Accounting 115112 week 3

Hamoody Shoes clothing operates a perpetual inventory system. On 6 July Hamoody sold 20 pairs of shoes for $ 100 each. These had cost $ 60 each. What will be the impact on the inventory account?

Answer: -1200 Feedback Decrease 20 pairs x cost per pair The correct answer is: $ -1200

At 30 June Delys Trading has Cash at Bank $ 318, Accounts Receivable $ 731, Inventory of $ 958 , Accounts Payable of $ 250, Equipment $ 1582 and a bank loan of $ 800. What are the Total Assets?

Answer: 3589 Feedback p.142 (137) The correct answer is: $ 3589

At 30 June Delys Trading has Cash at Bank $ 302, Accounts Receivable $ 750, Inventory of $ 909 , Accounts Payable of $ 250, Equipment $ 1739 and a bank loan of $ 800. What are the Total Assets?

Answer: 3700 Feedback p.142 (137) The correct answer is: $ 3700

A driver started a business on 1st of January 2010, hiring out his limousine for special occasions. Current regulations require the business to purchase a license that will expire after two years. The cost of the license is $12,000. Calculate the amount of license expense to be included in the income report for the 6 months ended 30 June 2010. Select one: a. $3,000 b. $4,000 c. $12,000 d. $6,000

a p.163 (158) $12,000 /2 = $6,000 per year. 6 months = $6,000*6/12 = $3,000 The correct answer is: $3,000

What is the effect on the balance sheet when a business buys equipment for $20,000, paying a deposit of $7,000 and promising to pay the balance within 30 days? Select one: a. Increase asset equipment by $20,000, decrease asset bank by $7,000 and increase liability accounts payable by $13,000 . b. Increase asset equipment by $20,000, decrease asset bank by $7,000 and decrease liability by $13,000 . c. Increase asset by $20,000 and increase liability accounts payable by $20,000 d. Increase asset equipment by $7,000 and decrease asset bank by $7,000 p.138 (145)

a Accounting entries 138 (138) Increase asset equipment by $20,000, decrease asset bank by $7,000 and increase liability accounts payable by $13,000 The correct answer is: Increase asset equipment by $20,000, decrease asset bank by $7,000 and increase liability accounts payable by $13,000 .

Smart Business had opening supplies of $400, bought $500 on 30 days credit during the period and finished the month with $300 on hand. Which if the following is true? Select one: a. Supplies Expense +$600. b. Supplies expense +$300. c. Cash -$500, d. Cost of Goods Sold -$600

a Supplies Expense +$600. p.144 (139) The correct answer is: Supplies Expense +$600.

Glotone Co bought inventory $1,000 for their business and paid cash. As a result of this transaction, the company should record: Select one: a. Cash - $1,000, Cost of Goods Sold +$1,000. b. Cash - $1,000, Inventory +$1,000. c. Inventory +$1,000 Accounts Payable +$1,000 d. Cash - $1,000 Accounts Payable -$1,000

b Cash - $1,000, Inventory +$1,000. The correct answer is: Cash - $1,000, Inventory +$1,000.

The owner of Glotone takes $400 worth of inventory from the business for personal use. Which of the following is correct? Select one: a. Owner's Equity- $400, Cost of Goods Sold +$400. b. Owner's Equity -$400, Inventory -$400. c. Cash - $400 Inventory +400 d. Owner's Equity -$400 Cash +$400

b Owner's Equity -$400, Inventory -$400. p.144 (139) The correct answer is: Owner's Equity -$400, Inventory -$400.

Jones Company has the following account balances: Cash, $100; Accounts Payable, $300; Inventory, $500; Accounts Receivable, $800; Salaries Payable, $200; Notes Payable, $1,000, Store Equipment, $6,000. The only other accounts that Jones has are Owner's Equity, Revenue and Expense accounts.Jones Company's total liabilities are: Select one: a. $500. b. $1,500. c. None of the above d. $1,000.

b p.143 (138) 300+200+1,000 =$1,500 The correct answer is: $1,500.

At the end of the month, the Supplies (asset) account of Tony's Toy Shop reflects a balance of $2,000. When she counts her office supplies, she finds that only $600 worth is still left. What end-of-period adjustment should Betty make? Select one: a. None of the other options b. Decrease Office Supplies (asset) by $1,400 and increase Office Supplies Expense by $1,400. c. Decrease Office Supplies (asset) by $600 and increase Office Supplies Expense by $600. d. Decrease Office Supplies (asset) by $1,400 and decrease Office Supplies Expense by $1,400.

b p.164 (158) The correct answer is: Decrease Office Supplies (asset) by $1,400 and increase Office Supplies Expense by $1,400.

