ACC 211 Comprehensive Final

Rasner Co. returned defected goods costing $5,000 to Markum Company on April 19, for credit. The goods were purchased April 10, on credit, terms 3/10, n/30. The entry by Rasner Co. on April 19, in receiving full credit is:

Accounts Payable---------5,000 Merchandise Inventory----------------5,000

Admire County Bank agrees to lend Givens Brick Company $300,000 on January 1. Givens Brick Company signs a $300,000, 8%, 9-month note. What entry will Givens Brick Company make to pay off the note and interest at maturity assuming that interest has been accrued to September 30?

Notes Payable-----300,000 Interest Payable-----18,000 Cash--------------------------------318,000

True or False: Accumulated depreciation is a contra-asset account

True

Which of the following are in accordance with generally accepted accounting principles (GAAP)? a. accrual basis accounting b. cash basis accounting c. both accrual basis and cash basis accounting d. neither accrual basis nor cash basis accounting

a. accrual basis accounting

Under which inventory system are cost of goods sold and inventory balance determined only at the end of the accounting period? a. periodic b. perpetual c. both the periodic and perpetual d. neither the periodic nor perpetual

a. periodic

If goods in transit are shipped FOB destination, who has title until delivery is complete? a. the seller b. the buyer c. the shipping company d. no entity should count it

a. the seller

Closing entries are necessary for a. permanent accounts only b. temporary accounts only c. both permanent and temporary accounts d. permanent or real accounts only

b. temporary accounts only

At the year end inventory count, if goods in transit are shipped FOB shipping point, they should be included in the inventory count of a. the seller b. the buyer c. UPS d. no entity, because the goods could be anywhere

b. the buyer

The revenue recognition principle dictates that revenue should be recognized in the account records a. when cash is received b. when it is earned c. at the end of the month d. in the period that income taxes are paid

b. when it is earned

A company purchased inventory as follows: 200 units at $10 300 units at $12 The average unit cost for inventory is a. $10.00 b. $11.00 c. $11.20 d. $12.00

c. $11.20

On January 1, 2011, Masters and Masters Company purchased equipment for $30,000. The company is depreciating the equipment at the rate of $700 per month. The book value of the equipment at December 31, 2011 is a. $0 b. $8,400 c. $21,600 d. $30,000

c. $21,600

A company purchased land for $70,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start. Under the cost principle, the cost of land would be recorded at a. $77,000 b. $70,000 c. $82,000 d. $75,000

c. $82,000

Which method would likely be used to cost milk and other dairy products? a. specific identification b. average cost c. FIFO d. LIFO

c. FIFO

If Income Summary has a credit balance after revenues and expenses have been closed into it, the closing entry for Income Summary will include a a. debit to Retained Earnings b. debit to Dividends c. credit to Retained Earnings d. credit to Dividends

c. credit to Retained Earnings

Sales revenue less cost of goods sold is called a. net income b. net profit c. gross profit d. marginal income

c. gross profit

Which inventory costing method assigns the cost of the most recent items purchased to the ending inventory balance? a. specific identification b. weighted average cost c. LIFO d. FIFO

d. FIFO

A worksheet is a multiple column form that helps an accountant with the a. identification of events b. measurement process c. preparation of financial statements d. analysis process

c. preparation of financial statements

Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $300,000 and credit sales are $1,200,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense?

Bad Debts Expense--------------------12,000 Allowance for Doubtful Accounts------------------12,000

On July 9, Neal Company sells goods on credit to Al Dolan for $4,000, terms 1/10, n/60. Neal receives payment on July 18. The entry by Neal on July 18 is:

Cash---------------------3,960 Sales Discounts------------40 Accounts Receivable----------------4,000

Admire County Bank agrees to lend Givens Brick Company $300,000 on January 1. Givens Brick Company signs a $300,000, 8%, 9-month note. The entry made by Givens Brick Company on January 1 to record the proceeds and issuance of the note is:

Cash--------------300,000 Notes Payable-------------------300,000

On August 13, 2015, Swell Maps Enterprise purchased equipment for $1,300 and supplies of $200 on account. Which of the following journal entries is recorded correctly and in the standard format?

