Accounting Final Exam
A Company recorded the following data: January 1 - beginning inventory: 400 units @ $1.00 each January 8 - purchase: 600 units @ $1.10 each January 12 - sale: 200 units The weighted average unit cost of the inventory at January 31 is: Select one: a. $1.10 b. $1.00 c. $1.06 d. $1.05
$1.06
On May 1, 2013, Maricel Advertising Company received $3,000 from Kathy Siska for advertising services to be completed by April 30, 2014. At December 31, 2013, $2,000 of the fees have been earned. The adjusting entry on December 31, 2013 by Maricel will include a: a. $2,000 debit to Unearned Fees. b. $2,000 credit to Unearned Fees. c. $1,000 debit to Fees Earned. d. $1,000 credit to Unearned Fees.
$2,000 debit to Unearned Fees.
An employee receives an hourly rate of $8, with time and a half for all hours in excess of 40 worked during a week. Payroll data for the current week is as follows: hours worked, 44; federal income tax withheld, $47.50; FICA tax rate, 8%; SUTA rate, 5%. a. $272.66 b. $276.34 c. $291.06 d. $320.16
$291.06
On the issue date, Rhoda Corporation sells $1,000,000 bonds at 103. The entry to record the sale will include a credit to Premium on Bonds Payable of: a. $0 b. $300,000 c. $30,000 d. $3,000
$30,000
If the month end bank statement shows a balance of $36,000, outstanding checks are $10,000, a deposit of $4,000 was in transit at month end, and a check for $600 was erroneously charged by the bank against our account, the correct balance in the bank account at month end is: Select one: a. $30,000 b. $41,400 c. $30,600 d. $29,400
$30,600
A plant asset cost $27,000 when it was purchased on January 1, 2006. It was depreciated by the straight-line method based on a 9-year life with no salvage value. On June 30, 2013, the asset was discarded with no cash proceeds. What gain or loss should be recognized on the retirement? Select one: a. $4,500 loss. b. $6,000 loss. c. $3,000 gain. d. No gain or loss.
$4,500 loss
B Company has sales revenue of $13,000, cost of goods sold of $8,000, and operating expenses of $3,000 for the year ended December 31. B Company's gross profit is: a. $2,000 b. $5,000 c. $10,000 d. $0
$5,000
RD Company's inventory records show the following: Units | Unit Cost --Inventory, January 1 10,000 | $9.00 --June 18 Purchase 9,000 | $8.00 --November 8 Purchase 6,000 | $7.00 A physical count of inventory on December 31 shows8,000 units on hand. Under the FIFO method, the December 31 inventory is: a. $72,000 b. $64,000 c. $58,000 d. $56,000
$58,000
WH Company provides for bad debts expense at the rate of 2% of Accounts Receivable. The following data are available at December 31 of the current fiscal year: Allowance for doubtful accounts, credit balance at Jan 1..........$ 21,000 Accounts written off as uncollectible during the year................. 13,000 Accounts Receivable at Dec 31.................................................3,000,000 The Allowance for Doubtful Accounts balance (after adjusting) at December 31 should be: a. $68,000 b. $50,000 c. $60,000
$60,000
During the current fiscal year, the SL Company had credit sales of $600,000 and granted sales discounts of $12,000. On January 1 of the current fiscal year, the Allowance for Doubtful Accounts had a credit balance of $15,000. During the current fiscal year, $25,000 of uncollectible accounts receivable were written off. Past experience indicates that 3% of net credit sales become uncollectible. What should be the adjusted balance of Allowance for Doubtful Accounts at December 31 of the current fiscal year? a. $8,000 b. $17,640 c. $7,640 d. $33,000
$7,640
As of December 31, 2013, Morley Company has liabilities of $5,000 and stockholders' equity of $7,000. It received revenues of $23,000 during the year ended December 31, 2013. What are the assets for Morley Company as of December 31, 2013? a. $25,000. b. $35,000. c. $2,000. d. $12,000.
