Accounting Review Multiple Choice

Which of the following is not an external user of a business's financial information? A. taxing authorities B. Customers C. Employees D. Investors

C. Employees

Which of the following characteristics best describes a corporation? A. A business with a single owner B. Is not taxed C. Stockholders not personally liable for entity's debts D. Not a separate taxable entity

C. Stockholders not personally liable for entity's debts

Which of the following accounts is a liability? A. Accounts Receivable B. Service Revenue C. Unearned Revenue D. Prepaid Rent Expense

C. Unearned Revenue

Adjusting the accounts is the process of A. Subtracting expenses from revenues to measure net income B. Recording transactions as they occur during the period C. Updating the accounts at the end of the period D. Zeroing out account balances to prepare for the next period

C. Updating the accounts at the end of the period

Separation of duties is important for internal control of A. cash receipts. B. cash payments. C. Neither of the above D. Both A and B

D. Both A and B

Brickman Corporation uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $1,000. During the year Brickman wrote off uncollectible receivables of $2,100. Brickman recorded Bad Debts Expense of $2,700. What is Brickman's year-end balance in Allowance for Bad Debts? A. $1,600 B. $4,800 C. $3,700 D. $600

A. $1,600

Clean Water Softener Systems has Cash of $600, Accounts Receivable of $900, and Office Supplies of $400. Clean owes $500 on Accounts Payable and Salaries Payable of $200. Cleans current ratio is A. 2.71 B. 2.50 C. 0.63 D. 0.37

A. 2.71

Assume Juniper Natural Dyes made Net Sales Revenue of $90,000 and Cost of Goods Sold totaled $58,000. What was Juniper Natural Dyes's gross profit percentage for this period? (Round your answer to the nearest whole percent.) A. 36% B. 3.4 times C. 64% D. 17%

A. 36%

Which of the follow is true of accrual basis accounting and cash basis accounting? A. Accrual accounting records revenue only when it is earned B. Accrual accounting is not allowed under GAAP C. Cash basis accounting records all transactions D. All of the above are true

A. Accrual accounting records revenue only when it is earned

The detailed record of the changes in a particular asset, liability, or owner's equity is called A. An account B. A journal C. A ledger D. A trial balance

A. An account

Which of the following accounts must appear on a post-closing trial balance? A. Cash, Salaries Payable, and Owner, Capital B. Cash, Salaries Payable, and Service Revenue C. Cash, Salaries Revenue, and Salaries Expense D. Cash, Salaries Payable, and Salaries Expense

A. Cash, Salaries Payable, and Owner, Capital

Which of the following accounts would be closed at the end of year using the perpetual inventory system? A. Cost of Goods Sold B. Merchandise Inventory C. Accounts Receivable D. Accounts Payable

A. Cost of Goods Sold

Suppose Dave's Discount's Merchandise Inventory account showed a balance of $8,000 before the year-end adjustments. The physical count of goods on hand totaled $7,400. Dave uses a perpetual inventory system. To adjust the accounts, which entry would the company make? A. Debit COGS $600; Credit Merchandise Inventory $600 B. Debit Merchandise Inventory $600; Credit Accounts Receivable $600 C. Debit Accounts Payable $600; Credit Merchandise Inventory $600 D. Debit Merchandise Inventory $600; Credit COGS $600

A. Debit COGS $600; Credit Merchandise Inventory $600

Assume that the weekly payroll of In The Woods Camping Supplies is $300. December 31, end of the year, falls on Tuesday, and In the Woods will pay its employee on Friday for the full week. What adjusting entry will In the Woods make on Tuesday, December 31? A. Debit Salaries Expense $120; Credit Salaries Payable $120 B. Debit Salaries Payable $300; Credit Salaries Expense $300 C. Debit Salaries Expense $120; Credit Cash $120 D. No adjustment is needed because the company will pay the payroll on Friday

A. Debit Salaries Expense $120; Credit Salaries Payable $120

Which of the following requires accounting information to be complete, neutral, and free from material error? A. Faithful representation concept B. Cost principle C. Economic entity assumption D. Going concern assumption

A. Faithful representation concept

Generally Accepted Accounting Principles (GAAP) are currently formulated by the A. Financial Accounting Standards Board (FASB) B. Securities and Exchange Commission (SEC) C. Institute of Management Accountants (IMA) D. American Institute of Certified Public Accountants (AICPA)

A. Financial Accounting Standards Board (FASB)

The balance sheet reports the A. Financial position on a specific date B. Results of operations on a specific date C. Financial position for a specific date D. Results of operations for a specific date

