acc 2303 practice final

(see problem for details) If Patterson uses weighted-average method, weighted-average cost per unit would be: $________________ Total ending inventory would be: $____________________.

$10.43 $36,505

World Sales reported the following information for 20X8: Beginning accounts receivable$ 97,500 Bad debt expense during 20X8 13,450 20X8 sales on account 755,200 20X8 collections on account 738,900 Write-off of uncollectible accounts 1,540 Determine World Sales ending balance in Accounts Receivable: $_______________________ (hint: draw a t-account)

97,500+755,200-738,900-1,540=112,260

On May 1, 20X3, Barnett Corp. had 100,000 shares of $10 par value common stock outstanding with a market value of $32 per share. On May 2, Barnett announced a 4 for 1 stock split. After the split, the Common Stock balance is: A. $1,000,000 B. $4,000,000 C. $250,000 D. $800,000 E. $3,200,000

A. $1,000,000

O'Brien Corporation purchased a computer costing $18,500. These additional costs were incurred: sales tax of $1,526; freight of $380; cost to set up and test the computer, $975. The cost of the computer for depreciation calculations is: A. $21,381 B. $18,500 C. $19,855 D.$19,475 E.Some other amount, $____________

A. $21,381

(see problem for details) The cash inflow (outflow) from investing activities was: A. $(9,000) B. $(6,000) C. $(4,000) D. $(15,000) E. $6,000

A. $(9,000)

Radd Company reported the following balances after adjusting entries for the month of January have been recorded and posted. All expense accounts had a zero balance at the start of January. Debit: Supplies $ 500 Supplies Expense 750 Wages Expense 3,600 Credit: Wages Payable $ 700 Assuming that the amount in the Supplies Expense account represents the adjustment made at January 31 for the supplies used in January and that $950 of supplies were purchased in January, the balance of Supplies at January 1 must have been: A. $300 B. $500 C. $200 D. $700

A. $300

A machine with a cost of $33,000 and residual value of $3,000 is estimated to have a useful life of five years or 15,000 operating hours. The machine was purchased on January 1, 20X4. Straight-line depreciation on the machine for 20X4 is A. $6,000 B. $6,600 C.$10,000 D.$11,000

A. $6,000

Cash $ 18,500 Accounts receivable 39,600 Accumulated depreciation 2,000 Prepaid expenses 2,500 Inventory 59,400 Equipment 74,300 Land 107,700 Accounts payable 12,500 Unearned service revenue 9,300 Interest payable 700 Note payable (30-day) 25,500 Bonds payable (5 year) 132,000 Common stock, $1 par 50,000 Retained earnings 70,000 The current ratio at the end of 20X3 is: A. 2.5 B. 2.24 C. 3.75 D. 6.25

A. 2.5

Days' sales in accounts receivable is calculated as: A. 365 days divided by (credit sales divided by average accounts receivable) B. Sales per day divided by average accounts receivable. C. Credit sales divided by average accounts receivable. D. Average accounts receivable divided by credit sales.

A. 365 days divided by (credit sales divided by average accounts receivable)

Watson's, Inc., has authorized 70,000 shares of $2 par common stock. In the two years since incorporation, Watson's has sold 40,000 shares to stockholders and has distributed 4,000 shares as a stock dividend. Watson's is now contemplating the purchase of 500 shares to hold as treasury stock in order to increase the market price of the stock. If Watson's does purchase the 500 shares as treasury stock, what will be the number of shares authorized, issued, and outstanding? A. 70,000, 44,000, 43,500 B.70,000, 44,000, 44,000 C.70,000, 43,500, 39,500 D.44,000, 43,500, 43,500

A. 70,000, 44,000, 43,500

Comparison of the balance sheet of Company X at the end of Year 2 with its balance sheet at the end of Year 1 showed that total assets decreased by $5,500 and owners' equity increased by $2,000. The change in liabilities during the year was: A. A decrease of $7,500 B. An increase of $3,500 C. An increase of $7,500 D. A decrease of $3,500

A. A decrease of $7,500

What effect does depreciation expense have on the Statement of Cash Flows (indirect method)? A. Add to net income in operating activities. B. Subtract from net income in operating activities. C. Cash inflow from investing activities. D. Cash outflow from investing activities. E. Would not appear on the statement of cash flows.

