Crawford Fin Acct Final

cost principle

According to the ________, acquired assets should be recorded at the amount actually paid rather than at the estimated market value.

Cash increases and Accounts Receivable decreases

Fitch Supply Services received $1,000 cash from a customer; the amount was owed to the business from the previous month. What is the effect of this transaction on the accounting equation? A. Cash increases and Accounts Payable decreases B.Cash increases and Accounts Receivable decreases C.Accounts Receivable increases and Service Revenue increases D.Cash increases and Service Revenue increases

generally accepted accounting principles

GAAP refer to guidelines for accounting information in the United States. The acronym GAAP in this statement refers to________.

net sales revenue less cost of goods sold

Gross profit is calculated as ________. A. sales revenue less sales discounts and allowances B. net sales revenue less cost of goods sold C.sales revenue less operating expenses D.net sales revenue less sales discounts

cost of goods sold

Gross profit is calculated as the difference between net sales revenue and ________. A.selling and administrative expenses B.cost of merchandise inventory C.cost of goods sold D.purchases

perpetual and periodic

Merchandise inventory accounting systems can be broadly categorized into two types. They are ________. A.wholesale and retail B.FIFO and LIFO C.perpetual and periodic D.manufacturer and producer

It includes cash inflows and outflows involved in long term liabilities and equity.

Which of the following describes the financing activities section of the statement of cash flows?A.It reports on activities that create revenue or expenses for the entity's business. B.It includes interest and dividend income and cash payments for interest expense. C.It includes cash inflows and outflows involved in long term liabilities and equity. D.It includes increases and decreases in long term assets.

revenues, expenses, and dividends

Which of the following categories of accounts are temporary accounts that are closed at the end of the year? A.revenues, expenses, and dividends B.assets, liabilities, and dividends C.assets, liabilities, and stockholders' equity D.revenues, expenses, and stockholders' equity

the double declining balance method

Which of the following depreciation methods always allocates a higher amount of depreciation in earlier years than in later years? A.the straight line method B.the double declining balance method C.the first in,first out method D.the units of production method

The Sarbanes Oxley Act (SOX) ________.

requires companies to take responsibility for the accuracy and completeness of their financial reports

unearned revenue

A liability created when a business collects cash from customers in advance of providing services or delivering goods is called a(n) ________.

chart of accounts

A listing of all accounts in numerical order is called a(n) ________.

accounts receivable

A business renders services to a customer for $26,000 on account. Which of the following accounts is debited? A.Cash B.Service Revenue C.Accounts Payable D.Accounts Receivable

statement of cash flows

A business's cash receipts and cash payments for a specific period are reported on a(n) ________. A.cash reconciliation statement B.income statement C.balance sheet D.statement of cash flows

Cost of Goods Sold 400; Merchandise Inventory 400

A company that uses the perpetual inventory system sold goods for $3500 to a customer on account. The company had purchased the inventory for $400. Which of the following journal entries correctly records the cost of goods sold? A.Accounts Receivable 400; Sales Revenue 400 B.Cost of Goods Sold 400; Merchandise Inventory 400 C.Merchandise Inventory 400; Cost of Goods Sold 400 D.Cost of Goods Sold 400; Sales Revenue 400

Cash 4,200 Sales Revenue 4,200 Cost of Goods Sold 700 Merchandise Inventory 700

A company that uses the perpetual inventory system sold goods to a customer for cash for $4200. The cost of the goods sold was $700. Which of the following journal entries correctly records this transaction? A.Accounts Receivable 4,200 Cash 4,200 Cost of Goods Sold 700 Merchandise Inventory 700 B.Cash 4,200 Sales Revenue 4,200 Cost of Goods Sold 700 Merchandise Inventory 700 C.Merchandise Inventory 4,200 Sales Revenue 4,200 D.Cost of Goods Sold 4,200 Sales Revenue 4,200

liability

A debt that a business owes is called ________.

a transaction or any event that affects the financial position of the business and can be measured with faithful representation

Accountants record ________.

3600

Accounts Receivable has a balance of $4,000, and the Allowance for Bad Debts has a credit balance of $400. The allowance method is used. What is the net realizable value of Accounts Receivable after a $160 account receivable is written off? (4000-160) - (400 - 160) (accounts receivable - smaller accounts A.$3,600 B.$3,760 C.$3,440 D.$4,000

the business has earned, but not yet collected in cash (C)

Accrued revenue is revenue that ________. A.the business has collected in cash, but not yet earned B.will be collected and earned in the future C.the business has earned, but not yet collected in cash D.has been collected and earned

contra asset; credit

Accumulated Depreciation is a(n) ________ account and carries a normal ________ balance.

accounts payable

Amounts owed for products or services purchased on account are called ________. A.warranty payable B.accrued expense C.unearned revenue D.accounts payable

permanent account

An account that is not closed at the end of the period is called a(n) ________.