A. Financial position on a specific date

Which inventory costing method assigns to ending merchandise inventory the newest- the most recent- costs incurred during the period? A. First-in, first out (FIFO) B. Weighted-average C. Specific identification C. Last-in, first-out (LIFO)

A. First-in, first out (FIFO)

Which of the following steps of the accounting cycle is not complete at the end of the period? A. Journalize transactions as they occur B. Journalize and post the closing entries C. Prepare the post-closing trial balance D. Prepare the financial statement

A. Journalize transactions as they occur

Which sequence correctly summarizes the accounting process? A. Journalize transactions, post to the accounts, prepare a trial balance B. Journalize transactions, prepare a trial balance, post to the accounts C. Post to the accounts, journalize transactions, prepare a trial balance D. Prepare a trial balance, journalize transactions, post to the accounts

A. Journalize transactions, post to the accounts, prepare a trial balance

Which of the following is most closely linked to accounting conservatism? A. Lower-of-cost-or-market rule B. Materiality concept C. Disclosure principle D. Consistency principle

A. Lower-of-cost-or-market rule

Consider the overall effects on Global Cleaning Service from selling and performing services on account for $6,400 and paying expenses totaling $2,500. What is Global Cleaning Service's net income or net loss? A. Net income of $3,900 B. Net loss of $3,900 C. Net income of $6,400 D. Net income of $8,900

A. Net income of $3,900

The two main inventory accounting systems are the A. Perpetual and periodic B. Purchase and sale C. Returns and allowances D. Cash and accrual

A. Perpetual and periodic

Which of the following is an example of deferral (or prepaid) adjusting entry? A. Recording the usage of offices supplies during the period B. Recording salaries expense for employees not yet paid C. Recording revenue that has been earned but not yet received D. Recording interest expense incurred on a notes payable not due until next year

A. Recording the usage of offices supplies during the period

Get Fit Now gains a client who prepays $540 for a package of six physical training sessions. Get Fit Now collects the $540 in advance and will provide the training later. After four training sessions, what should Get Fit Now report on its income statement assuming it uses the accrual basis accounting method? A. Service Revenue of $360 B. Service Revenue of $540 C. Unearned Service Revenue of $360 D. Cash of $180

A. Service Revenue of $360

The revenue recognition principle requires A. Time to be divide into annual periods to measure revenue properly B. Revenue to be recorded only after the business has satisfied its performance obligation C. Expenses to be matched with revenue of the period D. Revenue to be recorded only after the cash is received

B. Revenue to be recorded only after the business has satisfied its performance obligation

Which of the following is not part of the definition of internal control? A.Separation of duties B. Safeguard assets C. Encourage employees to follow company policy D. Promote operational efficiency.

A.Separation of duties

At year-end, Schultz Inc. has cash of $11,600, current accounts receivable of $48,900, merchandise inventory of $37,900, and prepaid expenses totaling $5,100. Liabilities of $55,900 must be paid next year. What is Schultz's acid-test ratio? A: 1.08 B: 0.21 C: 1.76 D: Cannot be determined from data given

A: 1.08

A Celty Travels Airline jet costs $28,000,000 and is expected to fly 200,000,000 miles during its 10-year life. Residual value is expected to be zero because the plane was used when acquired. If the plane travels 1,000,000 miles the first year, how much depreciation should Fun Travels Airline record under the units-of-production method? A. $2,800,000 B. $140,000 C. $560,000 D. Cannot be determined

B. $140,000

Assume Nile. Com began April with 14 units of inventory that cost a total of $266. During April, Nile.com purchased and sold goods as follows: April 8 Purchase 42 units @$20 April 14 Sale 35 Units @$40 April 22 Purchase 28 units @$22 April 27 Sale 42 unis @$40. Suppose Nile.com used the weighted-average inventory system. Use the Nile.com data to compute the weighted-average unit cost of the company's inventory on hand at April 8. Round weighted-average unit cost to the nearest cent. A. $21.00 B. $19.75 C. $19.50 D. Cannot be determined from the data given

B. $19.75

Austin Sound sold inventory for $300,000, terms 2/10, n/30. Cost of goods sold was $152,000. How much sales revenue will Austin Sound report from the sale? A. $152,000 B. $294,000 C. $148,960 D. $300,000