A. Add to net income in operating activities.

What is the type of account and normal balance of "Allowance for Uncollectible Accounts"? A. Contra asset, credit B. Asset, credit C. Contra asset, debit D. Asset, debit

A. Contra asset, credit

A note receivable due in 90 days would be listed on the balance sheet under the caption: A. Current assets B. Plant assets C. Current liabilities D. Long-term liabilities

A. Current assets

In a period of rising prices, which of the following statements is true? A. FIFO inventory method produces the highest gross profit. B. FIFO inventory method results in the highest cost of goods sold. C. The weighted-average inventory method reports the highest net income. D. The FIFO method achieves a better matching of revenues and expenses.

A. FIFO inventory method produces the highest gross profit.

Stewart Corporation sells exercise equipment carrying a one-year warranty. The warranty expense should be recognized A. In the accounting period when the exercise equipment is sold. B. At the end of the warranty period. C. In the period when the equipment is repaired. D. Evenly over the warranty period.

A. In the accounting period when the exercise equipment is sold.

A balance sheet shows: A. The assets, liabilities, and owners' equity of an enterprise on a specific date B. Amounts adjusted for changes in the purchasing power of money C. The revenues earned by a business, the expenses incurred in earning revenues, and the resulting net income or loss D. Revenues, expenses, assets, liabilities and owners' equity in terms of the historical monetary units exchanged at the time the transactions occurred

A. The assets, liabilities, and owners' equity of an enterprise on a specific date

An error caused the September 30, 20X2 ending inventory to be understated by $3,800. What effect will this error have on the September 30 assets, liabilities, owners' equity, and net income?A. Understate, no effect, understate, understate B. Understate, understate, understate, understate C. No effect, understate, no effect, no effect D. No effect, understate, overstate, overstate

A. Understate, no effect, understate, understate

If a bookkeeper recorded a cash sale with a debit to Cash and a credit to Accounts Receivable, the error would cause an: A. Understatement of net income B. Overstatement of net income C. Overstatement of assets D. Overstatement of net sales

A. Understatement of net income

Refer to the information given in Problem #63. Assuming that no balance existed in Wages Payable on January 1, the amount of wages paid during January must have been: A. $700 B. $2,900 C. $4,300 D. $3,600

B. $2,900

Advantages of incorporation include A. limited liability, ease of transferring ownership rights, and continuity of life B. limited liability, taxation of corporations, and smaller costs of incorporation C. ease of transferring ownership, continuity of life, and taxation of corporations D. continuity of life, taxation of corporations, and smaller costs of incorporation

A. limited liability, ease of transferring ownership rights, and continuity of life

On July 1, 20X7, Parker Co. issued $200,000, 8%, 10-year bonds at 87.5, when the market rate of interest was 10%. Interest is payable semiannually on the bonds, on 1/1 and 7/1. Parker uses the straight-line method of amortization. What does Parker Company report on their 20X7 income statement, as interest expense related to these bonds, and what is the interest income received by the bondholders for 20X7? Interest Expense, Interest received A.$9,250$ - 0 - B.$9,250 8,000 C.$10,000 8,000 D.$8,000 - 0 -

A.$9,250$ - 0 -

In August, Ace sold on account to credit customers, $8,000 of goods; the cost of these goods was $3,900. Customers paid $6,000 on account during the month of October. Record expense for merchandise sold in _____________________, for $______________________.

August $3,900

Record revenue earned in _____________________, for $______________________.

August, $8,000

(see problem for details) The cash payment for dividends was: A. $23,000 B. $26,000 C. $29,000 D. $24,000

B. $26,000

(see problem for details) If Patterson uses FIFO method, ending inventory would be A. $35,450 B. $37,580 C. $35,000 D. $37,625 E. None of the above

B. $37,580

On July 1, 20X7, Parker Co. issued $200,000, 8%, 10-year bonds at 87.5, when the market rate of interest was 10%. Interest is payable semiannually on the bonds, on 1/1 and 7/1. Parker uses the straight-line method of amortization. The adjusting entry on December 31, 20X7 would read: A. DR: Interest Expense 8,000 CR: Interest Payable 8,000 B. DR:Interest Expense 9,250 CR: Discount on Bonds Payable 1,250 , Interest Payable 8,000 C. DR: Interest Expense 9,250 CR: Discount on Bonds Payable 1 ,250 , Cash 8,000 D. DR: Interest Expense 11,250 CR: Discount on Bonds Payable 1,250 , Interest Payable 10,000

