Accounting 131 final exam

If ABC Corp. has 120,000 shares of common stock authorized, has 75,000 shares of common stock issued and holds 6,000 shares of common stock as treasury stock, the total number of outstanding shares of ABC Corp. amounts to:

$69,000

The interest on a $50,000 note at 12% for 2 months is

1,000

Lock Corporation sold $2,000,000, 6%, 10-year bonds on January 1, 2010. The bonds were dated January 1, 2010, and pay interest on January 1. Lark uses the straight-line method to amortize bond premium or discount. The journal entry to record the issuance of the bonds, assuming that the bonds sold at 103, would include:

A credit to cash for 2,060,000

The closing entry for utilities expense would include:

A debit to income summary and a credit to utilities expense

Which one of the following is a correct fundamental accounting equation

Assets=Liabilites + Stockholder's equity

Accumulated depreciation is classified a(n)

Contra-Asset account

The sales Discount account is a

Contra-Revenue account

Jensen Distribution Company's sales for the day totaled $10,552. Jenkins collected an additional 7.50% in sales tax. The entry to record the day's sales includes a:

Credit to sales tax payable

Cash Collected and recorded by a company but not yet reflected in a bank statement are known as

Deposits In transit

Which of the following has a normal debit balance?

Dividends

Which of the following assets is not subject to deprecation?

Land

There are some liabilities such as income taxes payable and the estimated warranty liability for which the amounts must be estimated so they can be recorded in the same period as the related revenues. failure to record these amounts in the same period as the related revenues is a violation of the

Matching Principle

A check returned by a bank because the issuer's cash account balance could not cover the check is called a

NSF Check

Which of the following is decreased with a debit:

Notes Payable

All amounts paid to acquire a property, plant and equipment asset and to get it ready for its intended use are referred to as:

Operating Expenses

Treasury stock causes a:

Outstanding shares to be less than issued shares

Under the perpetual inventory system, in addition to making the entry to record a sale, a company would

Record a decrease in inventory and an increase in cost of goods sold for the cost of the merchandise sold

The best definition of assets is the:

Resources belonging to a company having future benefit to the company

Which internal control activity is followed when inventory storage areas are secured with limited access?

Safeguard of assets and records

Which of the following best describes expenses

The cost of assets used, or the liabilities created, in the operations of a business

A repair to an appliance under warranty occurs within the warranty period. what adjustment is made on the seller's accounting records?

Warranted liability credited

The account called "accounts Receivable" is Used:

When money is due the company form another business or individual generally from selling to a customer on credit

An accrual refers to an event:

Where the expense or revenue is recorded before the cash settlement

Net realizable account receivable is calculated as:

accounts receivable less allowance for doubtful accounts

Which of the following items are withheld from an employees Paycheck?

both a and c

The issuance of no-par common stock requires a:

credit to common stock

The book value of a depreciable asset equals:

original cost - accumulated depreciation

Which internal control activity is violated when the cashier at a cash register in a retail store also records the daily receipts in a journal?

Segregation of duties

A gain is recorded on the sale of property, plant and equipment asset when:

The asset is sold for a price greater than the asset's Book value

The ending balance in retained earnings appears on the:

Balance sheet and statement of retained earnings

Blurry Corp. issued 10-year, 9%, $100,000 bonds paying interest on an annual basis, at a $6,200 premium. Which one of the following statements is true?

Blurry's annual interest expense on the bonds will be less than the amount of interest payments to bond holders each year

The normal balance of an expense account is a (Blank) while the normal balance of revenue account is a (Blank)

Debit, Credit

Using a perpetual inventory system, which of the following entries would record the cost of merchandise sold on credit.

