Acct. 200 Final Exam
On a classified balance sheet, short-term investments are classified as (a) Long-Term Investments (b) Property, Plant, and Equipment (c) Intangible Assets (d) Current Assets
D - Current Assets
When a company receives a utility bull, but will NOT pay it right away, it should (a) Debit Utilities Expense and Credit Accounts Receivable (b) Make no entry until the bill is paid (c) Debit Accounts Payable and Credit Utilities Expense (d) Debit Utilities Expense and Credit Accounts Payable
D - Debit Utilities Expense and Credit Accounts Payable
The payment of a Liability (a) Decreases assets and increases liabilities (b) Decreases assets and stockholders' equity (c) Increases assets and decreases liabilities (d) Decreases assets and liabilities
D - Decreases assets and liabilities
Which of the following will NOT require an adjusting entry? (a) NSF checks (b) Book erros (c) Bank service charges (d) Deposits in transit
D - Deposits in transit
Ownership passes to the buyer when purchased goods are received from a public carrier of the goods are shipped (a) FOB shipping point (b) FOB buyer (c) FOB shipper (d) FOB destination
D - FOB destination
Collection of a $710 Accounts Receivable (a) Increases an asset $710; decrease a liability $710 (b) Decreases an asset $710; decrease a liability $710 (c) Decreases a liability $710; increase stockholders' equity $710 (d) Increases an asset $710; decreases an asset $710
D - Increases an asset $710; decreases an asset $710
On August 1, Luang Corporation signed a $30,000, 14%, 2-year note to help finance renovations being made to the corporation headquarters. Assuming interest is accrued only when the year ends on December 31, the appropriate journal entry for the first year would be (a)Interest Expense $4,200 -Notes Payable $4,200 (b)Interest Expense $1,750 -Notes Payable $1,750 (c)Interest Expense $4,200 -Interest Payable $4,200 (d)Interest Expense $1,750 -Interest Payable $1,750
D - Interest Expense $1,750 -Interest Payable $1,750
Which of the following is true of the FOB Inventory method? (a) It assumes that the cost of the earliest unites purchased are the first to be allocated to the ending Inventory (b) It assumes that the cost of the earliest unites purchased are the last to be allocated to the beginning Inventory (c) It assumes that the cost of the earliest units purchased are the last to be allocated to the beginning Inventory (d) It assumes that the cost of the earliest units purchased are the first to be allocated to Cost of Goods Sold
D - It assumes that the cost of the earliest unites purchased are the first to be allocated to Cost of Goods Sold
For which of the following will an adjusting entry be required as the result of bank reconciliation? (a) Outstanding checks (b) Deposits in transit (c) Bank errors (d) NSF checks
D - NSF checks
Windsor, Inc. reported a Net Loss of $12,900 for the year ended December 21, 2022. During the year, Accounts Receivable decreased $6,450, Inventory increased $10,320, Accounts Payable increased by $12,900, and Depreciation Expense of $7,740 was recorded. During 2022, Operating Activities (a) Used Net Cash of $3,870 (b) Used Net Cash of $9,030 (c) Provided Net Cash of $9,030 (d) Provided Net Cash of $3,870
D - Provided Net Cash of $3,870
The board of director of Bosco Company declared a Cash Dividend on November 15, 2020, be paid on December 15, 2020, to Stockholders owning the stock on November 30, 2020. Given these facts, the date of November 30, 2020, is referred to as the (a) Payment Date (b) Ex-Dividend Date (c) Declaration Date (d) Record Date
D - Record Date
Net Income will result during a time period when (a) Assets exceed Liabilities (b) Assets exceed Revenues (c) Expenses exceed Revenues (d) Revenues exceed Expenses
D - Revenues exceed Expenses
Stock Dividends and Stock Splits have the following effects on Retained Earnings: Stock Splits- (a) No change, Stock Dividends- No change Stock Splits- (b) Increases, Stock Dividends- No change Stock Splits- (c) Decreases, Stock Dividends- Decreases Stock Splits- (d) No change, Stock Dividends- Decreases
D - Stock Splits (d) No change, Stock Dividends- Decreases
Which of the following statements below is true? (a) Both deposits in transit and outstanding checks are deducted from the balance per the bank statement during the bank reconciliation process (b) Both deposits in transit and outstanding checks are added to the balance per the bank statement during the bank reconciliation process (c) Deposits in transit re deducted from the balance per the bank statement, and outstanding checks are deducted to the balance per the bank statement during the bank reconciliation process. (d) The deposits in transit are added to the balance per the bank statement, and outstanding checks are deducted from the balance per the bank statement during the bank reconciliation process
D - The deposits in transit are added to the balance per the bank statement, and outstanding checks are deducted from the balance per the bank statement during the bank reconciliation process
What is the formula for the basic accounting equation?