At the first of the month Max paid a total of $2,400 for six months' rent in advance. When he recorded the payment, he entered $2,400 into the Prepaid Rent account. After adjusting at the end of the fourth month, the balance in the Prepaid Rent account will be: Select one: a. $1,200 b. $800 c. $400 d. Nil

b page 165 (160) $2,400/6 = $400 $400 * 4 = $1,600 $2,400 - 1,600 = $800 The correct answer is: $800

Nasturium Inc had the following opening account balances: Cash, $300; Accounts Payable, $900; Inventory, $1,500; Accounts Receivable, $2,400; Salaries Payable, $400; Notes Payable, $3,000, Store Equipment, $18,000. What are the Total Liabilities? Select one: a. $5,100. b. 8,200. c. $4,300. d. $4,200.

c $900 + 400 + 3,000 = $4,300 p.143 (137) The correct answer is: $4,300.

The owner of Glotone takes $800 cash from the business for personal use. Select one: a. Cash - $800 Sales +800 b. Owner's Equity +$800 Cash +$800 c. Owner's Equity -$800, Cash at Bank -$800. d. Owner's Equity- $800, Cost of Goods Sold +$800.

c Owner's Equity -$800, Cash at Bank -$800. p.158 (153) The correct answer is: Owner's Equity -$800, Cash at Bank -$800.

Nasturium Inc had the following opening account balances: Cash, $300; Accounts Payable, $900; Inventory, $1,500; Accounts Receivable, $2,400; Salaries Payable, $400; Notes Payable, $3,000, Store Equipment, $18,000. What are the Current Assets? Select one: a. 6,200. b. $4,300. c. $4,200. d. $5,100.

c $300 + $1,500 +$2,400 =$4,200 The correct answer is: $4,200.

On 1 June 20x7 Smart Business paid rent for six months, a total of $4,200. At the end of four months the amount in the Prepaid Rent account will be Select one: a. Nil b. $2,800 c. $1,400. d. $4,200

c $4,200 /6 = $$700 700 * 4 = 2,800 $4,200 - 2,800 = $1,400 p.149 (143) The correct answer is: $1,400.

Employees have worked for the full year and have received total wages of $306,000 in cash. However they must wait until the next payday to be paid for the last three days of the year they have worked. The amount owing is $5,500. Wages expense in the income statement and accrued wages in the balance sheet are respectively: Select one: a. $306,000 : $0 b. $311,500 : $0 c. $311,500 : $5,500 d. $306,000 : $5,500

c p.163 (158) Adjustment Wages + $5,500 Accrued Expenses + $5,500 The correct answer is: $311,500 : $5,500

At the first of the month Maria paid a total of $2,400 for six months' rent in advance. When she recorded the payment, she entered $2,400 into the Prepaid Rent account. At the end of the month, what adjustment should Maria make? Select one: a. Decrease Prepaid Rent by $2,400 and decrease Rent Expense by $2,400. b. Increase Prepaid Rent by $400 and increase Rent Expense by $400. c. Decrease Prepaid Rent by $400 and increase Rent Expense by $400. d. None of the other options given

c p.165 (160) $2,400 / 6 = $400 The correct answer is: Decrease Prepaid Rent by $400 and increase Rent Expense by $400.

Nasturium Inc had the following opening account balances: Cash, $300; Accounts Payable, $900; Inventory, $1,500; Accounts Receivable, $2,400; Salaries Payable, $1,600; Notes Payable, $1,800, Store Equipment, $18,000. What is the Opening Owners Equity? Select one: a. $17,300 b. $22,200. c. There is insufficient information to determine the amount of owner's equity. d. $17,900.

d $22,200 - $4,300 =$17,900 p.144 (138) The correct answer is: $17,900.

On 1 June Smart Business borrowed $24,000 from the bank at an interest rate of 10%. At the end of June Smart bank had not paid any interest to the bank. Using months to calculate interest, the appropriate entry is Select one: a. Accounts Payable +$200 Interest Expense +$200 b. Cash - $200 Interest Expense +$200 c. Cash + $200 Interest Expenses +$200 d. Interest Expense + $200 Accrued Expenses +$200

d $24,000 * 10% / 12 = $200 Interest Expense + $200 Accrued Expenses +$200 The correct answer is: Interest Expense + $200 Accrued Expenses +$200