Equipment---------1,300 Supplies-------------200 Accounts Payable------------1,500

What is the normal balance of assets? a. debit b. credit

a. debit

At September 1, 2015, Promise Rind Co. reported stockholders' equity of $156,000. During the month, Promise Ring generated revenues of $38,000, incurred expenses of $21,000, purchased equipment for $5,000 and paid dividends of $2,000. What is the amount of stockholders' equity at September 30, 2015? a. $166,000 b. $171,000 c. $173,000 d. $176,000

b. $171,000

A company purchased factory equipment on April 1, 2011 for $80,000. It is estimated that the equipment will have a $10,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2011 is a. $8,000 b. $5,250 c. $7,000 d. $6,000

b. $5,250

Expenses incurred but not yet paid of recorded are called a. prepaid expenses b. accrued expenses c. interim expenses d. unearned expenses

b. accrued expenses

The usual sequence of steps in the transaction recording process is: a. journal -> analyze -> ledger b. analyze -> journal -> ledger c. journal -> ledger -> analyze d. ledger -> journal -> analyze

b. analyze -> journal -> ledger

The final closing entry to be journalized is typically the entry that closes the a. revenue accounts b. dividends account c. retained earnings account d. expense accounts

b. dividends account

A flower shop makes a large sale for $1,000 on November 30. The customer is sent a statement on December 5 and a check is received on December 10. The flower shop follows GAAP and applies the revenue recognition principle. When is the $1,000 considered to be earned? a. December 5 b. December 10 c. November 30 d. December 1

c. November 30

Replenishing the petty cash fund requires a. a debit to cash b. a credit to Petty Cash c. a debit to various expense accounts d. no accounting entry

c. a debit to various expense accounts

An adjusting entry a. affects two balance sheet accounts b. affects two income statement accounts c. affects a balance sheet account and an income statement account d. is always a compound entry

c. affects a balance sheet account and an income statement account

Depreciation is the process of a. valuing an asset at its fair market value b. increasing the value of an asset over its useful life in a rational and systemic manner c. allocating the cost of an asset to expense over its useful life in a rational and systemic manner d. writing down an asset to its real value each accounting period

c. allocating the cost of an asset to expense over its useful life in a rational and systemic manner

The accounting process is correctly sequenced as a. identification, communication, recording b. recording, communication, identification c. identification, recording, communication d. communication, recording, identification

c. identification, recording, communication

The left side of an account is a. blank b. a description of the account c. the debit side d. the balance of the account

c. the debit side

Birk Company sells merchandise on account for $3,000 to Kiner Company with credit terms of 2/10, n/30. Kiner Company returns $600 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check? a. $2,940 b. $2,952 c. $2,400 d. $2,352

d. $2,352

Which of the following would NOT be considered an internal user of accounting data for the GHI Company? a. President of the company b. Production manager c. Merchandise inventory clerk d. President of the employees' labor union

d. President of the employees' labor union

When the allowance method of accounting for uncollectible accounts is used, Bad Debts Expense is recorded a. in the year after the credit sale is made b. when an account is written off as uncollectible c. as each credit sale is made d. in the same year as the credit sale

d. in the same year as the credit sale

The economic entity assumption requires that the activities a. of different entities can be combined if all the entities are corporations b. must be reported to the Securities and Exchange Commission c. of a sole proprietorship cannot be distinguished from the personal economic events of its owners d. of an entity be kept separate from the activities of its owner

d. of an entity must be kept separate from the activities of its owner

Bee-In-The-Bonnet Company purchased office supplies costing $8,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $3,200 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be

debit Office Supplies Expense $4,800 credit Office Supplies $4,800

The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000, which represents three months' rent on December 1. The adjusting entry required on December 31 is to

debit Rent Expense $4,000 credit Prepaid Rent $4,000