Assets = Liabilities + Stockholders' Equity
These are selected account balances on December 31, 2022. (a) Land $146,000 (b) Land (held for future) $244,500 (c) Buildings $1,136,000 (d) Inventory $213,000 (e) Equipment $660,000 (f) Furniture $143,000 (g) Accumulated Depreciation $450,000 What is the total amount of Property, Plant, and Equipment that will appear on the balance sheet?
$1,635,000 ( add Land to Buildings, Equipment, Furniture, and sub total from Acc. Dep.)
Based on the following data, what is the amount of current assets? (a) Accounts Payable - $60,500 (b) Accounts Receivable - $116,000 (c) Cash - $74,000 (d) Intangible Assets - $116,000 (e) Inventory - $145,000 (f) Long-Term Investments - $162,500 (g) Long-Term Liabilities -$210,500 (h) Short-Term Investments -$85,000 (i) Notes Payable - $57,500 (j) Property, Plant, Equipment -$1,350,000 (k) Prepaid Insurance - $2,000
$422,000
Ownership passes to the buyer when the public carrier accepts the goods if the goods are shipped (a) FOB shipping point (b) FOB buyer (c) FOB shipper (d) FOB destination
A - FOB shipping point
The Interest on a $15,000, 15%, 30-day Note Receivable is (Use 360 days for calculation) (a) $100 (b) $300 (c) $600 (d) $200
A - $100
On October 1, 2022, Oriole Company places a new asset into service. The cost of the asset is $98,500 with an estimated 5-year life and $20,500 salvage value at the end of its useful life. What is the Depreciation Expense for 2022 if Oriole Company uses the straight-line method of depreciation? (a) $3,900 (b) $9,850 (c) $19,700 (d) $4,925
A - $3,900
If beginning Inventory if $60,000, Cost of Goods Sold purchased $380,000, Sales Revenue is $800,000 and ending Inventory is $50,000, how much is Cost of Goods Sold under a periodic system? (a) $390,000 (b) $410,000 (c) $420,000 (d) $440,000
A - $390,000
Jones Company collected the following information to prepare its May bank reconciliation: Cash balance per books, May 31 $5,300 Deposits in transit 510 Notes receivable with interest collected by bank 580 Bank service charges 30 Outstanding checks 180 NSF check 150 How much is the adjusted cash balance per books on May 31? (a) $5,700 (b) $5,810 (c) $6,210 (d) $5,660
A - $5,700
On November 1, 2021, Carla Vista Co. places a new asset into service. The cost of the asset is $77,000 with an estimated 10-year life and $7,000 salvage value at the end of its useful life. What is the Depreciation Expense for 2022 id Carla Vista Co. uses the straight-line method of depreciation? (a) $7,000 (b) $3,850 (c) $1,750 (d) $1,167
A - $7,000
The following data is available for Sheridan Company at December 31, 2022: Common Stock. par $10 (authorized 27,500 shares) $220,000 Treasury Stock (at cost $15 per share) $1,200 Based on the data, how many shares of Common Stock are issued? (a) 22,000 (b) 24,670 (c) 21,920 (d) 27,500
A - 22,000
The following data is available for Pharaoh Company at December 31, 2022: Common Stock, par $10 (authorized 33,000 shares) $231,000 Treasury Stock (at cost $15 per share) $1,125 Based on the date, how many shares of Common Stock are outstanding? (a) 23,025 (b) 23,100 (c) 26,325 (d) 33,000
A - 23,025
In preparing a statement of cash flows, a conversion of bonds into Common Stock will be reported in (a) A seperate schedule or note to the financing statements (b) The Stockholders' Equity section (c) The financing section (d) The "extraordinary" section
A - A separate schedule or note to the financing statements
A gain or loss on disposal of a plant asset is determined by comparing the (a) Book value of the asset with the proceeds received from its sale (b) Original cost of the asset with the proceeds received from its sale (c) Book vale of the asset with the asset's original cost (d) Replacement cost of the asset with the asset's original cost
A - Book vale os the asset with the proceeds received from its sale
Which of the following statements about a periodic inventory system is true? (a) Companies determine cost of goods sold only ay the end of the accounting period (b) Companies continuously maintain detailed records of cost of each inventory purchase and sale (c) The periodic system provides better control over inventories than a perpetual system (d) The increased use of computerized system has increased the use of the periodic system