12,000
F Company had 300 units of inventory on hand at January 1 costing $32 each. Purchases during January were as follows: Units Unit Cost --January 15 400 $33 --January 23 550 $34 --January 29 100 $35 A physical count of inventory on January 31 shows 450 units on hand. The cost of the inventory at January 31 under the LIFO method is: a. $14,550 b. 14,400 c. $14,900 d. $15,400
14,550
Buffon Company issues a $300,000, 10%, 20-year mortgage note on January 1. The terms provide for semiannual installment payments, exclusive of real estate taxes and insurance, of $17,483. After the first installment payment, the principal balance is: a. $300,000 b. $292,172 c. $297,517 d. $294,910
297,517
LP Company's inventory at December 31 (the last day of the accounting period) was $300,000 based on a physical count of goods on that date. The following items are in transit on that date and were not included in the count: 1. Goods costing $5,000 shipped FOB shipping point on December 29 to a customer and received by the customer on January 3. 2. Goods costing $10,000 were shipped FOBdestination on December 30 to a customer and received by the customer on January 4. What amount should LP Company report as inventory on its December 31 balance sheet?a. $290,000 b. $310,000 c. $315,000 d. $305,000
310,000
In the C Company, sales were $320,000, sales returns & allowances were $20,000, and cost of goods sold was $180,000. The gross profit rate was: a. 60% b. 56.3% c. 40% d. 37.5%
40%
On February 2, LW Company received a $6,000, 10%, four month note receivable. The cash to be received by LW Company when the note becomes due is: a. $200 b. $6,600 c. $6,200 d. $6,000
6,200
M Company made a purchase of merchandise on credit from C Corporation on August 3 for $3,000, terms 2/10, n/45. On August 10, M Company makes the appropriate payment to C Corporation. Assuming the use of the perpetual inventory method, the entry on August 10 for M Company is: a. Accounts Payable.......................3,000 Cash....................................................3,000 b. Accounts Payable.......................3,000 Inventory.............................................60 Cash.................................................2,940 c. Accounts Payable.......................3,000 Purchase Returns & Allowances.........60 Cash.................................................2,940 d. Accounts Payable.......................2,940 Cash...................................................2,940
Accounts Payable.......................3,000 Inventory.............................................60 Cash.................................................2,940
Which of the following are also called trade receivables? a. Accounts Receivable b. Income taxes refundable c. Advances to employees d. Other receivables
Accounts Receivable
The account that will appear on the post-closing trial balance is: a. Depreciation Expense. b. Fees Earned c. Accumulated Depreciation d. Dividends.
Accumulated Depreciation
Which of the following is the correct sequence of steps in the recording process? Select one: a. Analyzing, journalizing, posting. b. Analyzing, posting, journalizing. c. Posting, jounalizing, analyzing. d. Journalizing, analyzing, posting.
Analyzing, journalizing, posting.
Which of the following is NOT considered a part of the definition of internal control? a. Enhance the accuracy and reliability of its accounting records. b. Safeguard its assets. c. Assignment of responsibility to specific individuals. d. The plan of organization.
Assignment of responsibility to specific individuals.
Which of the following is NOT a physical control? a. Safety deposit boxes b. Employee identification badges c. Bonding employees who handle cash. d. Fences around storage areas
Bonding employees who handle cash.