Debit: Cost of goods sold Credit: Inventory

Accrued interest on a short-term note payable is recorded by:

Debiting interest expense and crediting interest payable

Given The following date: Cogs? Sales Revenue $1,850,000 Beg. Inventory $390,000 Ending Inventory $ 310,000 Purchases Made $1,100,000

$1,180,000

The carrying value of bonds issued at a premium is calculated by:

Adding the remaining balance of premium on bonds payable to Bonds payable

The Matching Principle:

All the Above

A balance sheet on December 31,2011 would report a total stockholder's equity of

$155,000

The stockholder's equity accounts of Jamison Corporation include $7,500 shares of common stock with a stated value of $.50 and 5,000 shares of treasury stock with a total cost of $25,000. The total number of shares outstanding for Jamison Corp is:

$32,500

Information for question 50&51: Wilsonwear uses a perpetual inventory system and the FIFO costing method. The following information is available for the month of March: Mar. 1 on hand, 10 units at $2 each. $20 Mar. 4 Sold 8 units for sales price of $10 each. $80 Mar. 22 Purchased 50 units at $4 each $200 Question: How much is cost of goods sold for March

$560

a $10,000 bond quoted at 103 1/2 is selling for

10,350

A company has a discount policy, which states that, if a customer pays within ten days of the invoice, the customer can take a 2% discount; otherwise the full amount is due in 30 days from the date of the invoice. Which of the following abbreviations are used in business to reflect this discount policy?

2/10, n/30

In 2010, ABC Plumbing Co. sold 400 water heaters at $375 each. The water heaters carry a two-year warranty for repairs. ABC estimates that repair costs will average 2% of the total selling price. How much is ABC's warranty expense for 2010?

3,000

Which of the following does not require a journal entry for a bank reconciliation

Collection by the bank of a note receivable

Lincoln Corporation issued $10,000,000 in bonds. The bonds were sold at a price of $97. The journal entry to record the issuance is:

Debit cash: 9,700,000 Debit Discount on bonds payable : 300,000 Credit Bonds Payable: 10,000,000

Under the allowance method the entry to record the bad debts estimate includes a:

Debit to bad debt expense

Which inventory cost flow method assigns the cost of the most recent items purchased to cost of goods sold

LIFO

the adjustment for the expiration of prepaid insurance originally recorded as an asset, consists of a debit to:

Insurance expense and a credit to prepaid insuracne

On October, 1st, Hillsmith Company borrowed $60,000 from Eight National Bank on a 1-year, 7% note. If the company's fiscal year ends on December 31st, Hillsmith should make a year-end adjusting entry to increase:

Interest Payable $1,050

Which of the following is an example of an accrual?

Interest earned but not yet received

All of the following will affect retained Earnings except:

Investments by owners

Market conditions may force a company to issue its bonds at less than the face value of the bonds. the discount on bonds payable account is used in this situation. this account:

Is a contra asset account

A balance sheet prepared on December 31,2011 would report a total paid in capital of

$115,000

How much is ending inventory at March 31st?

16

Petry Corporation issues 20,000 shares of $.50 par common stock for $6 per share. The account for Additional Paid-In Capital in excess of par will increase by:

$110,000

A Company purchases 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 1st, 2012, and was used 27,000 hours in 2012 and 26,000 hours in 2013. If the company uses the straight line method of depreciation, what is the amount of depreciation expense for 2012?

2,000

Which of the following accounts is not involved in closing entries

Accumulated depreciation-Equipment

The account that shows the amount of accounts receivable that the business does not expect to collect is:

Allowance for Doubtful accounts

The process of allocating a property, plant, and equipment asset and to get expense over the period the asset is used is called:

Amortization

the insurance of common stock above par value requires a:

Credit to Additional paid in Capital (APIC)

The entry to record the issuance of 8,000 shares of $5 par value common stock at $9 per share includes a:

Credit to common stock for 40,000

Receiving a check from a customer on account would include a:

Debit to cash and a credit to Accounts receivable

Which of the following is the appropriate entry to record the declaration of cash dividends?

Debit: Dividends Credit: Dividends payable

Accounts which are closed at the end of an accounting period include:

Revenues Expenses and dividends

The adjusting entry to recored salaries to recored salaries owed to employees but not paid until the next accounting period involves a credit to:

Salaries Payable