ACC 311 Exam 1

which of the following transactions results in a decrease in both total assets and net income? a- the accrual of salaries expense at year end b- collecting cash from an account receivable c- recognizing revenue which was previously recorded as unearned revenue d- paying cash to satisfy an account payable e- adjustment of the prepaid rent account which was used during the period

e- adjustment of the prepaid rent account which was used during the period

On May 1, 2014, Adams Company borrowed 100,000 by signing a one year, 9% note payable. the principal and interest will be paid on may 1, 2015. how much interest expense should be reported on the income statement for the year ended dec 31, 2015 A- 6,000 B- 9,000 C- 3,000 D- 4,000 E- 0

B- 9,000

CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2016. During the year 2017, CBA reported net income of $10,000, declared and paid a cash dividend of $2,000, and issued additional common stock for $20,000. What is total stockholders' equity as of December 31, 2017? A. $117,000 B. $113,000 C. $109,000 D. $115,000 E.$ 93,000

B. $113,000

On December 31, 2015, Smith Company reported total liabilities of $120,000 before the following adjusting entries: Expenses incurred but not yet paid: $22,000. Used insurance: $11,000; the insurance was initially recorded as prepaid. Incurred Depreciation expense: $37,000. Rent revenue earned: $9,000; the rent was initially paid in advance by the tenant and booked to unearned rent revenue. How much are Smith Company's total liabilities after adjusting entries? A. $133,000 B. $170,000 C. $142,000 D. $151,000 E. None of the above

A. $133,000

Which of the following statements is FALSE? A. The declaration of a cash dividend creates a liability as of the date of record. B. The date of record is irrelevant with respect to recording a liability for a cash dividend. C. The dividend payment date is when the dividend liability is reduced. D. The dividend liability for a cash dividend is created on the declaration date. E.The payment of a cash dividend does NOT impact expenses on the income statement.

A. The declaration of a cash dividend creates a liability as of the date of record.

Madrid Company has provided the following data (ignore income taxes) -2014 revenues were: 77500 -2014 net income was: 33900 -dividends declared and paid during 2014 totaled 5700 -total assets at December 31,2014 were: 217,000 -total stockholders equity at dec 31, 2014 was 123,000 -retained earnings at dec 31, 2014 wer 83,000 which of the following is CORRECT? A- 2014 expense were $37,900 B- total liabilities at Dec 31, 2014 were 11,000 C- Retained Earnings increases $28,200 during 2014 D- Common Stock at dec 31, 2014 was $206,000 E- None of the above

C- Retained Earnings increases $28,200 during 2014

At the beginning of 2013, Yellowstone Corp had assets of $540,000 and liabilities of $320,000. During 2013, assets increased $50,000 and liabilities increased $10,000. What was stockholders' equity on December 31, 2013? A. $280,000 B. $160,000 C. $260,000 D. $380,000 E. None of the above

C. $260,000

On January 1, 2013, Craig Company paid the premium on a four-year insurance policy in the amount of $12,000. At that time, the full amount paid was recorded as prepaid insurance. After recording the correct adjusting entry for the insurance policy on December 31, 2015, Craig Company's records would reflect what balance in the prepaid insurance account? A. $6,000 B. $9,000 C. $3,000 D. $4,000 E. $0

C. $3,000

Queen Corporation reports the following information: Accounts payable $10,000 Accounts receivable $3,000 Cash 25,000 Notes payable 5,000 Retained earnings 100,000 Inventory 4,000 Buildings 250,000 Office Supplies 2,000 What is the amount of Queen's current assets? A. $125,000 B. $13,000 C. $34,000 D. $284,000 E. None of the above

C. $34,000

Big Bend Company has provided the following information: -Operating revenues were $100,000. -Operating expenses were $45,000. -Cash dividend payments to Big Bend's stockholders were $5,000. -Income tax expense was $20,000. How much was Big Bend Company's net income? A. $30,000 B. $45,000 C. $35,000 D. $80,000 E. None of the above

C. $35,000

What effect on the financial statement when a company fails to adjust the unearned revenue account for revenues at year end? a- net income understated and assets are understated b- revenues are understated and liabilities are understated c- revenues are understated and stockholders equity is over stated d- net income is understated and liabilities are overstated e- retained earnings is overstated

