Accounting

For its most recent year a company had Sales (all on credit) of $830,000 and Cost of Goods Sold of $525,000. At the beginning of the year its Accounts Receivable were $80,000 and its Inventory was $100,000. At the end of the year its Accounts Receivable were $86,000 and its Inventory was $110,000. On the basis of the information provided, what is the company's accounts receivable turnover:

10.0

Which type of journal entries are made at the end of each accounting period so that the financial statements better reflect the accrual method of accounting?

Adjusting

A company borrowed $100,000 on December 1 by signing a six-month note that specifies interest at an annual percentage rate (APR) of 12%. No interest or principal payment is due until the note matures on May 31. The company prepares financial statements at the end of each calendar month. The following questions pertain to the adjusting entry that should be entered in the company's records. What date should be used to record the December adjusting entry?

December 31

ABC Co. performed services for Client Kay in December and billed Kay $4,000 with terms of net 30 days. ABC follows the accrual basis of accounting. In January ABC received the $4,000 from Kay. In January ABC will debit Cash, since cash was received. What account should ABC credit in the January entry?

accounts recievable

Which would be the most favorable basis for allocating manufacturing overhead for a factory with automated equipment and a significant variation of services by its indirect labor?

activity based costing

The book value of an asset is defined as:

cost minus accumulated depreciation

A corporation's working capital is calculated using which amounts?

current assets and current liabilities

A company disposes of equipment that it no longer uses in its business. The amount received by the company is more than the amount the asset is carried at in the accounting records. The company will report a(n):

gain

Which financial statement will allow you to determine the gross margin for a retailer or manufacturer?

income statement

On December 1 a company borrowed $100,000 at 12% per year. The interest will be paid quarterly, with the first payment due on March 1. What should the company report on its income statement for December?

interest expense of $1,000

A company borrowed $100,000 on December 1 by signing a six-month note that specifies interest at an annual percentage rate (APR) of 12%. No interest or principal payment is due until the note matures on May 31. The company prepares financial statements at the end of each calendar month. The following questions pertain to the adjusting entry that should be entered in the company's records. What is the name of the account that will be credited?

interest payable

ABC Co. incurs cleanup expense of $500 on December 30. The supplier's invoice states that the $500 is due by January 10 and ABC will pay the invoice on January 9. ABC follows the accrual basis of accounting and its accounting year ends on December 31. What is the effect of the cleanup service on the December balance sheet of ABC?

liabilities increased

A corporation's net income will cause a change in which component of stockholders' equity?

retained earnings

Net Income-$100,000 Depreciation Expense-$10,000 Net increase in accounts receivable-$5,000 Net increase in accounts payable-$3,000 On the basis of the information provided in the table above for a corporation, the corporation's net cash flow from operating activities for the current year is:

$108,000

On May 31, Company O's general ledger shows a cash balance of $5,123. The May 31 bank statement shows a balance of $4,905. Other information is available as follows: 1. A May 31 deposit of $300 does not appear on the bank statement; but a $3 service charge does. 2. A customer's $40 insufficient funds check has been returned with the bank statement. 3. Outstanding checks of $10, $15, and $100 are identified on May What is the correct cash balance on May 31?

$5,080

At December 31 a company's records show the following information: Cash-$10,000 Accounts Receivable-$30,000 Inventory-$80,000 Prepaid Insurance-$6,000 Long-Term Assets-$200,000 Accounts Payable-$30,000 Notes Payable in 10 months-$25,000 Wages Payable-$5,000 Long-Term Liabilities-$70,000 Stockholders Equity-$196,000 The company's working capital is

$66,000

The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a specific date is the:

Balance sheet

In a period of rising prices, which inventory valuation method would generally yield both the lowest ending inventory value and the lowest net income figure?

Last in, first out (LIFO)

In the statement of cash flows, the section for cash flows from operating activities will include which of the following?

a decrease in accounts payable

Client Jay pays ABC Co. $1,000 in December for ABC to perform services for Jay in 45 days. ABC uses the accrual basis of accounting. In December ABC will debit Cash for $1,000. What will be the other account involved in the December accounting entry prepared by ABC?

unearned revenue