On the date of issue, ARCO Corporation sells $2 million 5-year bonds at 97. The entry to record the sale will include the following debits and credits. Select one: a. Credit Bonds Payable $2,000,000; Debit Discount on Bonds Payable $500,000 b. Credit Bonds Payable $2,000,000; Debit Discount on Bonds Payable $60,000 c. Credit Bonds Payable $1,940,000; Debit Discount on Bonds Payable $0 d. Credit Bonds Payable $2,000,000; Debit Discount on Bonds Payable $6,000
Credit Bonds Payable $2,000,000; Debit Discount on Bonds Payable $60,000
Vicki Wagner Dance Studio bills a client for dancing lessons earned during the past week. The journal entry will include a credit to: Select one: a. Retained Earnings. b. Accounts Receivable. c. Unearned Dance Fees. d. Dance Fees Earned. Feedback
Dance fees earned
Cez Company returned defective goods costing $5,000 to B Company on March 19 for credit. The goods were purchased on March 10 on credit, terms 3/10, n/30. The journal entry by Cez Company on March 19 in receiving full credit is: a. Debit Accounts Payable for 5,000 Credit Purchase Discounts for 150 Credit Merchandise Inventory for 4,850 b. Debit Accounts Payable for 5,000 Credit Merchandise Inventory for 5,000 c. Debit Accounts Payable for 5,000 Debit Merchandise Inventory for 150 Credit Cash for 5,150 d. Debit Accounts Payable for 5,000 Credit Merchandise Inventory for 150 Credit Cash for 4,850
Debit Accounts Payable for 5,000 Credit Merchandise Inventory for 5,000
S Company made a purchase of merchandise on credit from VG Company on August 3 for $6,000, terms 3/10, n/30. On August 17, S Company makes the appropriate payment to VG Company. The entry on August 17 for S Company is: a. Debit Accounts Payable for 6,000 Credit Purchases Returns & Allowances for 180 Credit Cash for 5,820 b. Debit Accounts Payable for 5,820 Credit Cash for 5,820 c. Debit Accounts Payable for 6,000 Credit Merchandise Inventory for 180 Credit Cash for 5,820 d. Debit Accounts Payable for 6,000 Credit Cash for 6,000
Debit Accounts Payable for 6,000 Credit Merchandise Inventory for 180 Credit Cash for 5,820
On March 1 of the current year, Tom Zinc purchased a suit at the Fine Men's Shop. The suit cost $350 and Tom used his Fine Men's Shop credit card. The Fine Men's Shop charges 2% per month interest if payment on credit charges is not made within 30 days. On April 30 of the current year, Tom had NOT yet made his payment. What entry should the Fine Men's Shop make on April 30th? a. Debit Uncollectible Account and Credit Account Receivable for 350 b. Debit Accounts Receivable 7 Credit Interest Revenue for 7 c. Debit Accounts Receivable 357 Credit Interest Revenue 7 Credit Sales 350 d. Debit Bad Debts Expense 343 Debit Interest Expense 7 Credit Accounts Receivable 350
Debit Accounts Receivable 7 Credit Interest Revenue for 7
On February 15, G Company received a two month, 10%, $2,000 note from N. Vincent for the settlement of his open account. On April 15, N. Vincent failed to pay the amount due and dishonored the note. However, collection is expected by G. Company in May. The entry by G Company on April 15 is: a. Debit Accounts Receivable for $2,033 Credit Notes Receivable for $2,000 Credit Interest Income $33 b. Debit Accounts Receivable and Credit Notes Receivable for $2,000 c. Debit Bad Debts Expense and Credit Notes Receivable for $2,033 d. Debit Cash for $2,033 Credit Notes Receivable for $2,000 Credit Interest Revenue for $33
Debit Accounts Receivable for $2,033 Credit Notes Receivable for $2,000 Credit Interest Income $33
C Company decides that the past due account of SS Company is uncollectible. Under the allowance method, the $865 balance owed by SS Company is written off as follows: a. Debit Bad Debts Expense and Credit Accounts Receivable for 865 b. Debit Accounts Receivable and Credit Allowance for Doubtful Accounts for 865 c. Debit Allowance for Doubtful Accounts and Credit Accounts Receivable for 865 d. Debit Allowance for Doubtful Accounts and Credit Bad Debts Expense for 865
Debit Allowance for Doubtful Accounts and Credit Accounts Receivable for 865
On March 1, ET Company sells merchandise on account to BR Company for $7,000, terms 2/10, n/30. On March 3, BR Company returns $500 of the merchandise to ET Company. On March9, payment is received from BR Company for the balance due. The entry on March 9 by ET Company is: a. Debit Cash for 6,500 Credit Accounts Receivable for 6,500 b. Debit Cash for 7,000 Credit Accounts Receivable for 7,000 c. Debit Cash for 6.360 Debit Sales Discounts for 140 Credit Accounts Receivable for 6,500 d. Debit Cash 6,370 Debit Sales Discounts for 130 Credit Accounts Receivable for 6,500
