Final Self Study Questions
Which of the following is true?
A credit will increase revenue account
On the first day of the current year, Griffin company sold equipment for less than its book value. Which of the following is part of the journal entry to record the sale.
A debit to loss on sale of plant assets
Posting refers to the process of transferring information from
A journal to the general ledger accounts
The return on sales ratio does not provide insight on which of the following
A measure of a company's cash flow flexibility
A merchandising company's multi step income statement differs from that of a service company in what way
A service company does not include a line for cost of goods
And adjusting entry to record utilities, used during a month for which know Bill has yet been received is an example of
Accruing expenses
Which of the following is an example of an adjusting entry
Recording depreciation expense on a truck
Which of the following accounts is increased by credit
Sales revenue
What is a bank reconciliation?
Scheduled that accounts for differences between a firms cash balance, as shown on his bank statement and the balance shown in the ledger cash account
For the balance sheet to be in balance, the following must exist:
Total assets must equal total liabilities plus stockholders equity
Which of the following is not shown on the statement of stockholders equity?
Total liabilities
ASSETS MUST ALWAYS EQUAL THESUM OF LIABILITIES PLUSSTOCKHOLDERS' EQUITY.
True
If merchandise is shipped F.O.B. destination, the seller ultimately bears the expense of transporting it.
True
THE COST OF REPAIRING A NEW DESK'S LEG--BROKEN ACCIDENTALLY BY AN EMPLOYEE MOVING THE DESK INTO PLACE--IS EXPENSED IMMEDIATELY.
True
for which area of accounting are generally accepted accounting principles primarily relevant?
financial accounting
what are increases in resources that a firm earns by providing goods or services to its customers?
revenues
Which of the following is true?
The debit is on the left side of an asset account
The balance in Allowance for Doubtful Accounts represents the amount a company thinks it will not collect from a customer.
True
In preparing its adjusting entries at the end of this year, CMC Company neglected to accrue employees' wages earned but not yet paid. This error:
Understates this year's expenses, overstates net income, and understates liabilities.
An operational audit is
Used to assess the quality and efficiency of operational performance
If assets total $140,000 and liabilities total $50,000, how much are net assets?
90,000
In a bank reconciliation, outstanding checks are
Deducted from the bank balance
which form of business organization is characterized by liability
corporation
which of the following items is not required to be included as part of a company's annual report?
detailed history of the company
Which of the following is not a common internal control concept
Collusion among employees
Which of the following statements is false?
Expenditures for ordinary repairs are a capital expenditure
The treasurer is responsible for each of the following, except:
Prepare the bank reconciliation
if bing company reports its year-end total liabilities to be $40,000 and its year-end stockholders' equity to be $60,000, how much are bing company's year-end total assets?
100,000
A journal entry that contains more than just two accounts is called
A compound journal entry
In reconciling the September bank statement, the vice president discovered that the bookkeeper had recorded a check written for $438 as $483 in the cash disbursements journal. For the bank reconciliation, the $45 error should be:
Added to balance per general ledger
Which of the following accounts has a normal debit balance?
Advertising expense
The general ledger includes accounts for all, but which of the following
All are in the general ledger
In applying the rules of debits and credits, which of the following statements is correct
Asset, expense, and dividends are debited for increases
DEBITS TO WHICH ACCOUNTS RESULT IN AN INCREASED BALANCE?
Assets and expenses
IF A COMPANY PAID OFF $200,000 OF ITS ACCOUNTS PAYABLE, THE EFFECT OF THIS TRANSACTION AS REFLECTED IN THE ACCOUNTING EQUATION ARE:
Assets decrease and liabilities decrease
Which of these accounts has a normal debit balance
Assets, expenses, dividends
Which of the following transactions does not affect total assets, total liabilities, or total stockholders equity on the balance sheet
Collecting $4000 from customers on account
Which of the following is not a true statement
Benchmarking analysis involves comparing a companies ratios overtime
Which of the following statements is correct regarding the reporting of cash?
Cash is shown as the first asset on the balance sheet
Which of the following is not an example of a closing entry?
Close, unearned revenue to retained earnings
Which of the following statements regarding cash flows is true
Cost of goods available for sale is equal to beginning inventory plus cost of goods purchased
Bosa Company had the following account balances on December 31st. Which of the following would be a part of the closing entries booked? Sales revenue $150,000 Salaries expense$21,000 Supplies expense $5,000 Dividends $7,500
Credit retained earnings$150,000
Which of the following would not be considered a current asset?