Service Revenue and Utilities Expense

An income statement includes ________. A.Furniture and Cash B.Common Stock, Retained Earnings, and Dividends C.Service Revenue and Utilities Expense D.Land and Salaries Payable

67.31%

Coleman, Inc. provides the following data from its income statement for 2017: Net Sales$520,000 Cost of Goods Sold ($170,000) Gross Profit$350,000 Calculate the gross profit percentage. (Round your answer to two decimal places.) (gross profit/net sales revenue) A.20.59% B.32.69% C.67.31% D.100.00%

when services are performed, even though cash may be received at a later date (B)

If a company is using accrual basis accounting, when should it record revenue? A.when cash is received, even though services may be performed at a later date B.when services are performed, even though cash may be received at a later date C.when services are performed or cash is received D.when cash is received, 30 days after the completion of the services

long term liabilities

Notes Payable due within two years are classified as ________.

Accounts Receivable 8,000, Sales Revenue 8,000

Owens Jewelers uses the perpetual inventory system. On April 2, Owens sold merchandise with a cost of $1500 for $8000 to a customer on account with terms of /15,n/30. Which of the following journal entries correctly records the sales revenue? A.Sales Revenue 8,000, Cost of Goods Sold 8,000 B. Accounts Receivable 1,500, Sales Revenue 1,500 C.Accounts Receivable 8,000, Sales Revenue 8,000 D.Sales Revenue 8,000, Accounts Receivable

is used most effectively to measure a company against other companies in the same industry and to denote trends within the company

Ratio analysis ________. A.provides a year to year comparison of a company's performance in different periods B.provides a way to compare different companies C.is used most effectively to measure a company against other companies in the same industry and to denote trends within the company D.cannot be used to measure a company against other companies in the same industry because the necessary information is not available

$11,200

The Allowance for Bad Debts account has a credit balance of $3,000 before the adjusting entry for bad debts expense.The company's management estimates that 4% of net credit sales will be uncollectible for the year 2017. Net credit sales for the year amounted to $280,000. What is the amount of Bad Debts Expense reported on the income statement for 2017? (4% of 280,000) A.$11,200 B.$8,200 C.$5,600 D.$14,200

investing activities

The ________ section of the statement of cash flows includes increases and decreases in long term assets. A.non-cash operating activities B.operating activities C.financing activities D.investing activities

matching

The accounting principle that ensures all expenses are recorded during the period when they are incurred and offsets those expenses against the revenues of the period is called the ________ principle.

depreciation

The allocation of a plant asset's cost to expense over its useful life is called ________.

assets

The economic resources of a business such as furniture, building, and land are its ________.

accumulated depreciation account

The entry to record depreciation includes a credit to the ________. A.Depreciation Payable account B.Depreciation Expense account C.Cash account D.Accumulated Depreciation account

have no effect on net income

The entry to write off an account receivable under the allowance method will ________. A.reduce net income B.increase total assets C.increase net income D.have no effect on net income

190,000

The equity of Autumn Company is $160,000 and the total liabilities are $30,000. The total assets are ________. (equity + liabilities = assets)

residual value

The expected cash value of an asset at the end of its useful life is known as ________. A.carrying value B.book value C.residual value D.market value

financial accounting

The field of accounting that focuses on providing information for external decision makers is ________.

1.02

The financial statements for Lexington Service Company include the following items: 2017 2016 Cash $50,500 $43,000 Short term Investments 28,000 11,000 Net Accounts Receivable 56,000 50,000 Merchandise Inventory 157,000 43,000 Total Assets 531,000 546,000 Accounts Payable 127,500 124,000 Salaries Payable 23,000 20,000 Long-term Note Payable 64,000 56,000 Compute the current ratio for 2016. (Round answer to two decimal places.) (current assets/current liabilities) (147000/144000) A.0.98 B.1.02 C.5.69 D.3.79

.80

The financial statements for Myers Service Company include the following items: 2017 2016 Cash $51,500 $49,000 Short-term Investments 27,000 13,500 Net Accounts Receivable 55,000 52,000 Merchandise Inventory 131,000 47,000 Total Assets 528,000 553,000 Accounts Payable 129,500 124,000 Salaries Payable 23,000 19,000 Long-term Note Payable 60,000 60,000 Compute the acid test ratio for 2016. (Round your answer to two decimal places) (cash+short term investments+ net accounts receivable/accts payable+salaries payable) A.0.88 B.0.71 C.0.92 D.0.80