Debit Cash 6,370 Debit Sales Discounts for 130 Credit Accounts Receivable for 6,500
On February 15, G Company received a two month, 10%, $2,000 note from N. Vincent for the settlement of his open account. On April 15 (the due date), N. Vincent pays G Company the balance due on that date. The entry by G Company on April 15 is: a. Debit Accounts Receivable for $2,033 Credit Notes Receivable for $2,000 Credit Interest Income $33 b. Debit Cash for $2,033 Credit Notes Receivable for $2,000 Credit Interest Revenue for $33 ] c. Debit Cash and Credit Notes Receivable for $2,000 d. Debit Cash and Credit Notes Receivable for $2,033
Debit Cash for $2,033 Credit Notes Receivable for $2,000 Credit Interest Revenue for $33
On July 9, G Company sells goods on credit to Ed Manet for $3,500, terms 1/10, n/60. G Company receives payment on July 18. The entry by G Company on July 18 is: a. Debit Cash for 3,465 Debit Sales Discounts for 35 Credit Accounts Receivable for 3,500 b. Debit Cash for 3,535 Credit Sales Discounts for 35 Credit Accounts Receivable for 3,500 c. Debit Cash for 3,500 Credit Sales Discounts for 35 Credit Accounts Receivable for 3,465 d. Debit Cash for 3,500 Credit Accounts Receivable for 3,500
Debit Cash for 3,465 Debit Sales Discounts for 35 Credit Accounts Receivable for 3,500
On August 28, R Company purchased merchandise from S Company for $2,375 on credit. Under the perpetual system the entry by R Company on August 28 is: a. Debit Accounts Payable for 2,375 Credit Merchandise Inventory for 2,375 b. Debit Merchandise Inventory for 2,375 Credit Accounts Payable for 2,375 c. Debit Sales for 2,375 Credit Accounts Payabl;e for 2,375 d. Debit Cash for 2,375 Credit Accounts Payable for 2,375
Debit Merchandise Inventory for 2,375 Credit Accounts Payable for 2,375
On February 15, G Company received a two month, 10%, $2,000 note from N. Vincent for the settlement of his open account. The entry by G Companyon February 15 is: a. Debit Cash and Credit Accounts Receivable for 2,000 b. Debit Cash and Credit Note Receivable for 2,000 c. Debit Notes Receivable and Credit Accounts Receivable of 2,000 d. Debit Accounts Receivable and Credit Notes Receivable for 2,000
Debit Notes Receivable and Credit Accounts Receivable of 2,000
On March 1, ET Company sells merchandise on account to BR Company for $7,000, terms 2/10, n/30. On March 3, BR Company returns $500 of the merchandise to ET Company. On March9, payment is received from BR Company for the balance due. The entry on March 3 by ET Company is: a. Debit Sales Returns and Allowances for 500 Credit Accounts Receivable for 500 b. Debit Sales Discounts for 500 Credit Cash for 500 c. Debit Sales for 500 Credit Cash for 500 d. Debit Sales for 500 Credit Accounts Receivable for 500
Debit Sales Returns and Allowances for 500 Credit Accounts Receivable for 500
Which of the following is NOT classified under the current asset section of the balance sheet? a. Prepaid Expenses. b. Supplies. c. Equipment. d. Cash.
Equipment.
Which of the following is NOT part of the accounting process? a. Identifying b. Financial decision making c. Recording d. Communicating
Financial decision making
On April 3 of the current year, SB Inc. issued a promissory note to BT Company that will mature in 90 days. The maturity date (due date) of the 90 day note is: a. July 3 b. July 2 c. July 4 d. July 1
July 2
Which of the following statements if FALSE? a. A company can safeguard its cash by using a bank as a depository and clearninghouse for checks received and checks written. b. The use of a bank contributes significantly to good internal control over cash. c. Most companies have only one bank account. d. Use of a bank minimizes the amount of currency that must be kept on hand.
Most companies have only one bank account.
Which of the following reconciling items would be added to the balance per bank to determine the adjusted balance per bank? -Deposits in transit -Outstanding checks -NSF checks a. Only outstanding checks would be added to the balance per bank. b. All three would all be added to balance per bank. c. Both deposits in transit and outstanding checks would be added to the balance per bank. d. Only deposits in transit would be added to the balance per bank.
Only deposits in transit would be added to the balance per bank.
Which of the following is NOT an example of an effective internal control measure? a. Prenumbering sales invoices. b. Requiring employees to take vacations. c. Bonding employees who handle cash. d. Permitting collusion among employees.
Permitting collusion among employees.