A - Companies determine cost of goods sold only at the end of the accounting period
Which one of these statements about the accrual-basis of accounting is false? (a) Companies record revenue only when they receive cash, and record expenses only when they pay out cash (b) The basis is in accord with generally accepted accounting principles (c) Companies record events that change a company's financial statements in the period in which the events occur (d) Companies recognize revenue in the period in which the performance obligation is satisfied
A - Companies record revenue only when they receive cash, and record expenses only when they pay out cash
Concord Corporation issues 5,800, 10 year, 8%, $1,000 bond dated January 1, 2022, at 103. The journal entry to record the issuance will a show a (a) Credit to Bonds Payable for $5,800,000 (b) Credit to Cash for $5,974,000 (c) Debit to Cash for $5,800,000 (d) Debit to Premium on Bonds Payable for $174,000
A - Credit to Bonds Payable for $5,800,000
In a classified balance sheet, assets are usually classified as (a) Current Assets; Long-Term Investments; Property, Plant, and Equipment; and Intangible Assets (b) Current Assets; Long-Term Investments; Tangible Assets; and Intangible Assets (c) Current Assets; Long-Term Investments; Property, Plant, and Equipment; and Common Stock (d) Current Assets; Long-Term Assets; Property, Plant, and Equipment; and Intangible Assets
A - Current Assets; Long-Term Investments; Property, Plant, and Equipment; and Intangible Assets
A current assets is (a) Expected to be converted to cash or used in the business within one year or one operating cycle, whichever is longer. (b) The last asset purchased by a business (c) Usually found as a separate classification in the income statement (d) An asset which is currently being used to produce a product or service
A - Expected to be converted to cash or used in a business within one year or one operating cycle, whichever is longer.
If the market rate of interest is 10%, a $9,500, 11%, 10-year bond that pays interest annually would sell at an amount (a) Greater than face value (b) Equal to face value (c) That cannot be determined (d) Less than face vale
A - Greater the face value
During 2014, Gibson Company assets decreases $50,000 and its liabilities decreases $90,000. Its stockholders' equity (a) Increases $40,000 (b) Decreases $140,000 (c) Decreases $40,000 (d) Increases $140,000
A - Increases $40,000 (sub. $90,000 from $50,000)
Vaughn Manufacturing reported a Net Loss of $12,240 for the year ended December 31, 2022. During the year. Accounts Receivable decreased $28,560, Inventory increased $20,400, Accounts Payable increased by $30,600, and Depreciation Expense of $24,480 was recorded. During 2022, Operating Activities (a) Provided Net Cash of $51,000 (b) Used Net Cash of $51,000 (c) Used Net Cash of $14,280 (d) Provided Nat Cash of $75,480
A - Provided Net Cash of $51,000
During January 2022, Sunland Company paid a cash dividends of $1,920. This transaction (a) Reduces Stockholder's Equity by $1,920 (b) Increases Expenses by $1,920 (c) Increases Stockholders' Equity by $1,920 (d) Reduces Net Income by $1,920
A - Reduces Stockholders' Equity by $1,920
Use the basic accounting equations to answer these questions. (a) The liabilities of Blossom Company are $93,700 and the stockholders' equity is $240,000. What is the amount of Blossom's total assets? (b) The total assets of Splish Company are $193,000 and its stockholders' equity is $84,000. What is the amount of its total liabilities? (c) The total assets of Ayayai Co. are $890,000 and its liabilities are equal to one-fourth of its total assets. What is the amount of Ayayai's stockholders' equity?
A. $333,700 (add $93,700 and $240,000) B. $109,000 (sub. $193,000 from $84,000) C. $667,500
Indicate whether each of these items is an asset, a liability, or a part of stockholders' equity.