.40

The financial statements of Clearwater Furniture Company include the following items: 2017 2016 Cash $62,500 $57,000 Short-term Investments 29,000 14,000 Net Accounts Receivable 93,000 98,000 Merchandise Inventory 165,000 148,000 Total Assets 532,000 544,000 Total Current Liabilities 227,000 218,000 Long-term Note Payable 63,000 59,000 What is 2017 cash ratio? (Round your answer to two decimal places) (cash+short-term investments/total current liabilities) A.0.22 B.0.28 C.0.12 D.0.40

$17,000

The following information is from the records of Armadillo Camera Shop: Accounts receivable, December 31, 2017 (debit)$81,000 Net credit sales for 2017 - $160,000 Accounts written off as uncollectible during 2017 - $17,000 Cash sales during 2017 - $43,000 The company uses the direct writeoff method for bad debts. What is the amount of bad debts expense? A.$62,000 B.$17,000 C.$43,000 D.$81,000

the aging of accounts receivable method and the percent of sales method

Two methods of estimating uncollectible receivables are ________. A.the direct writeoff method and the percent of completion method B.the allowance method and the amortization method C.the gross-up method and the direct writeoff method D.the aging of accounts receivable method and the percent of sales method

at fair market value

Under U.S. GAAP, which of the following is not an acceptable way to report plant assets? A.at fair market value B.as a single amount, with a note to the financial statements that provides detailed information C.at book value D.with detailed information on the face of the balance sheet

current assets

Under which of the following categories would Accounts Receivable appear? A.Current assets B.Long term liabilities C.Long term assets D.Current liabilities

a discount of 2 percent will be allowed if the invoice is paid within 10 days of the invoice date.

What does "2/10" mean, with respect to "credit terms of 2/10, n/30"? A.A discount of 10 percent will be allowed if the invoice is paid within two days of the invoice date. B.Interest of 2 percent will be charged if the invoice is paid after 10 days from the date on the invoice. C.A discount of 2 percent will be allowed if the invoice is paid within 10 days of the invoice date. D.Interest of 10 percent will be charged if invoice is paid after two days.

Interest Payable is credited

When a business records accrued interest expense on a note payable ________. A.Cash is debited B.Interest Expense is credited C.Interest Payable is credited D.Note Payable is credited

credit to Accounts Receivable and a debit to Bad Debts Expense

When a company is using the direct writeoff method, and an account is written off, the journal entry consists of a________. A.debit to Accounts Receivable and a credit to Cash B.credit to Accounts Receivable and a debit to Bad Debts Expense C.credit to Accounts Receivable and a debit to Interest Expense D.debit to the Allowance for Bad Debts and a credit to Accounts Receivable

cash

Which of the following accounts decreases with a credit? A.Common Stock B.Accounts Payable C.Cash D.Notes Payable

It reports on activities that create revenue or expenses for the entity's business.

Which of the following describes the operating activities section of the statement of cash flows?A.It reports cash receipts and cash payments that increase or decrease long term assets. B.It includes cash inflows and outflows involved in long term liabilities and equity. C.It reports on how cash flows affect the total assets and total liabilities. D.It reports on activities that create revenue or expenses for the entity's business.

A company must identify its risks and take necessary steps to minimize them.

Which of the following describes the risk assessment component of internal control? A. Risk assessment is the "tone at the top" of the business. B. Risk assessment is designed to ensure that the business's goals are achieved. C. A company must identify its risks and take necessary steps to minimize them. D. Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate.

Current assets minus current liabilities

Which of the following describes working capital? A.Total debt minus stockholders' equity B.Current assets minus current liabilities C.Cost of goods sold divided by average merchandise inventory D.Current assets minus merchandise inventory

balance sheet

Which of the following financial statements lists the entity's assets, liabilities, and stockholders' equity as of a specific date? A.Statement of retained earnings B.Statement of cash flows C.Balance sheet D.Income statement

income statement

Which of the following financial statements reports expenses in decreasing order of their amounts, by stating the largest expense first? A.Income statement B.Statement of retained earnings C.Statement of cash flows D.Balance sheet

Cashiers must not have access to accounting records.