Storing cash in a company safe is an application of which internal control principle? a. Segregation of duties b. Establishment of responsibility c. Physical controls. d. Documentation procedures
Physical controls.
A single step income statement: a. Does not report Cost of Goods Sold. b. Reports operating income separately. c. Reports sales revenue and other revenues & gains in the revenues section of the income statement. d. reports gross profit
Reports sales revenue and other revenues & gains in the revenues section of the income statement.
Which of the following are contra-revenue accounts? Sales Returns & Allowances, Freight Out: a. Sales Returns & Allowances is a contra revenue, but Sales Discounts and Freight Out are not. b. Sales Returns & Allowances and Sales Discounts are contra revenue accounts, but Freight out is not. c. Sales Returns & Allowances and Freight Out are contra revenue accounts, but Sales Discounts is not. d. None of the three accounts are contra revenue accounts e. All three accounts are contra revenue accounts. f. Sales Discounts and Freight Out are contra revenue accounts, but Sales Returns & Allowances is not.
Sales Returns & Allowances and Sales Discounts are contra revenue accounts, but Freight out is not.
Which of the following statements concerning the limitations of internal control is correct? a. The costs of establishing control procedures should not exceed their expected benefit. b. A system of internal control should be infallible. c. Collusion among employees may result in more effective control. d. The human factor is unimportant.
The costs of establishing control procedures should not exceed their expected benefit.
One of the following statements about current assets is correct. The correct statement is: a. The time period for current assets is within one year after the balance sheet date or the company's operating cycle, whichever is longer. b. The operating cycle is the average time to collect accounts receivable in the process of earning revenue. c. Current assets are listed in the balance sheet in the order of magnitude. d. The time period for current assets is within one year after the balance sheet date or the company's operating cycle, whichever is shorter.
The time period for current assets is within one year after the balance sheet date or the company's operating cycle, whichever is longer.
C Company purchased inventory from P Company. The shipping costs were $400 and the terms of the shipment were FOB shipping point. C Company would have the following entry regarding the shipping charges. a. There is no entry on C Company's books for this transaction. b. Debit Merchandise Inventory for 400 Credit Cash for 400 c. Debit Freight Out for 400 Credit Cash for 400 d. Debit Freight Expense for 400 Credit Cash for 400
There is no entry on C Company's books for this transaction.
Inventory items on an assembly line in various stages of production are classified as: a. Raw materials b. Work in process c. Finished goods d. Merchandise inventory
Work in process
On October 2, DV Company has cash sales of $3,200 from merchandise having a cost of $2,500. The entries to record the day's cash sales will include: a. a $2,500 debit to Cost of Goods Sold b. a $3,200 credit to Cash c. a $2,500 debit to Merchandise Inventory d. a $2,500 debit to Accounts Receivable
a $2,500 debit to Cost of Goods Sold
In a period of inflation, the use of the LIFO method will result in: a. higher income taxes than FIFO. b. a better matching of costs and revenues than FIFO. c. a more realistic inventory than FIFO. d. higher net income than FIFO.
a better matching of costs and revenues than FIFO.
On October 4, T Corporation had credit sales of $2,500 from merchandise with a cost of $1,900. The entries to record the credit sales include: a. a debit of $2,500 to Merchandise Inventory b. a debit of $1900 to Merchandise Inventory c. a credit of $1,900 to Cost of Goods Sold d. a credit of $2,500 to Sales
a credit of $2,500 to Sales
Poindexter Co. pays a $500 dividend in cash. The effect on the specific items in the basic accounting equation is: a. an increase in Retained Earnings and a decrease in Cash. b. a decrease in Retained Earnings and a decrease in Cash. c. an increase in Accounts Receivable and a decrease in Retained Earnings. d. an increase in Salary Expense and a decrease in Cash.
a decrease in retained earnings and a decrease in cash
A trial balance will NOT balance if: Select one: a. a wrong amount is used in journalizing. b. incorrect account titles are used in journalizing. c. a journal entry is posted twice. d. a journal entry is only partially posted.
a journal entry is only partially posted
All of the following are intangible assets EXCEPT: a. accounts receivable. b. copyrights. c. goodwill.
accounts receivable
Golden Pork Company receives $400 from a customer on October 15 in payment of a balance due for services billed on October 1. The entry by Golden Pork Company will include a credit of $400 to: Select one: a. Service Revenue. b. Accounts Receivable. c. Notes Receivable. d. Unearned Service Revenue.
accounts reveivable
Financial statements are prepared directly from the: a. general journal. b. adjusted trial balance. c. trial balance. d. ledger.
adjusted trial balance.