A. Accounts Receivable - Asset B. Salaries and Wages Payable - Liability C. Equipment - Asset D. Supplies - Asset E. Common Stock - Stockholders' Equity F.Notes Payable - Liability
Eskimo Pie Corporation markets a broad range of frozen treats, including its famous Eskimo Pie ice cream bars. The following items were taken from a recent income statement and balance sheet. In each case, identify whether the item would appear on the balance sheet or income statement.
A. Income tax expense - Income Statement B. Inventory - Balance Sheet C. Accounts Payable - Balance Sheet D. Retained Earnings - Balance Sheet E. Equipment - Balance Sheet F. Sales Revenue - Income Statement G. Cost of goods sold - Income Statement H. Common Stock - Balance Sheet I. Accounts Receivable - Balance Sheet J. Interest Expense - Income Statement
Swifty Corporation uses the Percentage-of-Receivables basis to record Bad Debt Expense and concludes that 4% of Accounts Receivable will become uncollectible. Accounts Receivable are $417,800 at the end of the year, and the Allowance for Doubtful Accounts has a credit balance $2,657. What amount is made for the adjustment to Bad Debt Expense? (a) $16,712 (b) $14,055 (c) $19,369 (d) $2,657
B - $14,055
Ending Inventory is $10,000, beginning Inventory is $20,000, and Cost of Goods Purchased is $25,000. How much is Cost of Goods Sold? (a) $45,000 (b) $35,000 (c) $25,000 (d) $15,000
B - $35,000 (add $10,000 to $25,000)
Sage Hill Company's Accounts Receivable arising from skas to customers amounted to $95,000 and $83,000 at the beginning and end of the year, respectively. Income reported on the Income Statement for the year was $361,000. Exclusive of the effect of other adjustments, the cash flows from Operating Activities to be reported on the statement of cash flows is (a) $349,000 (b) $373,000 (c) $361,000 (d) $444,000
B - $373,000
Splish Brothers Inc. reported Net Income of $394,000 for the year. During the year, Accounts Receivable increased by $29,000, Accounts Payable decreased by $12,000 and Depreciation Expense of $61,000 was recorded. Net Income cash provided by Operating Activities for the year is (a) $374,000 (b) $414,000 (c) $394,000 (d) $348,000
B - $414,000
On May 1, 2022, Kingbird, Inc. had beginning Inventory consisting of 340 units with a unit cost of $8. During May, the company purchased Inventory as follows: - 680 units at $8 -1030 units ar $9 The company sold 1710 units during the month $14 per unit. Kingbird uses the average cost method. The average cost per unit for May is (a) $8.0 (b) $8.5 (c) $8.6 (d) $9.0
B - $8.5
An investment by the stockholders in a business increase (a) Liabilities and Stockholders' Equity (b) Assets and Stockholders' Equity (c) Assets only (d) Assets and Liabilities
B - Assets and Stockholders' Equity
Which statement presents information as of a specific point in time? (a) Income Statement (b) Balance Sheet (c) Statement of Cash Flows (d) Retained Earnings Statement
B - Balance Sheet
Blue Manufacturing Corporation purchased 2,900 shares of its own perviously issued $10 par Common Stock for $87,000. As a result of this event, (a) Blue's Common Stock account decreases $29,000 (b) Blue's total Stockholders' Equity decreased $87,000 (c) Blue's Paid-In Capital in Excess of Par Value account decreases $58,000 (d) All of these answer choices are correct
B - Blue's total Stockholder's Equity decreased $87,000
A company that receives money in advance of preforming a service (a) Debits Cash and Credits Prepaid Insurance (b) Debits Cash and Credits Unearned Service Revenue (c) Debits Unearned Service Revenue and Credits Accounts Payable (d) Debits Cash and Credits Accounts Payable
B - Debits Cash and Credits Unearned Service Revenue
The acquisition of Treasury Stock by a corporation (a) Requires that a gain or loss be recognized on the Income Statement (b) Decreases its total Assets and total Stockholders' Equity (c) Increase its total Assets and total Stockholder's Equity (d) Has no effect on total Assets and Total Stockholders' Equity
B - Decreases its total Assets and total Stockholders' Equity
What kind of classification is cost of goods sold? (a) Asset (b) Expense (c) Lability (d) Revenue
B - Expense