B. DR:Interest Expense 9,250 CR: Discount on Bonds Payable 1,250 , Interest Payable 8,000

What amount of interest revenue will Casey Company record on December 31 related to a 2-month, 6% note received from a customer for $30,000 and dated December 1? A. $1,800 B. $150 C. $300 D. $-0-

B. $150

On January 1 of the current year, Alpha Company paid $400 to cover four months (January-April) rent. Alpha Company recorded this transaction as follows: DR: Prepaid Rent 400 CR: Cash 400 Alpha Company prepares adjusting and closing entries at the end of each month. The month-end adjusting entries prepared by Alpha Company at the end of February should include A. A credit of $75 to Prepaid Rent B. A credit of $100 to Prepaid Rent C. A credit of $200 to Prepaid Rent D. A credit of $300 to Prepaid Rent

B. A credit of $100 to Prepaid Rent

If on January 1, 20X6, Mary Kay Company paid $100 of its accounts payable in cash, what would be the effects on the accounting equation? A. Assets, $100 increase; liabilities, no effect; owners' equity, $100 increase B. Assets, $100 decrease; liabilities, $100 decrease; owners' equity, no effect C. Assets, $100 decrease; liabilities, $100 decrease; owners' equity, $200 decrease D. Assets, no effect; liabilities, $100 decrease; owners' equity, $100 increase E. There is no effect on the accounting equation until the books are closed on December 31, 20X6

B. Assets, $100 decrease; liabilities, $100 decrease; owners' equity, no effect

Felton Appliance Store estimates warranties payable each period based on sales. What entry is required when a customer later returns a defective unit for a new unit? A. Debit Warranty Expense and credit Inventory B. Debit Warranty Payable and credit Inventory C. Debit Sales and credit Warranty Payable D. Debit Warranty Expense and credit Sales

B. Debit Warranty Payable and credit Inventory

Refer to Refer to Question #86. In the following month, the adjusting entry is made to reflect the amount of revenues earned from performing the service. What is the effect on the financial statements? Assets, Liab, S/E, Rev, Exp, N/I A. Increase, Decrease, No effect, No effect, No effect, No effect B. No effect, Decrease, Increase, Increase, No effect, Increase C. Decrease, Increase, Increase, No effect, No effect, Increase D. No effect, Decrease, No effect, Decrease, No effect, Decrease

B. No effect, Decrease, Increase, Increase, No effect, Increase

Quickness, Inc. had 10,000 shares of $80 par value common stock (originally issued for $90 per share) outstanding when the board of directors declared a 2 for 1 stock split. Which of the following events will occur? A. Total paid-in capital is reduced by one-half B. Par value per share is halved C. Retained Earnings is reduced D. Total par value is doubled

B. Par value per share is halved

Goodwill is an asset that is: A. Always recorded, whether developed internally or purchased B. Recorded only if purchased C. Recorded only if internally developed D. Never recorded

B. Recorded only if purchased

Sharpe Company recorded too much patent amortization expense for 20X8, resulting in an understatement of net income for the year. Ignoring income taxes, how will this error affectSharp's balance sheet at December 31, 20X8? A. Will understate total stockholders' equity but have no effect on total assets. B. Will understate both total assets and total stockholders' equity. C. Will overstate total stockholders' equity but have no effect on total assets. D. No effect because the error is limited to the income statement.

B. Will understate both total assets and total stockholders' equity.

When common stock is issued at a price greater than its par value, the excess A. is credited to Retained Earnings B. becomes part of paid-in capital C. does not become part of paid-in capital D. is reported in the balance sheet as a noncurrent asset E. represents gain or income on the sale of stock

B. becomes part of paid-in capital

On January 1, 20X9, Jancy Corporation had 10,000 shares of $10 par value stock issued and outstanding. All 10,000 shares had been issued in a prior period at $17 per share. On February 1, 20X9, Jancy purchased 1,000 shares of treasury stock for $19 per share and sold the treasury shares for $22 a share on March 2, 20X9. The journal entry to record the sale of the treasury shares on March 2, 20X9 would include a A. credit to Retained Earnings for $3,000. B. credit to Paid-In Capital from Treasury Stock Transactions for $3,000. C. credit to an income account for $3,000. D. debit to Retained Earnings for $2,000.

