Financial Accounting Final

best describes the allowance for doubtful account?

contra account

what is the primary objective to financial reporting

to provide useful information for decision making

True or False: Dividends are an expense, and are reported on the income statement as a deduction from net income

true

what is an example of an accrued liability

wages have been earned by employees, but have not been paid at the end of the period

Nichols company accepted a check from Briggs company as payment for services rendered to Nichols company. Later Nichols's bank statement revealed that Brigg's check was an NSF check. Recognizing the NSF check on Nichols's book would act to do what to total assets

have no effect

Charles Street Consultants started business on January 1, 2005, and immediately purchased $1,000 of supplies to use in the business. At the endow the month, 25% of the supplies remains unpaid and 20% are still on hand. What amounts should appear on the financial statements for January 2005?

income statement 800 exp, statement of cash flows 750 outflow

which internal control process procedure is followed when the work of one department acts as a check on the work of another?

independent verifications

which one of the following types of inventory accounts would be used by a wholesaler or retailer?

merchandise inventory

what would not appear on a bank statement for a checking account?

outstanding checks

What is one of the six most important categories of internal control procedures?

proper authorizations

which internal control procedure is violated when the cashier at the checkout stand also records the daily receipts in the journal?

segregation of duties

The three forms of business entities are

sole proprietorships, partnerships, and corporations

Invests funds into a business and is considered an owner?

stockholder

Raspier Company purchased a truck at a cost of $12,000 in 1996. As of January 1, 2005, depreciation of $10,000 had been recorded on this asset. Depreciation expense for 2005 is $2,000. After the adjustments are recorded and posted at December 31, 2005, what is the carrying value of the truck?

0

on january 1, bijou corp purchased land with a 2 year old building on it for 120,000. at the time of purchase, the fair market values of the land and building were 60,000 and 140,000, respectively. calculate the amount of the gain from the purchase of land and building that should be recorded in bijou's financial statements

0

Marcos Inc. had net income for 2014 of $40,000. It declared and paid a $3,500 cash dividend in 2014. If the company's retained earnings for the end of the year was $38,200, what was the company's retained earnings balance at the beginning of 2014?

1,700

the data presented below for White House Corp. is for the year ended December 31, 2005 sales (100% on credit) 1,400,000 sales returns 30,000 accounts receivable 170,000 allowance for doubt accounts (before adjustments at december 31, 2005) 1,300 estimated amount of uncollectible account based on an aging analysis 14,000 if White House estimates its bad debts 1% of net credit sales, what amount will be reported as bad debt expenses for 2006? If white house corp estimates its bad debts at 1% of net credit sales, what will be the balance in allowance of doubtful accounts account after the adjustment for bed debts? if white house uses the aging of accounts receivable approach to estimate its bad debts, what amount will be reported as bad debt expense for 2006? if white house uses the aging of account receivable approach to estimate its bad debt, what will be the net realizable value of its accounts receivable after the adjustment for bed debt expenses?

13,700, 15,000, 12,700, 156,000

The accountant for Calvert Corp was preparing a bank reconciliation as of february 28, 2005. The following items were identified: Calvert's book balance 15,000 outstanding checks 2,500 service charge 15 customers NSF check returned by bank 100 what amount will Calvert report as its adjusted cash balance at february 28, 2005?

14,885

Cuisine Company received a 6-month, 6% note for $10,000 from its president on October 1, 2014. The note is due on March 31, 2015. If Cuisine's accounting period ends on December 31, how much interest revenue should Cuisine recognize during 2014 and 2015?

2014: 150 2015: 150

Bartlett Industries began operations on January 2, 2015, with an investment of $50,000 by each of its two stockholders. Net income for its first year of business was $240,00. Barnett Industries paid a total of $100,000 in dividends to its stockholders during the year. Read the information about Bartlett Industries. What is the company's retained earnings balance at December 31, 2015? Read the information about Bartlett Industries. If the company's revenues were $500,000 for the year ended in December 31, 2015, how much were total expenses? the companies dividends for the year are reported where?

140,000, 260,000, reported on the statement of retained earnings

Moss Company has provided the following information from its accounting records for the current year: Cash: $55,000 Inventory: 65,000 Accounts payable: 50,000 Retained Earnings: ? Accounts receivable: $45,000 Land: 75,000 Notes payable (due 2020): 150,000 Capital Stock: 20,000 Read the information for Moss Corporation. What are Moss' current assets? current liabilities?

165,000, 50,000

5. Sun City Corporation's end of the year balance sheet consisted of the following amounts: Cash: $25,000 Property, plant, and equipment: 70,000 Capital stock: 100,000 Retained Earnings: ? Accounts receivable: $70,000 Long term debt: 40,000 Accounts payable: 20,000 Inventory: 35,000 What amount should Sun City report on its balance sheet for total assets?

200,000

Kellogg corp is a merchandising company that uses the periodic inventory system. Selected account balances are listed below: sales 500,000 purchases 225,000 inventory (beg) 16,000 inventory (end) 30,000 operating expenses 148,000 income tax expense 10,000 retained earnings (beg) 53,000 dividends 15,000 calculate the cost of goods sold for kellogg corp calculate the gross margin assume that kellogg's gross margin is 300,000. calculate net income

211,000, 289,000, 142,000

Cerrito Company has assets of $350,000, liabilities of $130,000, and retained earnings of $180,000. How much is total owners' equity?