Saira works for a sports franchise, which pays wages and salaries earned on monthly basis. a new accountant was hired by the sports franchise in late May. Due to inexperience, the new accountant failed to accrue Saira's salary for May. What is the impact on the May 31 financial statements of the sports franchise? (a) Revenues are overstated; Net Income is understated (b) Expenses are understated; Net Income is overstated (c) Liabilities are understates; Assets are overstated (d) Liabilities are overstates; Retained Earnings are understated
B - Expenses are understated; Net Income are overstated
Assume that the Safferstein Corporation uses the indirect method to depict cash flows. Indirect where, if at all, long-term debt retired with cash would be reported on the statement of cash flows (a) Operating Activities section (b) Financing Activities section (c) Does not represent cash flows (d) Investing Activities section
B - Financing Activities section
In which balance sheet section would trademarks be reported? (a) Property, Plant, and Equipment (b) Intangible Assets (c) Investments (d) Current Assets
B - Intangible Assets
Under what system is Cost of Goods Sold determined at the end of an accounting period? (a) Single entry Inventory system (b) Periodic Inventory system (c) Double entry Inventory system (d) Perpetual Inventory system
B - Periodic Inventory system
Buildings are classified on the balance sheet as (a) A long-term investment (b) Property, Plant, and Equipment (c) An intangible asset (d) A current asset
B - Property, Plant, and Equipment
The general accepted accounting principle which dictates that revenue by recognized in the accounting period in which the performance obligation is satisfied is the (a) Accrued Revenues Principles (b) Revenues Recognition Principles (c) Expense Recognition Principles (d) Periodicity Assumption
B - Revenues Recognition Principles
Which following accounts normally have credit balances? (a) Revenues, Liabilities, and Dividends (b) Revenues, Liabilities, and Retained Earnings (c) Revenues, Liabilities, and Assets (d) Revenues, Liabilities, and Expenses
B - Revenues, Liabilities, and Retained Earnings
At December 31, 2017, before any year-end adjustments, MaCarty Company's Prepaid Insurance account had a balance of $2,700. It was determined that $1,500 of the Prepaid Insurance had expired. The adjusted balance for insurance. Expense for the year would be (a) $2,700 (b) $1,900 (c) $1,500 (d) $1,200
C - $1,500
Springer Company listed outstanding checks totaling $4,500 on its September bank reconciliation. In October, the company issued checks totaling $45,700. The October bank statement shows that checks totaling $39,800 cleared the bank. In addition, a check from one of Springer's customers in the amount of $500 was returned as NSF. The outstanding checks on the October bank reconciliation should total (a) $5,900 (b) $9,900 (c) $10,400 (d) $1,400
C - $10,400 (sub. $45,700 from $39,800 them add $4,500)
Kam Company has the following units and costs: Inventory, Jan. 1 (Units) $8,000 (Unit Costs) $11 Purchase, June 19 (Units) $19,000 (Unit Costs) $12 Purchase, Nov. 8 (Units) $5,000 (Unit Costs) $13 If $9,000 units are on hand at December 31, what is the cost of the ending Inventory under FIFO using a periodic Inventory system? (a) $99,000 (b) $108,000 (c) $113,000 (d) $117,000
C - $113,000
The Interest on a $21,500, 15%, 1-year Note Receivable is (a) $22,850 (b) $24,725 (c) $3,225 (d) $21,500
C - $3,225
Martin Company purchased $4,200 of merchandise on March 1, with credit terms of 3/10, n/30. If Martin pays on March 1, what is the cost of this purchase? (a) $4,200 (b) $3,780 (c) $4,074 (d) $3,864
C - $4,074
a company sells a plant asset that originally cost $400,000 for $185,000 on December 31, 2022. The Accumulated Depreciation account had a balance of $160,000 after the current year's depreciation of $40,000 had been recorded. The company should be recognize a (a) $55,000 gain on disposal (b) $215,000 loss on disposal (c) $55,000 loss on disposal (d) $150,000 loss on disposal
C - $55,000 lesson disposal ( sub $400,000 from $185,000 and $160,000)
As used in a bank reconciliation, how are deposits in transit handled? (a) Deducted from the book balance (b) Added to the book balance (c) Added to the bank balance (d) Deducted from the bank balance
C - Added to the bank balance
If services are rendered for cash, then (a) Stockholders' Equity will decrease (b) Liabilities will increase (c) Assets will increase (d) Liabilities will decrease
