Accounting Final
40%
A company purchased office equipment for $20,000 and estimated a salvage value of $4,000 at the end of its 5-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is
$4,000 loss
A company sold a truck for $3,000 which had cost $25,000 and had accumulated depreciation of $18,000. What is the amount of the gain or loss which the company would record on this sale?
Supplies Expense
A credit is not the normal balance for which account listed below
$4,800
A factory machine was purchased for $60,000 on January 1, 2006. It was estimated that it would have a $12,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. The company ran the machine for 4,000 actual hours in 2006. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2006 would be
when the inventory is sold
According to the matching principle, the cost of inventory becomes an expense
the amount of the Retained Earnings reported on the balance sheet.
After closing entries are posted, the balance in the Retained Earnings account in the ledger will be equal to
supplies
All of the following are property, plant, and equipment except
is a contra account to Accounts Receivable
Allowance for Doubtful Accounts on the balance sheet
$80,000 credit
At January 1, 2006, Burton Industries reported Retained Earnings of $130,000. During 2006, Burton had a net loss of $30,000 and paid dividends to the stockholders of $20,000. At December 31, 2006, the balance in Retained Earnings is
$8,600
At the beginning of September 2006, RFI Company reported Merchandise Inventory of $4,000. During the month, the company made purchases of $7,800. At September 30, 2006, a physical count of inventory reported $3,200 on hand. Cost of goods sold for the month is
an operating expense
Bad Debts Expense is reported on the income statement as
Common Stock
Closing entries are made for all accounts except
decrease assets and increase liabilities
Credits
debit Cash and credit Accounts Receivable.
Deb Smiley, CPA, has billed her clients for services performed. She subsequently receives payments from her clients. What entry will she make upon receipt of the payments?
$11,760
Equipment was purchased for $60,000. Freight charges amounted to $2,800 and there was a cost of $8,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $12,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be
$37,700
Farley Company had beginning inventory of $15,000 at March 1, 2006. The inventory at the end of the month is $17,300. During the month, the company made purchases of $40,000. What is the cost of goods sold for the month of March?
$2,940
Flynn Company purchased merchandise inventory with an invoice price of $3,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Flynn Company pays within the discount period?
cost of goods sold
Gross profit for a merchandiser is net sales minus
debit to Unearned Rrevenue and credit Service Revenue
If a business has received cash in advance of services performed and credits a liability account, the adjusting entry needed after the services are performed will be
FIFO method
In periods of rising prices, the inventory method which results in the inventory value on the balance sheet that is closest to curent cost is the
Additional Paid-In Capital would be credited for 3,100,000
Kohler, Inc. issued 100,000 shares of $1 par value common stock for $32/share. Which of the following statements is true?
are existing debts and obligations
Liabilities
income statement, statement of retained earnings, and balance sheet.
MFP Tutoring performed services and collected $120 in cash. The transaction will affect the
Accounts Receivable
Management could determine the amounts due from customers by examining which ledger account?
$400,000
On Jan. 1, 2014 Miller, Inc. issued $5,000,000 of 8% 10 year bonds which pay interest semi-annually on June 30 and Dec. 31. At the time of issuance the market rate is 6%. The amount of the semi-annual interest payments would be:
Debit Office Supplies Expense, $2,400; Credit Office Supplies, $2,400
Quirk Company purchased office supplies costing $4,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,600 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be
matching principle
Recording depreciation each period is necessary in accordance with the
revenues
Stockholders' equity is increased by
Physical controls
Storing cash in a company safe is an application of which internal control principle?
the first to be allocated to cost of goods sold
The LIFO inventory method assumes that the cost of the latest units purchased are
economic entity assumption
The assumption that states that the activities of each company be kept separate from the activities of its owners and all other companies is the
monetary unit assumption
The assumption that the unit of measure remains sufficiently constant over time is part of the
Monetary unit assumption
The assumption that the unit of measure stays relatively stable over time is the
generally accepted accounting principles
The standards and rules that are recognized as a general guide for financial reporting are called
events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received
Under accrual-basis accounting
current replacement cost
Under the lower of cost or market basis in valuing inventory, market is defined as
straight-line
Which depreciation method is most frequently used in businesses today?
Equipment
Which of the following accounts would not appear in the Current Asset section of a classified balance sheet?
deposits in transit
Which of the following would be added to the balance per bank on a bank reconciliation?
Sales
Which of the following would not be classified as a contra account?