ACC EXAM 2 MSU

A-One Construction What is the balance of accounts receivable at December 31st?

$515,000

cost of goods sold is equal to

beginning inventory plus purchases minus ending inventory

Transportation-in is

the shipping cost to be paid by the buyer of merchandise purchased when the terms of FOB shipping point

Fantasy Cruise Lines On January 1, 2019 the company purchased a ship for $1,000,000. It has a 10-year useful life and a residual value of $100,000. The company uses the double-declining-balance method. Refer to Fantasy Cruise Lines. Compute the amount of depreciation expense for the year ended December 31, 2019.

$200,000

Which of the following would be correct if a company factored $2,500,000 of receivables with a 2 percent fee?

$50,000 debit to factoring fee expense

Fernbank Farms 2019 100,000 5 years 20,000 30,000 5 years 8000

$80,000

Pham Enterprises the year ended December 31st 450000 cost of goods sold 299,500 inventory jan 1 48,400 inventory dec 31 49,670 What is the company's inventory turnover ratio for the year ended December 31st?

33.44

which of the following is not a sound internal control procedure for cash disbursements?

Control Environment. ... Communication (and Information) ... Risk Assessment. ... Control Activities. ... Monitoring.

If a company uses the direct write-off method of account for bad debts

it will report accounts receivable on the balance sheet at their net realizable value. ... it will record bad debt expense only when an account is determined to be uncollectible.

Each of the following items is considered a cash equivalent except

money market funds

Which of the following is a reconciling item on the bank side of a bank reconciliation?

outstanding checks

while preparing a bank reconciliation, which of the following items would be subtracted from the balance per the bank statement?

service charges NSF

Accent flooring The company received a promissory note from a customer on March 1, 2019. The principal amount of the note is 20,000; the terms are 3 months and 9% annual interest. R At the maturity date, the customer pays the amount due for the note and interest. What entry is required the books of accent flooring on the maturity date assuming none of the interest had already been recognized?

$450

On June 30, a company had 1,924 in its cash account according to its general ledger. This included a deposit of 174 that was in transit on June 30th. The June 30th statement contained the following information:

2014

a company had beginning receivable of $175,000. All sales were on account and totaled $550,000. Cash collected from customers totaled 650,000. calculate the ending accounts receivable balance.

75,000

In the reconciliation of a bank statement, deposits in transit should be

Subtracted from the depositor's book cash balance.

On January 1, a company sold a machine for $5,000 that it had used for several years. The machine cost $11,000 and had a accumulated depreciation of $4,500 at the time of sale. What gain of loss will be reported on the income statement for the sale of the machine for the year ending December 31?

loss of 1500

in order to determine inventory for its balance sheet, a company must count the inventory at the end of its accounting period according to

The periodic inventory system

The operating cycle is the elapsed time between the

The length of time between the purchase of inventory and the cashcollected from the sale of inventory.

A physical count of inventory is required even though the company uses the perpetual inventory system. This is an example of which of the following internal control activities?

Periodic inventory systems provide better control over inventories than perpetual inventory systems.

If a company erroneously records a $50 check received from a customer as $500 in its records, What must occur when reconciling its bank statement?

the company must decrease the balance per its records by $450

Fantasy Cruise Lines On January 1, 2019 the company purchased a ship for $1,000,000. It has a 10-year useful life and a residual value of $100,000. The company uses the double-declining-balance method. Refer to Fantasy Cruise Lines. Refer to Fantasy Cruise Lines. What will be the book value of the ship after ten years?

$100,000

Klump Co.Klump Co. uses a perpetual inventory system and had the following inventory transactions for the month of June.

$2541.89

A-one contruction If the aging approach is used to estimate bad debts, what amount should be recorded as a bad debt expense?

$27,100

Tedder Co. Tedder uses a periodic inventory system. At the end of January, 20 units were on hand. Jan. 1 beginning inventory 10 units at $2 each $20 Purchased 90 units for $3 $270 Cost of good available for sale $290

$60

Fabian Woodworks This company purchased a truck at a cost of $12,000. The truck has an estimated residual value of $2,000 and an estimated life of 5 years, or 100,000 hours of operation. The truck was purchased on January 1, 2019, and was used 27,000 hours in 2019 and 26,000 hours in 2020. depreciation expense

10,000

An oil company purchased 10,000 acres of land on January 1, for $5,000,000, on which it developed an underground oil site. The company spent 11,000,000 to prepare the site for operation but believes that 500,000 barrels of oil can be extracted from the site over 5 years after drilling begins. The land has a residual value of 250,000. Assuming 50,000 barrels of oil were extracted from the land in 2021, how much depletion would be recorded?

1575000

On January 2, Alfredo Corporation sold merchandise with a gross price of $100,000 to a customer with the terms of 2/10, n/30. How much sales discounts would be recorded if payment was received from the customer on January 8? Assume the company uses the gross method of recording receivables.

2,000

Calculate the cost of goods sold Aaron Corporation 250,000 112,500 8000 15000 74000 5000 26500 7500

65,500

A company receiving payment of a $20,000 accounts receivable within 10 days with terms of 2/10, n/30, would record a sales discount of:

720

Which inventory cost flow method assigns the cost of the most recent items purchased to ending inventory?

LIFO

On the balance sheet, the cumulative amount of plant and equipment already expenses is reported in an account called

accumulated depreciation

Dietz, Inc. sells merchandise on credit. If a customer pays its balance due within the discount period, what is the effect of the payment on Dietz's accounting equation?

assets and shareholders' equity decrease

if the amount assigned to ending inventory is incorrect,

both the balance sheet and income statement are affected

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

cancelled checks

which of the following items would not be a reconciling item on a bank reconciliation?

cancelled checks

Which of the following is an accurate description of the allowance for doubtful accounts?

contra

Art Shoes This company received a promissory note from a customer on July 1, 2019. The face amount of the note is $45,000; the terms are 12 months and 10% annual interest. The effect of recognizing the transaction on the maturity date is

decrease to notes receivable

Which of the following sets of factors is needed to calculate depreciation on plant and equipment?

the estimated life of the asset, its acquisition cost and its residual value.

Which of the following is the correct entry to establish a petty cash fund in the amount of $300?

debit Petty cash Fund 300 credit Cash 300

At the year-end inventory count, if goods in transit are shipped FOB destination, they should be included in the inventory count of

the seller