ACC 201 Final Exam Vreeland Unr

A credit sale of $1,900 is made on April 25, term 2/10, n/30, on which a return of $100 is granted on April 28. What amount is received as payment in full on May 4?

$1,764

The TNT Company has five plants nationwide that cost $300 million. The current market value of the plants is $500 million. The plants will be reported as assets at

$300 million

Revenues are considered a subcategory of which part of the accounting equation?

Assets

Which of the following would not appear on the income statement?

Dividends

If a potential investor wanted to know if a company relies primarily on debt or stockholder's equity to finance its assets, she would look at which financial statement?

balance sheet

Conway Company purchased merchandise inventory with an invoice price of $9,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Conway Company pays within the discount period?

$8,820

Deferred Revenue is always

a liability

Under a perpetual inventory system,

accounting records continuously disclose the amount of inventory

Which of the following accounts is not closed?

accumulated depreciation, equipment

Under the allowance method, writing of an uncollectible account

affects only balance sheet accounts

A common misconception concerning the income statement is that

all of these are misconceptions concerning the income statement: -net income equals the amount of cash generated by the business during the period -the measurement of income only involves counting: estimation plays no role at all in computing income -Net income represents the change in value of the company during the period.

All of the following accounts would have credit balances with the exception of

cash

Which of the following statements regarding closing entries is true?

closing entries bring the retained earnings account to its correct ending balance

All of the following are tangible assets except

coal reserves

Accumulated depreciation is a

contra asset account

Two categories of expenses in merchandising companies are

cost of goods sold and operating expenses

The lower of cost or market/net realizable value (LCM/NRV) is a departure from the

cost principle

The right side of an account is used to record

credits

Gross profit equals the difference between

sales revenue and cost of goods sold

Which organization form is the most common?

sole propietorship

In order to strengthen corporate financial reporting, the US Congress passed

the Sarbanes-Oxley Act

Which of the following statements is not true regarding LIFO?

the ending inventory under LIFO is based on the price of the most recent units purchased

If a company sells its accounts receivables to a factor

the seller pays a commission to the factor

The normal balance for an account is

the side on which it increases

The Blooming Miracles Flower Shop bought a delivery van on January 1, 2019.The van cost $18,000 and had an expected salvage value of $3,000. The life of the van was estimated to be five years or 150,000 miles. Using the straight-line method of depreciation, the book value of the van at the beginning of the third year would be

$12,000

The Blooming Miracles Flower Shop bought a delivery van on January 1, 2019.The van cost $18,000 and had an expected salvage value of $3,000. The life of the van was estimated to be five years or 150,000 miles. The depreciable cost of the van is

$15,000

As of December 31, 2019, Carslaw Coporation had assets of $10,000 and liabilites of $6,000. What is stockholders equity for Carslaw Corporation as of December 31, 2019?

$4,000

Wolf Pack Deli purchased $2,400 of supplies for cash. A month later Wolf Pack Deli purchased additional supplies on account for $2,000. Wolf Pack Deli also paid $400 of the accounts payable. What is the balance in the Supplies account?

$4,400

At the beginning of the year, Wildcat Athletic had an inventory of $200,000. During the year, the company purchased goods costing $800,000. If Wildcat Athletic reported ending inventory of $300,000 and sales of $1,000,000, their costs of goods sold and gross profit rate would be

$700,00 and 30%

The financial statements of the Phelps Manufacturing Company reports net sales of $500,000 and accounts receivable of $80,000 and $40,000 at the beginning of the year and end of the year, respectively. What is the average collection period for accounts receivable in days (rounded to the nearest day)?

44.0 days

The financial statements of the Sifers Manufacturing Company reports net sales of $300,000 and accounts receivable of $50,000 and $30,000 at the beginning and end of the year, respectively. What is the accounts receivable turnover for Sifers?

7.5 times

Which of the following journal entries correctly records receiving $15,000 cash to provide services next month?

Cash: Debit: 15,000 Deferred Revenue: Credit: 15000

Which of the following journal entries correctly records obtaining a loan from a credit union for $15,000?

Cash: Debit: 15,000 Notes Payable: Credit: 15,000

Which type of business organization provides the most amount of protection for the owners of the business?

Corporation

In a period of rising prices, the inventory system that will yield the highest net income is

FIFO

When legal title of the goods remains with the seller until the goods reach the buyer the terms are said to be

FOB destination

In which order are the financial statements prepared?

Income statement, statement of retained earnings, balance sheet, statement of cash flows

When cash is paid for supplies that are received, but will not be used until the next month, which accounts are debited and credited?

Supplies account is debited and cash is credited

Which of the following provides the best rationale regarding analysts views about the information value of the gross profit rate versus the gross profit amount?

The gross profit amount is less informative than the gross profit rate because it is a dollar amount rather than a ratio.

Snoopy Company borrows $10,000 from Lucy Lenders to start a dog biscuit business. Snoopy would consider Lucy to be which of the following?

a creditor

When using the allowance method, the balance in the allowance for doubtful accounts

all of these: -equals the total estimated uncollected accounts, as determined by management at the end of the period -can have a debit balance before the end of the period adjusting entry is made -is a contra asset account and must have a credit balance after the end of period adjusting entry

When an allowance method is used and an account is subsequently written off as uncollectible, the following account is debited,

allowance for doubtful accounts

The method of accounting for bad debt expense, which conforms to GAAP is

allowance method

The adjusted trial balance shows

amounts that are ready for the financial statements

Under a period inventory system, beginning inventor plus purchases equals cost of goods available for sale, which can be divided into

an income statement account and a balance sheet account

An aging schedule of account receivable

arranges the accounts by the length of time they have been unpaid

Which financial statement is an expanded version of the accounting equation?

balance sheet

Which of the following is not a current liability?

bonds payable that mature in five years

On May 1, 2019, Smith Company makes sales of $10,000 to Jones Company. Jones needs longer than the normal 30 days to pay and signs a 90-day, 8% note payable. On May 1, 2019, Smith Company should

debit Notes Receivable for $10,000

Which of the following terms describe the types of adjusting entries?

deferrals and accurals

Douglas Company has a $51,000 note that carries an annual interest rate of 10%. If the amount of the total interest on the note is equal to $3,400, then what is the duration of the note in terms of months?

eight months

A current asset is

expected to be converted to cash or used in the business within a relatively short period of time

In preparing a set of financial statement, which statement needs to be prepared first?

income statement

Which financial statement provides the primary measure of a company's operating performance?

income statement

An exclusive right issued by the US Patent Office that enables the recipient to manufacture, sell, or otherwise control an invention for a period of twenty years from the date of the grant is a

patent

Which of the following is an operating activity?

provide services to a customer

Which of the following is fundamental quality that useful financial information must possess?

relevance

Which of the following is not a basic financial statement?

revenue statement

All of the following accounts would have debit balances with the exception of

sales revenue

When a perpetual inventory system is used, which of the following is a purpose of taking a physical inventory?

to check the accuracy of the perpetual inventory records

A primary purpose of the unadjusted trial balance is

to prove that total debits equal total credits

To determine the cost of goods sold under a periodic inventory system, all of the following are necessary except

total cash register receipts for the period

The process of identifying the specific effects of economic events on the accounting equation is referred to as

transaction analysis

The revenue recognition principle controls

when revenues are recognized on the income statement and the dollar amount that is recorded

Ford Motor company would classify trucks on the assembly line in various stages of completion as

work in process