Which of the following illustrates the internal control procedure separation of duties?— A. Cashiers must not have access to accounting records. B. Electronic devices must be installed to reduce theft. C. The invoices and other documents must be prenumbered. D. External auditors will monitor internal controls.

first in, first out

Which of the following inventory costing methods uses the cost of the oldest purchases to calculate the cost of goods sold? A. last in, first out B.specific identification C.weighted average D.first in, first out

It creates a present obligation for future payment of cash or services.

Which of the following is a characteristic of a current liability? A.It occurs because of a future transaction or event. B.It cannot be settled with services. C.It is an avoidable obligation. D.It creates a present obligation for future payment of cash or services.

accounts payable

Which of the following is a liability account? A.Accounts Payable B.Prepaid Expense C.Service Revenue D.Salaries Expense

accounts receivable

Which of the following is an asset account? A.Unearned Revenue B.Wages Payable C.Accounts Receivable D.Notes Payable

The company should separate the custody of assets from accounting.

Which of the following is an attribute of the internal control procedure assignment of responsibilities? A. The external auditors will monitor internal controls. B. The company should separate the custody of assets from accounting. C. Each position has clearly assigned responsibilities. D. To validate their accounting records, a company should have an audit by an external accountant.

amounts paid to make the asset ready for its intended use

Which of the following is included in the cost of a plant asset? A.replacement of damaged parts of the asset B.wages of workers who work use the asset in normal operations C.regular repair and maintenance costs D.amounts paid to make the asset ready for its intended use

Straight line depreciation = (Cost - Residual value) / Useful life

Which of the following is the correct formula for calculating depreciation under the straight line method? A.Straight line depreciation = (Cost + Residual value)Useful life B.Straight line depreciation = (Cost + Residual value) / Useful life C.Straight line depreciation = (Cost - Residual value) / Useful life D.Straight line depreciation = (Cost - Residual value)Useful life

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

Which of the following is the correct order of preparation of financial statements? A.Statement of retained earnings balance sheet income statement statement of cashflows→→→ B.Balance sheet income statement statement of retained earnings statement of cashflows→→→ C.Income statement statement of retained earnings balance sheet statement of cashflows→→→ D.Balance sheet statement of retained earnings income statement statement of cashflows

Identify the accounts and the account type, decide whether each account increases or decreases, then apply the rules of debits and credits, record the transaction (B)

Which of the following is the order of steps to journalize an entry? A.Record the transaction Identify the accounts and the account type Decide whether each account increases or decreases, then apply the rules of debits and credits→→ B.Identify the accounts and the account type, decide whether each account increases or decreases, then apply the rules of debits and credits, record the transaction→→ C.Identify the accounts and the account type Record the transaction Decide whether each account increases or decreases, then apply the rules of debits and credits→→ D.Decide whether each account increases or decreases, then apply the rules of debits and credits Identify the accounts and the account type Record the transaction

ledger

Which of the following is the record holding all the accounts, the changes in those accounts, and their balances? A.Journal B.Source document C.Ledger D.Trial balance

One of the major purposes of internal control is to ensure that the assets are safeguarded.

Which of the following is true of internal control? A. One of the major purposes of internal control is to ensure that the assets are safeguarded. B. Internal control procedures tend to diminish the importance of operational efficiency. C. A company's outside auditor is responsible for the company's internal control system. D. Internal controls are only necessary for public companies.

It is shown as a contra account related to accounts receivable.

Which of the following is true of the balance sheet presentation of the Allowance for Bad Debts? A.It is shown as a contra account related to accounts receivable. B.It is reported as a current liability. C.It is reported as an operating expense. D.It is reported as a separate, independent line item under current assets.

a lockbox system

Which of the following is used by companies to separate cash duties and establish stronger control over cash receipts? A.an encryption system B.an imprest system C.a firewall system D.a lockbox system

Financial statements are documents that report on a business in monetary terms, providing information to help people make informed business decisions.

Which of the following statements best defines financial statements? A.Financial statements are the verbal statements made to business news organizations by chief financial officers. B.Financial statements are the information systems that record monetary and nonmonetary business transactions. C.Financial statements are plans and forecasts for future time periods based on information from past financial periods. D.Financial statements are documents that report on a business in monetary terms, providing information to help people make informed business decisions.

liabilities and revenues

Which one of the following account groups normally has a credit balance? A.assets and expenses B.equity and assets C.assets and liabilities D.liabilities and revenues

assets and expenses

Which one of the following account groups normally has a debit balance? A.liabilities and revenues B.revenues and expenses C.assets and liabilities D.assets and expenses

certified public accountants

________ are professional accountants who serve the general public, not one particular company.

accounts payable

________ represents a short term liability created by purchasing "on account."

assets = liabilities + equity

what is the basic accounting equation?