record this transaction, the business would:

Debit Equipment $5,500; Credit Cash $1,500 and Credit Accounts Payable $4,000

Which of the following transactions increase owner's equity?

Earning revenue

Choose the option below that reflects the correct order in which to prepare the three financial statements

Income Statement; Statement of Owner's Equity; Balance Sheet.

Amounts that a business must pay in the future are known as:

Liabilities

Managerial accounting is

Private accounting

One purpose of closing entries is to zero out the balances in the:

Revenue and expense accounts

Identify the type of accounts that would appear on a firm's income statement

Revenues and expenses.

The government agency that has final authority over the financial reporting of publicly owned corporations is the

Securities and Exchange Commission.

The Income Statement shows:

The amount of net income or net loss.

An accounting system that involves recording the effects of each transaction as debits and credits is:

The double entry system

A business transaction must affect at least two accounts.

True

Al Dunn Bakery bought a new oven for $1,380. Al paid $300 as a cash down payment and will pay the balance in 30 days. Total assets increased by $1,080.

True

Credits increase Liabilities, Owner's Equity, and Revenue.

True

Utilities Expense would be debited when a company receives a bill for utilities that it will pay later.

True

Assuming a Medicare tax rate of 1.45% and monthly gross wages of $2,700, the amount recorded in Medicare Tax Payable for one quarter for the employee's payroll deduction is

a credit for $117.45 *$2,700 × 0.0145 = $39.15;$39.15 × 3 months = $117.45*

The journal entry to record the sale of services on credit should include:

a debit to Accounts Receivable and a credit to Fees Income.

When an entry is made in the general journal,

accounts to be debited should be listed first

On a balance sheet, Accumulated Depreciation—Equipment is reported:

as a contra-asset on the Balance Sheet.

When the owner withdraws cash for personal use

assets decrease and owner's equity decreases

On November 1, 2019, Peaches Consulting Service paid $4,800 for 12 months of advance rent on its office space. The correct adjusting entry on December 31, 2019, to show the amount of rent that had expired would include:

debit Rent Expense $800; credit Prepaid Rent $800

A total of $2,800 in supplies was purchased during the year. At the end of the year $700 of the supplies were left. The adjusting entry needed at the end of the year is:

debit Supplies Expense $2,100; credit Supplies $2,100

When revenue is earned from charge account sales, the accountant:

debits Accounts Receivable and credits a revenue account.

The Financial Accounting Standards Board is responsible for

developing generally accepted accounting principles.

The normal balance of an account is the:

increase side of the account.

When a trial balance is in balance,

the debit account balances equal the credit account balances.

If a worksheet is prepared at the end of the accounting year,

the financial statements are prepared using the worksheet data.

If a transaction is properly analyzed and recorded,

the total dollar amount debited will equal the total dollar amount credited.