C - Assets will increase
Which accounts normally have debit balances? (a) Assets, Expenses, and Revenues (b) Assets, Expenses, and Retained Earnings (c) Assets, Expenses, and Dividends (d) Assets, Liabilities, and Dividends
C - Assets, Expenses, and Dividends
Which of the following is generally NOT classified as a current liability? (a) Salaries and Wages Payable (b) Accounts Payable (c) Bonds Payable (d) Taxes Payable
C - Bonds Payable
Myers and Company sold $1,800 of merchandise on account to Oscar, Inc. on March 1 with credit terms of 2/10, n/30. Oscar returned $500 of the merchandise due to poor quality on March 3. If Oscar pays for the purchase on March 11, what entry does Myers make to record receipt of the payment? (a)Cash $1,764 -Accounts Receivable $1,764 (b)Cash $1,800 -Sales Returned and Allowance $500 -Accounts Receivable $1,300 (c)Cash $1,274 -Sales Discount $26 -Accounts Receivable $1,300 (d)Cash $1,800 -Sales Discount $36 -Accounts Receivable $1,764
C - Cash $1,274 -Sales Discount $26 -Accounts Receivable $1,300
What type of accounts are Sales Returns and Allowances and Sales Discounts? (a) Contra Asset accounts (b) Expense accounts (c) Contra Revenue accounts (d) Contra Expense accounts
C - Contar Revenue accounts
Cosmos Corporation, which uses a perpetual inventory system, purchased $2,000 of merchandise on July 5 on account. Credit terms were 2/10, n/30. It returned $400 of the merchandise on July 9. Which of the following is one effect when Cosmos pays its bill on July 21? (a) Debit to Accounts Payable for $2,000 (b) Credit to Accounts Payable for $1,600 (c) Credit to Cash for $1,600 (d) Debit to Cash for $1,600
C - Credit to Cash for $1,600
which of the following would NOT be classified as a long-term liability? (a) Lease Liabilities (b) Mortgage Payable (c) Current Maturities of Long-Term Debt (d) Bonds Payable
C - Current Maturities of Long-Term Debt
In calculating cash flows from Operating Activities using the indirect method, a gain on the sale of equipment is (a) Added to Net Income (b) Not reported on a statement of cash flows (c) Deducted from Net Income (d) Ignored because it does not affect cash
C - Deducted from Net Income
Assume that the Zahler Corporation uses the indirect method to depict cash flows. Indirect where, if at all, Treasury Stock purchased with cash would be classified on the statement of cash floes (a) Does not represent cash flows (b) Investing Activities section (c) Financing Activities section (d) Operating Activities section
C - Financing Activities section
Allowance for Doubtful Accounts on the balance sheet (a) Appears under the heading "Other Assets" (b) Is offset against total current assets (c) Is deducted from Accounts Receivable (d) Increases the cash realizable value of Accounts Receivable
C - Is deducted from Accounts Receivable
The number of shares of issued stock equals (a) Authorized shares minus Treasury shares (b) Unissued shares minus Outstanding shares (c) Outstanding shares plus Treasury shares (d) Outstanding shares plus Authorized shares
C - Outstanding shares plus Treasury shares
Which of the following items does NOT result in an entry to the Inventory account under a perpetual system? (a) A purchased of merchandise (b) A return of Inventory to the supplier (c) Payment of freight costs for goods shipped to a customer (d) Payment of freight costs for goods received from a supplier
C - Payment of freight costs for good shipper to a customer
In 2017, Costello Company performs work for a customer and bills the consumer $10,000; it also pays expenses of $3,000. The customer pays Costello in 2018. If Costello uses the accrual-basis of accounting, then Costello will report (a) Revenue of $10,000 in 2018 (b) Expenses of $3,000 in 2018 (c) Revenues of $10,000 in 2017 (d) Net Income of $7,000 in 2018
C - Revenues of $10,000 in 2017
Which one of the following will result in gross profit? (a) Operating Expenses less Net Income (b) sales Revenue less Operating Expense (c) Sales Revenue less Cost of Goods Sold (d) Operating Expenses less Cost of Goods Sold
C - Sales Revenue less Cost of Goods Sold
Which of the following is NOT an element of the fraud triangle? (a) Rationalization (b) Financial Pressure (c) Segregation of Duties (d) Opportunity
C - Segregation of Duties