D- net income is understated and liabilities are overstated

use the following to determine the total gross profit for this company during the year 2016: beginning inventory:125,000 ending inventory:250,000 2016 total revenue:1,400,000 inventory purchases:1,225,000 2016 COGS: 1,100,000 The accounts receivable balance increased 800,000 from 1/1/2016 to 12/31/2016 a- 125,000 b- 175,000 c- 300,000 d- 1,100,000 e- none of the above

c- 300,000

Jordan Corporation buys T-shirts from a supplier for $6 and sells them for $12. Recently, they sold 10 T-shirts to a customer. The T-shirts were delivered and the customer promised to pay in 60 days (no cash was immediately received). Their accountant forgot to book this ENTIRE transaction. Given this information which of the following would be correct at the end of the year after? A. Liabilities would be understated and Retained Earnings would be understated. B. Expenses would be understated and Retained earnings would be understated. C. Assets would be overstated and Retained Earnings would be properly stated. D. Expenses would be understated and Retained Earnings would be properly stated. E.Assets would be understated and Expenses would be properly stated.

B. Expenses would be understated and Retained earnings would be understated.

The Longhorn Company has provided the following information related to its stockholders' equity section: • 200,000 shares of $5 par value common stock are authorized • 140,000 shares of common stock were issued for $11 per share • 130,000 shares are outstanding Based on the information given, which of the following statements is false? A. Common stock is reported at $700,000 on the balance sheet. B. Additional-paid in capital is reported at $840,000 on the balance sheet. C. Common stock decreased $50,000 when the treasury stock was purchased. D. There are 10,000 shares of treasury stock. E. Treasury stock purchases impact the balance sheet.

C. Common stock decreased $50,000 when the treasury stock was purchased.

Which of the following best describes the balance sheet? A. It includes a listing of assets at their market values B. It includes a listing of assets, liabilities, stockholders' equity, revenues, and expenses at their market values C. Provides information pertaining to a company's assets and the claims against those assets. D. Provides information pertaining to a company's assets for a period of time. E. Provides information pertaining to a company's assets, liabilities, and stockholders' equity for a period of time.

C. Provides information pertaining to a company's assets and the claims against those assets.

Blue Ridge Inc. purchased $250,000 of inventory during February and will pay for it during March. Which of the following statements is FALSE assuming the inventory was sold and delivered, by Blue Ridge, during March? A. The income statement will report cost of goods sold of $250,000 during February. B. The company's accounts payable will include the $250,000 on the February month-end balance sheet. C. The income statement will report cost of goods sold of $250,000 during March. D. The company's inventory will include the $250,000 on the February month-end balance sheet. E. None of the above statements are false.

C. The income statement will report cost of goods sold of $250,000 during March.

Assume California Consulting Corp recorded the following adjusting entry at year-end, December 31, 2015: Debit: Unearned Consulting Revenue $6,000 Credit: Consulting Revenue $6,000 Their January 1st, 2015 balance in Unearned Consulting Revenue was $12,000 and $7,000 in cash was received during 2015 as an advanced payment for consulting work. Based on the above information California Consulting Corp's ending 2015 Unearned Consulting Revenue account (after the above adjusting entry) would be: A. $13,000 Debit B. $ 6,000 Credit C. $13,000 Credit D. $ 6,000 Debit E. None of the above

D. $ 6,000 Debit

The Scott Company provided the following information for the full month of January: -Total expenses for the month were $100,000 -Scott Company declared, but did not pay, $200,000 worth of dividends during January -Their January 1st Retained Earnings balance was $500,000 (credit balance) -Total revenues for the month were $500,000 but only collected $300,000 of these revenues in cash. Based only on this information what is Scott's ending January balance in Retained Earnings? A. $900,000 B. $500,000 C. $300,000 D. $700,000 E. None of the above are correct.

D. $700,000

Which of the following are the components of stockholders' equity on the balance sheet? A. Common Stock and Liabilities B. Common Stock and Assets C. Retained Earnings and Dividends D. Common Stock and Retained Earnings E. Revenue, Expenses, and Dividends

D. Common Stock and Retained Earnings

During 2016, Universal Corporation repurchased some shares of its own common stock. What effect did this transaction have on 2016 stockholders' equity and earnings per share, respectively? Stockholders Earnings Per Equity Share A. Decrease No Effect B. Increase No Effect C. Decrease Decrease D. Decrease Increase E. No Effect Increase

D. Decrease Increase