Property, plant, and equipment
On September 1 the PV company excepted a $24,000, 60 day, 9%, promissory note in exchange for overdue accounts receivable balance for the same amount from the Wagner company. On November 30 the Wagner company dishonored the note what journal entry should be recorded on November 30.
Debit accounts receivable; credit interest income; credit notes receivable
Daniel company uses the periodic inventory system. When goods are purchased, Daniel will:
Debit the purchases account for purchases on account
RECORDING THE COLLECTION OF ACCOUNTSRECEIVABLE FROMCUSTOMERS INVOLVES
Debiting cash and crediting accounts receivable
Ratio analysis always involves which type of arithmetic operation
Division
On January 1 Bush company purchased a delivery truck for $10,000. The company estimates the truck will be driven 80,000 miles over its eight-year useful life. The estimated salvage value is $2000. The truck was driven 12,000 miles and its first year. Which method results in the largest depreciation expense for the first year
Double declining balance
Which of the following is not one of the five steps in the accounting cycle?
Eliminate
Which of the following is not one of the three elements of the fraud triangle?
Embezzlement
Good internal control requires that the person handling cash should also make any related journal entries so that responsibility for cash can be assigned to one person.
False
Under the matching principle, the cost of inventory should be reported as an expense in the income statement when it is purchased, even if it is purchased on credit and will not be paid until the next reporting period.
False
The chart of accounts is listing of:
General ledger, account, names, and numbers
Net sales less cost of goods sold equals:
Gross profit
A firm using the allowance method of recording credit losses wrote off the customers account in the amount of $500. Later the customer paid the account. The firm reinstated the account by means of a journal entry and then recorded the collection. What is the result of these procedures?
Has no effect on total assets
The purchase of $500 of supplies on account will
Increase both assets and liabilities by $500
If assets increased by $50 and liabilities decreased by $30, stockholders equity must
Increase by $80
Which of the following statements is true?
Intangible assets are amortized to expense on the income statement
Which of the following statements is true?
Plant assets are shown on the balance sheet net of the accumulated depreciation account
Which of the following will cause a trial balance to be out of balance
Posting only the debit part of a transaction
Which of the following are considered good internal control practice
Job rotation, and required vacations
What are the obligations or debts that a business must pay in cash or in goods and services at some future time because of past transactions or events called and how are they reported?
Liabilities on the balance sheet
Which of the following is not a current asset?
Machinery
Which of the following items will not be reported on a classified balance sheet
Net income
WHICH OF THE FOLLOWINGACCOUNTS NORMALLY HASA CREDIT BALANCE?
Notes Payable
Which of the following would most likely be classified as a long-term liability?
Notes payable
Which of the following is not an example of a natural resource?
Oil rig
Tobias company purchased inventory on account. This transaction will affect:
Only the balance sheet
Which of the following would be considered a tangible asset
Patent
WHICH OF THE FOLLOWING ACTIVITIESIS AN EXAMPLE OF AN OPERATING ACTIVITY?
Selling merchandise online
Accounting for the periodic amortization of intangible assets is similar to which depreciation method
Straight line
Which of the following statements is true?
The accounts receivable aging method estimates the bad debts expense indirectly
An exclusive right to operate or sell a specific brand of products in a given geographic area is called
The franchise
Which of the following statements about a petty cash fund is not true
The fund should have a balance large enough to support one replenishment per year
The acquisition cost of a plant asset is equal to the assets implied cash price, and:
The reasonable and necessary costs incurred to prepare the asset for its intended use
Britain company should utilize all except one of the following concepts related to placing control numbers on business documents. Which concept should Burton not use
Use the documents in strict numerical sequence
Which of the following is a temporary account?
Wages Expense
generally accepted accounting principles are:
a set of guidelines to aid in the financial reporting process
which of the following situations presents ethical challenges to accountants
all situations
which of the following is not one of these three types of business activities?
marketing
which of the following processes best defines accounting
measuring economic activities and communicating results to interested parties
which of the following transactions does not affect the balance sheet totals?
ordered a new machine that will be paid for upon its delivery in two months