B. credit to Paid-In Capital from Treasury Stock Transactions for $3,000.

A 5% stock dividend was distributed to shareholders during 20X3. These will result in: A. an increase in total stockholders' equity B. no change in total stockholders' equity C. a decrease in assets D. an increase in retained earnings E. an increase in the number of shares issued and a decrease in the par value per share

B. no change in total stockholders' equity

Arnold Inc. reacquired 4,000 shares of $1 par common stock as treasury stock. What is the effect of the transaction on Total Paid-in Capital and Total Stockholders' Equity? A. increase, increase B. no effect, decrease C. decrease, decrease D. no effect, increase E. decrease, no effect

B. no effect, decrease

A bond issued at a discount indicates that: A. the interest paid will be greater than the interest expense over the life of the bond B. the interest expense will be greater than the interest paid over the life of the bonds C. the contract rate was more than the market rate of interest when the bonds were issued D. the interest expense will be the same as the cash paid because the discount will be amortized

B. the interest expense will be greater than the interest paid over the life of the bonds

If net income of Neon Company is $43,800 before these adjustments are made, what is their correct net income? Supplies used $750 Prepaid insurance used 40 Unearned revenue, earned 200 Income taxes accrued 33 A. $44,823 B. $44,423 C. $43,177 D. $43,243 E. $42,777

C. $43,177

The Omega Company's beginning inventory for 20X5 was $16,000. During 20X5, Omega made purchases of $10,360. If Omega's ending inventory was $15,000 for 20X5, what was cost of goods sold? A. $ 9,360 B. $10,360 C. $11,360 D. $13,160 E. $13,360

C. $11,360

The Kaysi Corporation purchased land to extract gold. The cost of the land on January 1, 20X7 was $110,000. The company estimates that the land can be resold for $10,000. If a total of 10,000 ounces of gold will be taken from the mine and 2,000 ounces are removed in 20X7, the depletion for 20X7 is: A. $ 5,000 B. $10,000 C. $20,000 D. $25,000

C. $20,000

A machine with a cost of $33,000 and residual value of $3,000 is estimated to have a useful life of five years or 15,000 operating hours. The machine was purchased on January 1, 20X4. If straight-line depreciation is used, the book value at the end of 20X5 is A. $18,000 B. $12,000 C. $21,000 D. $24,000

C. $21,000

Speaker Company made the following journal entry to record the issuance of common stock for $48 per share. What is the par value per share of the corporation's stock? DR: Cash 720,000 CR: Common Stock 450,000 , Pd. in Cap. In Excess-Com. Stk 270,000 A. no par B. $15 C. $30 D. $48

C. $30

The Budget Mart Department Store uses the gross profit method to estimate inventory. Historically, the company reports a 40% gross profit rate. Inventory, January 1, 20X4 : $60,000 Purchases : 150,000 Sales : 300,000 What should be the ending inventory at December 31, 20X4? A. $210,000 B. $90,000 C. $30,000 D. $126,000

C. $30,000

Cash balance per books: $34,888 Customer's check returned - NSF: 1,700 The Bank collected an EFT receipt of $14,990: 14,990 Deposits in transit on March: 319,132 Deposit in transit on February: 286,000 Outstanding checks on March: 313,500 Bank Service charge: 26 Check #457 written for $3,450 was erroneously recorded by Horton as $3,540. The check was in payment of an account payable. 28. The correct adjusted ending cash balance on March 31 is A. $33,252 B. $48,072 C. $48,242 D.$38,884 E.Cannot be determined from the information provided

C. $48,242

(see problem for details) The amount of cash generated from operations this year was: A. $30,000 B. $27,000 C. $64,000 D. $58,000

C. $64,000

At the beginning of the year, the normal balance in Accounts Receivable was $58,900. At the end of the year it had decreased to $55,600. If cash collected from customers during the year totaled $694,800, what must have been the amount of credit sales to customers? A. $3,300 B. $698,100 C. $691,500 D. Cannot be determined with the information given.