The Relias Uptown Grill receives a bill of $400 from the Erml Advertising Agency. The owner, John Relias, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is: a. a decrease in Accounts Payable and an increase in Retained Earnings. b. a decrease in Cash and an increase in Accounts Payable. c. a decrease in Cash and an increase in Retained Earnings. d. an increase in Accounts Payable and a decrease in Retained Earnings.
an increase in accounts payable and a decrease in retained earnings
The post-closing trial balance contains only: a. income statement, balance sheet, and stockholders' equity statement accounts. b. income statement accounts. c. balance sheet and income statement accounts. d. balance sheet accounts.
balance sheet accounts.
Morreale Beaver Company buys a $12,000 van on credit. This transaction will affect the: a. balance sheet only. b. income statement and retained earnings statement only. c. income statement only. d. income statement, retained earnings statement, and balance sheet.
balance sheet only
Journal entries are required by the depositor for all of the following EXCEPT: a. Bank errors b. An NSF check c. Bank service charges d. Collection of a note receivable
bank errors
Land improvements do NOT include: a. fencing. b. driveways c. building sites. d. parking lots
building sites
Internal users of accounting data include: a. company officers b. investors c. customers d. economic planners
company officers
Which of the following appears on BOTH a single step and a multi step income statement? a. Gross profit b. Merchandise Inventory c. Cost of Goods Sold d. Income from operations
cost of goods sold
On October 3, Mike Baker Co. received a cash payment for services previously billed to a client. The company paid its telephone bill, and it also bought equipment on credit. For the three transactions, at least one of the entries will include a: Select one: a. debit to Accounts Receivable. b. credit to Retained Earnings. c. credit to Accounts Payable. d. credit to Notes Payable.
credit to accounts payable
Szykowny Co. buys a machine from Scott Company paying half in cash and putting the balance on account. The journal entry for this transaction by Szykowny will include a: Select one: a. debit to Machinery and a credit to Notes Payable. b. credit to Accounts Payable and a credit to Cash. c. debit to Supplies and a credit to Cash. d. credit to Notes Payable and a credit to Cash.
credit to accounts payable and credit to cash
On June 30, Wian Marketing Services is preparing its financial statements. $600 of fees were earned in June for which payment had NOT been collected prior to June 30. The adjusting entry at June 30 is: a. debit Fees Earned $600; credit Accounts Receivable $600. b. debit Unearned Fees $600; credit Fees Earned $600. c. debit Fees Earned $600; credit Unearned Fees $600. d. debit Accounts Receivable $600; credit Fees Earned $600.
debit Accounts Receivable $600; credit Fees Earned $600.
Income Summary has a credit balance of $12,000 in J. Spencer, Co. after closing revenues and expenses. The entry to close Income Summary is: a. debit Income Summary $12,000; credit Dividends $12,000. b. credit Income Summary $12000; debit Dividends $12,000. c. debit Income Summary $12,000; credit Retained Earnings $12,000. d. credit Income Summary $12,000; debit Retained Earnings $12,000.
debit Income Summary $12,000; credit Retained Earnings $12,000.
Demaet Cruise Lines purchased a five-year insurance policy for its ships on April 1, 2013 for $100,000. Assuming that April 1 is the effective date of the policy, the adjusting entry on December 31, 2013 is: a. debit Prepaid Insurance $15,000; credit Insurance Expense $15,000. b. debit Insurance Expense $5,000; credit Prepaid Insurance $5,000. c. debit Insurance Expense $15,000; credit Prepaid Insurance $15,000. Correct d. debit Insurance Expense $20,000; credit Prepaid Insurance $20,000. Feedback
debit Insurance Expense $15,000; credit Prepaid Insurance $15,000.
Gardner Company purchased a truck from Kutner Co. by issuing a 6-month 10% note payable for $30,000 on November 1. On December 31, the accrued expense adjusting entry is: a. debit Interest Expense $500; credit Interest Payable $500. b. debit Interest Expense $6,000; credit Interest Payable $6,000 c. no entry is required. d. debit Interest Expense $3,000; credit Interest Payable $3,000.
debit Interest Expense $500; credit Interest Payable $500.