220,000

Use the data below, which Telpen Corp identified in preparing a bank reconciliation on October 31, 2005, to answer the questions that follow: Bank statement balance 30,700 telpen's book balance (before adjustments) ? outstanding checks 4,200 NSF checks 400 Service charges 300 Deposits in transit 3,100 Interest earned on checking account 100 Refer to Telpen corp. What is the adjusted cash balance on October 31, 2005? Refer to Telpen corp, What is Telpen's book balance (before adjustments)? Refer to Telpen corp. What is the net amount of the increase or decrease in Telpen's cash balance that must be recorded as a result of the adjustments identified by the bank reconciliation? (state increase or decrease)

29,600, 30,200, 600 decrease

solar systems, in purchased a telescope on january 1, 2004 at a cost of 15,000. the telescope has an estimated useful life of 5 years and an estimated residual value of 3,000. the company uses straight line depreciation. on january 1, 2005 the company revised the estimate of the telescope's useful life and determines that only 3 years remained. how much depreciation expense will be recorded on the december 31, 2005 income statement?

3,200

30. The following transactions occurred during March, the first month of operations for Canyon Products, Inc. 1. Issued 50,000 shares of capital stock in exchange for $600,000 cash. 2. Purchased land for $400,000, using a $150,000 cash down payment and signing a note payable for the balance 3. Made a $60,000 cash payment on the note payable from the purchase of land. 4. Purchased equipment on credit from Burton, Inc. for $63,000. What is the balance in the Cash account at the end of March?

390,000

Sawaddee Enterprises began the year with total assets of $450,000 and total liabilities of $230,000. If Sawaddee total liabilities increased by $31,000 and its owners' equity decreased by $53,000 during the year, what was the amount of its total assets at the end of the year?

428,000

16. Deal Mart The 2014 income statement of Deal Mart shows operating revenues of $130,800, selling expenses of $37,100, general and administrative expenses of $34,900, interest expense of $900, and income tax expense of $11,430. Deal Mart's stockholders' equity was $280,000 at the beginning o the year and $320,000 at the end of the year. The company has $20,000 shares of stock outstanding at December 31, 2014. Read the information about Deal Mart. What is Deal Mart's net income? profit margin?

46,470, 35.5

beginning accounts receivable were 11,000 and ending account receivable were 13,000. All sales were on credit and totaled 559,000. How much cash was collected from customers?

557,000

higgins hat company uses a perpetual inventory system. the beginning balance in its inventory account is 1,500 and the ending balance is 1,000. cost of goods sold is 6,500. what was the amount of inventory purchased during the year?

6,000

On January 1, 2005, the accounts receivable balance was 7,000 and the balance in the allowance for doubtful accounts was 700. On January 15, 2005, a 200 uncollectible account was written off. The net realizable value of accounts receivable immediately after the write-off is:

6,300

signet company purchased a dump truck at the beginning of 2003 at a cost of 65,000. the truck has an estimated life of 5 years and an estimated residual value of 15,000. on january 1, 2005, the company made major repairs of 12,000 to the truck that extended its useful life 2 years. starting with 2005, the truck has a remaining life of 5 years. residual value remains 15,000. the company uses the straight-line depreciation method how much depreciation expense on signet;s income statement for 2005? how much is the balance in the truck account as of december 31, 2005? when calculating depreciation for 2005, signet should a. add the cost of major repair to the book value at december 31, 2004 and then allocate the new account balance less salvage over the adjusted years of life b. report the effect of the change in life as an expense on the income statement in 2005 c. ignore the change in life and depreciate the cost of the major repairs over the remaining 3 years of its original useful life d. expense the cost of major repairs and continue to depreciate the original cost of 65,000 over the original useful life

8,400, 77,000, a

the accounts receivable balance after posting customer's net payments for 2005 for Mix Corp. is 100,000. The customers took advantage of sales discounts of $11,000 and returned 4,000 of merchandise on account. Management feels that approximately 2% of net accounts receivable will be uncollectible. The net realizable value of the accounts receivable is

98,000

what organization is primarily responsible for establishing GAAP

FASB

checks returned by a bank because customers did not have sufficient funds in their account are called

NSF checks

which one of the following items is not included in cash? a. a bank certificate of deposit for 1 year b. a savings account at a bank c. a checking account balance d. petty cash account e. all of the above are included in cash

a

the payment of employee salaries has what effect on accounting equation

assets decrease and stockholders' equity decreases

what effect does the purchase of office equipment on credit have on the accounting equation

assets increase and liabilities

what effect does provided services to customers for immediate payment have on the accounting equation?

assets increase and owners' equity increases

Carl and Stefanie each invest $15,000 in a business and are given shares of stock in Thibeau Industries as evidence of their ownership interests. For this transaction, identify the effects on the accounting equation.

assets increase and stockholders' equity increases

is a company uses the allowance method to account for bad debts, when will the company's owners' equity decrease?

at the end of the accounting period (when an adjusting entry for bad debts is recorded)q

checks presented for payment and paid by the bank are known as

cancelled checks

An organization that lends funds to a business entity and expects repayment of the funds?

creditor

one significant difference between a classified and a non-classified balance sheet is the distinction between which of the following items?

current and non-current items

what is the correct method for calculating working capital

current assets minus current liabilities

the holmes company purchased a building for 75,000 in cash. what is the effect on current assets

decrease in current assets

what would be added to the balance per bank statement in a bank reconciliation

deposit in transit

Chase Corp. purchased equipment at a cost of $260,000 in January 1999. As of January 1, 2005, depreciation of $88,000 had been recorded on this asset. Depreciation expense for 2005 is $22,000. After adjustments are recorded and posted at December 31, 2005, what are the balances for the Depreciation Expense and Accumulated Depreciation?

depreciation expense: 22,000 accumulated depreciation 110,000

assets classified as property, plant, and equipment are reported at

each asset's original cost less depreciation since acquisition

what is the current ratio most useful for

evaluating company liquidity

A file or book which contains a record for all accounts used by a company, including the account balance, is called a:

general ledger

what is concurrent asset

land