C. $691,500

On 9/1/X2, stockholders' equity of Solar Sales Company was $723,000. Revenue for September was $101,000, of which $92,000 was collected in cash. Expenses for September were $85,000, of which $84,000 were paid in cash. Dividends paid during September were $22,000. Stockholders' equity at 9/30/X2 was: A. $721,000 B. $733,000 C. $717,000 D. $739,000

C. $717,000

Baker Company had no office supplies on hand at the beginning 20X6. During 20X6, Baker Company purchased $250 worth of office supplies. On December 31, 20X6, $75 worth of office supplies remained. How much should Baker Company record as office supplies expense during 20X6? A. $250 B. $ 75 C. $175 D. $125

C. $75

Incidental Petroleum negotiated the purchase of a new piece of equipment. The list price on this equipment was $100,000. After hours of negotiation, Incidental was able to acquire the equipment for $80,000. Sales tax on the equipment was $4,000 and shipping costs of $1,000 were incurred by Incidental. Incidental earned a 1% cash discount by paying for the equipment within ten days. What amount should Incidental record as the cost of the equipment? A. $80,000 B. $84,150 C. $84,200 D. $104,000

C. $84,200

Cash $ 18,500 Accounts receivable 39,600 Accumulated depreciation 2,000 Prepaid expenses 2,500 Inventory 59,400 Equipment 74,300 Land 107,700 Accounts payable 12,500 Unearned service revenue 9,300 Interest payable 700 Note payable (30-day) 25,500 Bonds payable (5 year) 132,000 Common stock, $1 par 50,000 Retained earnings 70,000 The debt ratio at the end of 20X3 is: A. 17% (rounded) B. 40% C. 60% D. 42% (rounded)

C. 60%

Zebra Corporation purchased $1,000 of office supplies on account in October. The account payable was paid in November and the supplies were used in December. When should the office supplies be recorded as an expense? A. October B. November. C. December. D. Never. The supplies are an asset.

C. December

Which of the following would not increase the book value of a building? A. Addition of a new wing B. Major remodeling of a portion of the building to extend its useful life C. Painting of interior of the building as part of routine maintenance D. Addition of an elevator

C. Painting of interior of the building as part of routine maintenance

Which of the following is not true about a 10 percent stock dividend? A. Retained Earnings decreases B. Contributed Capital increases C. Par value decreases D. The market value of the stock is needed to record the stock dividend E. Total stockholders' equity remains the same

C. Par value decreases

When a corporation pays a previously-declared cash dividend: A. Total stockholders' equity decreases B. Retained earnings decreases C. Total assets decrease D. All of the above

C. Total assets decrease

A corporation should account for the declaration of a 15 percent stock dividend by recording A. only a memorandum entry in the general journal B. a debit to Retained Earnings based on the stock's par value C. a debit to Retained Earnings based on the stock's market value D. a credit to Retained Earnings based on the stock's par value

C. a debit to Retained Earnings based on the stock's market value

If $100,000 of new bonds are issued during the year but $75,000 in old bonds are repaid during the year, the statement of cash flows will show A. a net inflow of cash of $25,000 B. a net outflow of cash of $25,000 C. an inflow of cash of $100,000 and an outflow of cash of $75,000 D. a net gain on retirement of bonds of $25,000

C. an inflow of cash of $100,000 and an outflow of cash of $75,000

When Linda Corporation was formed on January 1, 20X1, the corporate charter provided for 50,000 shares of $10 par value stock. On January 15, 20X1, the company issued 10,000 shares of stock at a price of $15 per share. The entry to record this transaction would include a A. debit to Cash for $100,000 B. debit to Paid-In Capital in Excess of Par Value for $50,000 C. credit to Common Stock for $100,000 D. credit to Common Stock for $150,000E. both A and D

C. credit to Common Stock for $100,000

When a company sells Treasury Stock at a price greater than its cost to the company, the excess A.is credited to Retained Earnings B. is reported in the balance sheet as a an asset C. increases paid in capital in excess of par D. represents gain on the sale of treasury stock reported in the income statement