The physical count of BIM Company inventory had a cost of $2,700 at year end and the unadjusted balance in the Merchandise Inventory account on that same date was $2,500. BIM Company will have to make which of the following entries: a. debit Income Summary for 200 credit Merchandise Inventory for 200 b. debit Cost of Goods Sold for 2,500 credit Merchandise Inventory for 2,500 c. debit Cost of Good Sold for 200 credit Merchandise Inventory for 200 d. debit Merchandise Inventory for 200 credit Cost of Goods Sold
debit Merchandise Inventory for 200 credit Cost of Goods Sold
Cathy Cline, an employee of the Wheeler Company, will NOT receive her paycheck until April 2. Based on services performed from March 15 to March 30, her salary was $800. The adjusting entry for Wheeler Company on March 31 is: a. debit Salaries Expense $800; credit Cash $800. b. debit Salaries Payable $800; credit Cash $800. c. no entry is required. d. debit Salaries Expense $800; credit Salaries Payable $800.
debit Salaries Expense $800; credit Salaries Payable $800.
The beginning balance of Supplies for Lu Inc. was $900. During the year, additional supplies were purchased for $450. At the end of the year a count indicates $700 of supplies on hand. The adjusting entry at December 31 is: a. debit Supplies Expense $250; credit Supplies $250. b. debit Supplies $450; credit Supplies Expense $450. c. debit Supplies $650; credit Supplies Expense $650. Incorrect d. debit Supplies Expense $650; credit Supplies $650.
debit Supplies Expense $650; credit Supplies $650.
McClory Company purchases equipment for $900 and supplies for $300 from Rudnicky Co. for $1,200 cash. The entry for this transaction will include a: Select one: a. debit to Equipment $900 and a debit to Supplies $300 for McClory. b. credit to Cash for Rudnicky. c. debit to Equipment $900 and a debit to Supplies Expense $300 for Rudnicky. d. credit to Accounts Payable for McClory.
debit to Equipment $900 and a debit to Supplies $300 for McClory.
On October 1, 2012, Douglass Company issued a $28,000, 10%, nine-month interest-bearing note. If the company is preparing financial statements at December 31, 2012, the adjusting entry for accrued interest will include a: Select one: a. debit to Interest Expense of $1,050. b. credit to Interest Payable of $1,400. c. debit to Interest Expense of $700. d. credit to Notes Payable of $700.
debit to Interest Expense of $700.
Credits: a. decrease both assets and liabilities. b. increase assets and decrease liabilities. c. decrease assets and increase liabilities. d. increase both assets and liabilities.
decrease assets and increase liabilities
When the allowance method of recognizing bad debts expense is used, the entry to recognize that expense: a. has no effect on net income. b. increases net income c. has no effect on current assets d. decreases current assets
decreases current assets
Kevin Walsh, Inc. pays a $300 cash dividend. The entry for this transaction will include a debit of $300 to: Select one: a. Salaries Expense. b. Dividends Expense. c. Dividends. d. Dividends Income.
dividends
An account which is increased by a debit is a: Select one: a. revenue account. b. retained earnings account. c. dividends account. d. liability account.
dividends account
A net loss will result during a time period when: a. expenses exceed revenues. b. assets exceed stockholders' equity. c. assets exceed liabilities. d. revenues exceed expenses.
expenses exceed revenue
The matching principle (expense recognition) dictates that: a. each debit be matched with an equal credit. b. the fiscal year should match the calendar year. c. revenue should be recognized in the accounting period in which it is earned. d. expenses should be matched with revenues.
expenses should be matched with revenues.
When bonds are sold at face value, on the issue date, Bonds Payable is credited for: Select one: a. face value. b. call price. c. conversion price. d. maturity value plus interest payable.
face value.
Which of the following is not an expense to an employer? a. State unemployment taxes. b. FICA taxes. c. Federal unemployment taxes. d. Federal income tax withholdings
federal income tax withholdings
The market rate of interest for a bond issue which sells for more than its par value is: a. independent of the interest rate stated on the bond. b. less than the interest rate stated on the bond. c. higher than the interest rate stated on the bond. d. equal to the interest rate stated on the bond.
higher than the interest rate stated on the bond.