The classification and normal balance of the Dividends account is: (a) Revenue with a credit balance (b) An expense with a credit balance (c) Stockholders' Equity with a debit balance (d) A liability with a credit balance
C - Stockholders' Equity with a debit balance
A change in the estimated useful like of equipment requires (a) A retroactive change in the amount of periodic depreciation recognition I previous years (b) That Income for the current year be increased (c) That the amount of periodic depreciation be changed in the current year and in the future (d) That no change be made in the periodic depreciation amounts are comparable over the life of the asset
C - That the amount of periodic deprecation be changed in the current year and win the future
In which of the following sequences are the financial statements usually prepared? (a) Income Statement, Balance Sheet, Retained Earnings Statement, and Statement of Cash Flows (b) Balance Sheet, Retained Earnings Statement, Statement of Cash Flows, and Income Statement (c) Balance Sheet, Statement of Cash Flows, Income Statement, and Retained Earnings Statement (d) Income Statement, Retained Earnings Statement, Balance Sheet, and Statement of Cash Flows
D
Receivables are (a) Shown on the Income Statement at cash realizable value (b) One of the most liquid assets and thus are always considered current assets (c) Always the result of revenue recognition (d) Claims that are expected to be collected in cash
D - Claims that are expected to be collected in cash
Assume that Sales Revenue are $450,000, Sales Discounts are $10,000, Net Income is $35,000, and Cost of Goods Sold is $320,000. How much are gross profit and operating expenses, respectively? (a) $130,000 and $95,000 (b) $120,000 and $95,000 (c) $130,000 and $85,000 (d) $120,000 and $85,000
D - $120,000 and $85,000
Pharaoh Company reported Net Income of $127,800 for the year 2022, Accounts Receivable increased by $8,520, Accounts Payable decreased by $5,680 and Depreciation Expense of $14,200 was recorded. Net cash provided by Operating Activities for 2022 is (a) $142,000 (b) $116,440 (c) $113,600 (d) $127,800
D - $127,800
In the first month of operations, the total of the debit entries to the Cash account amounted to $7,980 and the total of the credit entries to the Cash account amounted to $4,560. At the end of the month, the Cash has a (a) $4,560 credit balance (b) $3,420 credit balance (c) $7,980 debit balance (d) $3,420 debit balance
D - $3,420 debit balance (sub. $7,980 from $4,560)
The financial statements for Harold Corporation contained the following information: (a) Accounts Receivable - $5,000 (b) Sales Revenue - $75,000 (c) Cash - $15,000 (d) Salaries and Wages Expense - $20,000 (e) Rent Expense - $10,000 How much was Harold's net income?
D - $45,000 (sub. $75,000 from $20,000 and $10,000)
Sales Revenue total to $10,000. Sales Returns and Allowances are $500 and Sales Discounts are $1,000. How much is Net Sales? (a) $11,500 (b) $10,500 (c) $10,000 (d) $8,500
D - $8,500 (sub. $10,000 from $500 and $1,000)
Jax Company uses a perpetual inventory system and on November 30 purchased merchandise for which it must pay the shipping charges. Which of the following is one part of the required journal entry when Jax pays the shipping charges of $200? (a) A debit to Delivery Expenses for $200 (b) A debit to Cash for $200 (c) A debit to Freight-out for $200 (d) A debit to Inventory for $200
D - A debit to Inventory for $200
Which of the following is a reason why an organization established a system for internal control? (a) To safeguard its assets (b) To increase efficiency of operations (c) To ensure compliance with laws and regulations (d) All of these answer choices are correct
D - All of these anger choices are correct
At the end of 2021, Skysong Co. has Accounts Receivable pf $665,400 and an Allowance for Doubtful Accounts of $23,480. On January 24, 2022, it is learned that the company's receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,415. What account is debited to write off Madonna's account? (a) Accounts Receivable (b) Cash (c) Bad Debt Expense (d) Allowance for Doubtful Accounts
D - Allowance for Doubtful Accounts
If the market rate of interest is greater than the contractual rate of interest, bonds will sell (a) At face value (b) At a premium (c) Only after the stated rate of interest is increased (d) At a discount
D - At a discount