C. increases paid in capital in excess of par

Dividends were declared on December 2, 20X8. The dividends were paid on January 16, 20X9. The entry to record payment of the dividends will: A. no entry is needed B. decrease assets and decrease owners' equity C. increase liabilities and decrease owners' equity D. decrease liabilities and decrease owners' equity E. decrease assets and decrease liabilities

E. decrease assets and decrease liabilities

(see problem for details) The cash inflow (outflow) from financing activities was: A. $(40,000) B. $31,000 C. $(78,000) D. $(66,000)

D. $(66,000)

On January 1, 20X7, Dover Corp. issued $1,000,000, 10-year, 12% bonds, dated January 1, 20X7, at 103. Interest is payable semiannually on January 1 and July 1. How much cash will Dover receive on the issue date? A. $1,006,000 B. $1,036,000 C. $1,042,000 D. $1,030,000

D. $1,030,000

On July 1, 20X7, Parker Co. issued $200,000, 8%, 10-year bonds at 87.5, when the market rate of interest was 10%. Interest is payable semiannually on the bonds, on 1/1 and 7/1. Parker uses the straight-line method of amortization. What are the proceeds on July 1, 20X7? A. $200,000 B. $220,000 C. $216,000 D. $175,000

D. $175,000

On July 1, 20X7, Parker Co. issued $200,000, 8%, 10-year bonds at 87.5, when the market rate of interest was 10%. Interest is payable semiannually on the bonds, on 1/1 and 7/1. Parker uses the straight-line method of amortization. On December 31, 20X7, the balance sheet will report what net (carrying) value for these bonds? A. $200,000 B. $175,000 C. $173,750 D. $176,250

D. $176,250

On January 1, 20X5, Kurt Corporation purchased a patent for $25,500. Kurt estimates a life of 10 years for the patent, but the patent has a remaining legal life of 15 years. Kurt Corporation should record amortization expense in 20X5 of: A. $0 B. $1,500 C.$1,700 D.$2,550

D. $2,550

(see problem for details) The amount of cash generated from operations this year was: A. $30,000 B. $42,000 C. $59,000 D. $76,000 E. $82,000

D. $76,000

The calculation of both units-of-production depreciation and depletion expense per unit is: A. (Cost + Salvage)/Estimated number of Units B. Cost/Estimated life in Years C. (Cost + Salvage)/Estimated life in Years D. (Cost - Salvage)/Estimated number of Units

D. (Cost - Salvage)/Estimated number of Units

Assume the machine was operated for 2,000 hours during 20X4. Units of production depreciation for 20X4 would be A. $4,400 B. $6,600 C. $6,000 D. $4,000

D. 4,000

Nine months ago, Metro Insurance Company sold a one-year insurance policy to a customer and recorded the sale by debiting Cash for $720 and crediting Unearned Premium Revenue for $720. No adjusting entries have been prepared during the nine-month period. The annual financial statements for the current year are now being prepared. Based on these facts, the adjusting entry required at the end of the current year should include A. A debit of $180 to Unearned Premium Revenue B. A debit of $540 to Premium Revenues C. A debit of $180 to Premium Revenues D. A credit of $540 to Premium Revenues

D. A credit of $540 to Premium Revenues

Pine Company uses the percent-of-sales method to estimate uncollectible accounts expense and has found that such expense has consistently approximated 1% of net sales. At December 31 of the current year receivables total $150,000 and the Allowance for Uncollectible Accounts has a credit balance of $400 prior to adjustment. Net sales for the current year were $600,000. The adjusting entry should be: A. A debit to Uncollectible Accounts Expense and a credit to Allowance for Uncollectible Accounts for $5,600 B. A debit to Uncollectible Accounts Expense and a credit to Allowance for Uncollectible Accounts for $6,400 C. A debit to Allowance for Uncollectible Accounts and a credit to Accounts Receivable for $6,000 D. A debit to Uncollectible Accounts Expense and a credit to Allowance for Uncollectible Accounts for $6,000

D. A debit to Uncollectible Accounts Expense and a credit to Allowance for Uncollectible Accounts for $6,000

Cash balance per books: $34,888 Customer's check returned - NSF: 1,700 The Bank collected an EFT receipt of $14,990: 14,990 Deposits in transit on March: 319,132 Deposit in transit on February: 286,000 Outstanding checks on March: 313,500 Bank Service charge: 26 Check #457 written for $3,450 was erroneously recorded by Horton as $3,540. The check was in payment of an account payable. 26. The EFT receipt by the bank A. Does not belong on the March 31 bank reconciliation B. Added to the bank balance C. Deducted from the bank balance D. Added to the book balance E. Deducted from the book balance