In the balance sheet, ending merchandise inventory is reported a. in current assets immediately following accounts receivable b. in current assets immediately following prepaid expenses c. in current assets immediately following cash d. under property, plant, & equipment
in current assets immediately following accounts receivable
Which of the following statements is INCORRECT? Property, plant, and equipment: a. includes tangible resources that are held for use and not for sale. b. is reported in the balance sheet at cost less accumulated depreciation. c. includes long-lived, non-physical resources such as patents and copyrights. d. includes land, buildings, equipment, and machinery.
includes long-lived, non-physical resources such as patents and copyrights.
A term which is NOT synonymous with property, plant, and equipment is: a. intangible assets b. plant assets c. long-lived tangible assets d. fixed assets
intangible assets
The multi-step income statement for a merchandising company shows each of the following EXCEPT: a. Investing Activities Section b. Cost of Goods Sold c. A Sales Revenue Section d. Gross Profit
investing activities section
Goodwill from the acquisition of a business enterprise: a. should be expensed in the year of acquisition. b. is not an intangible asset. c. is granted by the federal government. d. is an asset that is not subject to amortization.
is an asset that is not subject to amortization
Natural resources include all of the following EXCEPT: a. oil deposits. b. land improvements. c. standing timber. d. mineral deposits
land improvements
The market rate of interest for a bond issue which sells for more than its par value is: a. independent of the interest rate stated on the bond. b. less than the interest rate stated on the bond. c. higher than the interest rate stated on the bond. d. equal to the interest rate stated on the bond.
less than the interest rate stated on the bond
The account Unearned Revenues is a(n): a. revenue account. b. liability account. c. asset account. d. contra revenue account.
liability account.
In a period of rising prices, FIFO will have a: a. lower cost of goods sold than LIFO. b. lower net income than LIFO. c. lower income tax expense than LIFO. d. lower net purchases than LIFO.
lower cost of goods sold than LIFO.
Current liabilities: a. are listed in the balance sheet in order of their expected maturity. b. must reasonably be expected to be paid from existing current assets or through the creation of other current liabilities. c. should not include long-term debt that is expected to be paid within the next year. d. must reasonably be expected to be paid within one year or the operating cycle, whichever is shorter.
must reasonably be expected to be paid from existing current assets or through the creation of other current liabilities.
Balance sheet accounts are considered to be: a. retained earnings accounts. b. nominal accounts. c. temporary stockholders' equity accounts. d. permanent accounts
permanent accounts
A company might carry on many activities that do NOT represent business transactions such as: a. paying wages. b. borrowing money from the bank. c. placing an order for merchandise with a supplier. d. using office supplies.
placing an order for merchandise with a supplier
The factor that is NOT relevant in computing depreciation is: a. Salvage value. b. replacement value. c. Useful life. d. Cost.
replacement value
The monetary unit assumption: a. requires that only transaction data capable of being expressed in terms of money be included in the accounting records of the economic entity. b. is only used for financial statements of banks. c. provides that the unit of measure fluctuates over time. d. is unimportant in applying the cost principle.
requires that only transaction data capable of being expressed in terms of money be included in the accounting records of the economic entity.
Long-term investments are: a. reported in the balance after property, plant, and equipment. b. resources that are intended for use or consumption. c. resources that may include rights and privileges granted by governmental authority. d. resources that are not expected to be realized in cash within one year or the operating cycle, whichever is longer.
resources that are not expected to be realized in cash within one year or the operating cycle, whichever is longer.
The revenue recognition principle recognizes that: a. the economic life of a business can be divided into artificial time periods. b. expenses should be matched with revenues. c. revenue should be recognized in the accounting period in which services are performed. d. the fiscal year should correspond with the calendar year.
revenue should be recognized in the accounting period in which services are performed.
The dividends account is a(n): a. revenue account. b. permanent account. c. temporary account. d. expense account.
temporary account.
Which of the following would NOT appear on the DeFlippo Company's balance sheet? a. Retained earnings. b. Utilities expense. c. Accounts receivable. d. Wages payable.
utilities expense