D. Added to the book balance

Cash balance per books: $34,888 Customer's check returned - NSF: 1,700 The Bank collected an EFT receipt of $14,990: 14,990 Deposits in transit on March: 319,132 Deposit in transit on February: 286,000 Outstanding checks on March: 313,500 Bank Service charge: 26 Check #457 written for $3,450 was erroneously recorded by Horton as $3,540. The check was in payment of an account payable. 27. Error in recording check #457 A. Does not belong on the March 31 bank reconciliation B. Added to the bank balance C. Deducted from the bank balance D. Added to the book balance E. Deducted from the book balance

D. Added to the book balance

Which of the following is not a stockholders' equity account? A. Preferred Stock B. Common Stock C. Paid-In Capital from Treasury Stock Transactions D. Bonds Payable

D. Bonds Payable

A strong system of internal control A. Encourages adherence to management's policies B. Promotes operational efficiencies C. Helps insure accurate accounting data D. Does all of these E. Does B and C only

D. Does all of these

The accounting technique of recognizing depreciation on an asset over its useful life comes most directly from which of the following assumptions? A. Cost principle B. Objectivity principle C. Unit-of-measurement principle D. Expense recognition principle

D. Expense recognition principle

When an allowance for the estimating of uncollectible accounts is in use, the writing off of an individual account receivable as worthless will: A. Be recorded by a debit to Uncollectible Account Expense B. Be recorded by a credit to Uncollectible Account Expense C. Be recorded by a credit to the allowance account D. Have no effect on the total assets of the company

D. Have no effect on the total assets of the company

The entry to record cash received from a customer in advance of performing the services has what effect on the financial statements? Assets, Liab, S/E, Rev, Exp, N/I A.Increase, No effect, Increase, Increase, No effect, Increase B.Decrease, Increase, No effect, Increase, No effect, Increase C.No effect, Increase, Increase, Increase, Decrease, No effect D.Increase, Increase, No effect, No effect, No effect, No effect

D. Increase, Increase. No effect, No effect, No effect, No effect

Which of the following statements concerning inventory is true A. Inventory should be recorded as an expense in the period that it is purchased. B. Inventory should be recorded as an expense in the period that it is paid for. C. Inventory is an asset and should never be recorded as an expense. D. Inventory should be recorded as an expense in the period that it is sold.

D. Inventory should be recorded as an expense in the period that it is sold.

Allen Co. failed to record a transaction for providing a service to a customer on credit. As a result: A. assets are understated. B. net income is understated. C. stockholders' equity is understated. D. all of the above are correct.

D. all of the above are correct.

Which one of the following affects cash during a period? A. recording depreciation expense B. declaration of a cash dividend C. write-off of an uncollectible account receivable D. payment of an account payable E. all of the above

D. payment of an account payable

Refer to Question #45. The warranty expense will affect net income in: A. the period the defective units come back for replacement. B. the period the units are paid for. C. the period the replacements units are purchased. D. the period the units are originally sold to customers.

D. the period the units are originally sold to customers.

A corporation issued $10,000, 12%, 5-year bonds on January 1, 20X7 for $9,230. Interest is paid semi-annually on January 1 and July 1. If the corporation uses the straight-line method of amortization of bond discount, the amount of bond interest expense to be recorded on July 1, 20X7, is A. $1,354 B. $600 C. $77 D. $523 E. $677

E. $677

Bear Company sells a machine that cost $36,000 and had accumulated depreciation of $29,500, at a gain of $600. What amount of cash flow from the sale of the machine will appear on the cash flow statement? A. Cannot be determined from the information given B. $6,500 C. $5,900 D. $600 E. $7,100

E. $7,100

Milton Company has a machine that was acquired on January 1, 20X3, at a cost of $19,800. The estimated useful life is 6 years, and the expected residual value is $1,800. The company uses the straight-line depreciation. On December 31, 20X6, the company sold the machine for $9,000 cash. The company should record: A. No gain or loss B. A gain of $3,000 C. A loss of $1,800 D. A loss of $1,200 E. A gain of $1,200

E. A gain of $1,200

A credit is used to record: A. A decrease in an expense account B. A decrease in an asset account C. An increase in an unearned revenue account D. An increase in a revenue account E. All of the foregoing

E. All of the foregoing

Which of the following classifications would represent the most shares of common stock? A. Issued shares B. Outstanding shares C. Treasury shares D.Unused shares E.Authorized shares

E. Authorized shares

Cash balance per books: $34,888 Customer's check returned - NSF: 1,700 The Bank collected an EFT receipt of $14,990: 14,990 Deposits in transit on March: 319,132 Deposit in transit on February: 286,000 Outstanding checks on March: 313,500 Bank Service charge: 26 Check #457 written for $3,450 was erroneously recorded by Horton as $3,540. The check was in payment of an account payable. 25. The NSF check for $1,700 A. Does not belong on the March 31 bank reconciliation B. Added to the bank balance C. Deducted from the bank balance D. Added to the book balance E. Deducted from the book balance

E. Deducted from the book balance

Dividends paid appear on the Statement of Cash Flows as: A. as addition to operating activities B. a subtraction from investing activities C. a subtraction from operating activities D. an addition to financing activities E. a subtraction from financing activities

E. a subtraction from financing activities

If 20X9 ending inventory is overstated, then A. 20X9 cost of goods is also overstated B. 20X9 cost of goods sold is understated C. 20X9 gross profit is also overstated D. both A and C E. both B and C

E. both B and C

Ace Sales (using the accrual basis of accounting) began business in June. Determine the correct month and amounts for the following: Late in June they ordered $10,000 of merchandise; in July the merchandise was shipped to Ace from the vendor, who sent an invoice to Ace at that time. In September, Ace paid $10,000 to the vendor for the merchandise purchased in June. Record purchase of inventory in _____________________, for $______________________.

July $10,000

In June, they purchased supplies on account of $2,000. In July, Ace paid $1,000 on account for the supplies. At the end of July, they determined that $500 of supplies remained on hand. Record expense related to supplies used in _____________________, for $______________________.

July, $1,500

In July they purchased $9,000 of equipment, paying $900 cash down and signing a note payable for $8,100. In August, Ace paid $810 cash on the note payable, along with $81 of interest expense. Record purchase of equipment in _____________________, for $______________________.

July, $9,000

Near the end of September, Ace hired two employees. At the end of September, Ace owed them $1,800 in wages. These wages were paid early in October. Record salary expense in _____________________, for $______________________.

September, $1,800

which of the following statements is NOT true? a. the balance sheet shows a company's accounting equation b. the cash flow statement shows the amt of cash the company expects to collect from customers c. another name for the balance sheet is the statement of financial position d. the income statement reports revenues and expenses

b. the cash flow statement shows the amt of cash the company expects to collect from customers

which of the following would improve the company's debt ratio? a. accruing liability b. collecting on an accounts receivable c. issuing common stock for cash d. recording more depreciation

c. issuing common stock for cash

which of the following activities causes EPS to increase? a. issue a stock dividend b. declare a 3:1 stock split c. purchase treasury stock d. increase depreciation expense

c. purchase treasury stock

what does the quick (acid-test) ratio tell you? a. how many of the assets are owned by creditors b. how quickly s company will repay its liabilities c. how many of the assets are owned by stockholders d. if the entity can pay all of its current liabilities if they became due immediately

d. if the entity can pay all of its current liabilities if they became due immediately

which of the following would improve the return on equity? a. issuing bonds payable b. issuing a 10% stock dividend c. issuing common stock d. increasing net income by either lowering expenses or earning additional revenue

d. increasing net income by either lowering expenses or earning additional revenue

which of the following accounts would NOT be included in "accrued and other current liabilities"? a. interest payable b. payroll taxes payable c. warranty payable d. notes payable

d. notes payable

Prior to the purchase of inventory on account, a company has a current ratio of 1.5 and a debt ratio of 0.5. What effect does the purchase of inventory on account have on these two ratios? (increase, decrease, no effect) Current ratio: ______________ Debt ratio: ________________

decrease increase