B. $294,000

Assume Nile. Com began April with 14 units of inventory that cost a total of $266. During April, Nile.com purchased and sold goods as follows: April 8 Purchase 42 units @$20 April 14 Sale 35 Units @$40 April 22 Purchase 28 units @$22 April 27 Sale 42 units @$40 Under the FIFO Inventory costing method and the perpetual inventory system, how much is Nile.Com's Cost of Goods Sold for the sale on April 14? A. $1,106 B. $686 C. $1,400 D. $700

B. $686

Espinoza Air Conditioning & Heating had the following select financial date as of June 30, 2018. Cash $10,000 Cash Equivalents $8,850 Accounts Receivable $3,700 Total current liabilities $29,000 What is Espinoza's cash ratio? A. 0.34 B. 0.65 C. 0.78 D. 1.54

B. 0.65

Nathville Laundry reported assets of $800 and equity of $480. What is Nathville's debt ratio? A. 60% B. 40% C. 67% D. Not enough information is provided

B. 40%

Suppose Maestro's had cost of goods sold during the year of $ 230,000. Beginning merchandise inventory was $ 35,000​, and ending merchandise inventory was $ 45,000. Determine Maestro's inventory turnover for the year. Round to the nearest hundredth. A. 6.57 times per year B. 5.75 times per year C. 5.22 times per year D. 17.39 times per year

B. 5.75 times per year

The adjusted trial balance shows A. Amounts that may be out of balance B. Account balances after adjustments C. Assets and liabilities only D. Revenues and expenses only

B. Account balances after adjustments

Which of the following accounts would be included in the property, plant, and equipment category of the classified balanced sheet? A. Land held for investment B. Accumulated Depreciation C. Office Supplies D. Mortgage Payable

B. Accumulated Depreciation

Sedlor Properties purchased office supplies on account for $800. Which journal entry records the payment of those office supplies? A. Debit Accounts Payable $800; Credit Accounts Receivable $800 B. Debit Account Payable $800; Credit Cash $800 C. Debit Cash $800; Credit Accounts Payable $800 D. Debit Office Supplies $800; Credit Cash $800

B. Debit Account Payable $800; Credit Cash $800

Your business purchased office supplies of $2,500 on account. The journal entry to record this transaction is as follows: A. Debit Office Supplies for $2,500; Credit Accounts Receivable $2,500 B. Debit Office Supplies $2,500; Credit Accounts Payable $2,500 C. Debit Accounts Payable $2,500; Credit Office Supplies $2,500 D. Debit Cash $2,500; Credit Accounts Payable $2,500

B. Debit Office Supplies $2,500; Credit Accounts Payable $2,500

On February 1, Clovis Wilson Law Firm Contracted to provide $3,000 of legal services for the next three months and received $3,000 cash from the client. Assuming Wilson records deferred revenues using the alternative treatment, what would be the adjusting entry recorded on February 28? A. Debit Cash $3,000; Credit Unearned Revenue $3,000 B. Debit Service Revenue $2,000; Credit Unearned Revenue $2,000 C. Debit Unearned Revenue $1,000; Credit Service Revenue $1,000 D. Debit Cash $3,000; Credit Service Revenue $3,000

B. Debit Service Revenue $2,000; Credit Unearned Revenue $2,000

A truck costs $50,000 when new and has accumulated depreciation of $35,000. Suppose Wilson Towing exchanges the truck for a new truck. The new truck has a market value of $60,000, and Wilson pays cash for $40,000. Assume the exchange has commercial substance. What is the result of the exchange? A. No gain or loss B. Gain of $5,000 C. Loss of $5,000 D. Gain of $45,000

B. Gain of $5,000

Which intangible assets is recorded only as part of the acquisition of another company? A. Patent B. Goodwill C. Copyright D. Franchsie

B. Goodwill

Assume that Global Cleaning Service performed cleaning services for a department store on account for $180. How would this transaction affect Global Cleaning Service's accounting equation? A. Increase both assets and liabilities by $180 B. Increase both assets and equity by $180 C. Increase both liabilities and equity by $180 D. Decrease liabilities by $180, and increase equity by $180

B. Increase both assets and equity by $180

Pixel Copies recorded a cash collection on account by debiting Cash and crediting Accounts Payable. What will the trial balance show for this error? A. Cash is overstated B. Liabilities are overstated C. Expenses are overstated D. The trial balance will not balance

B. Liabilities are overstated

Which of the following statements concerning reversing entries is true? A. Reversing entries are required by Generally Accepted Accounting Principles B. Reversing entries are most often used with accrual-type adjustments C. Reversing entries are date December 31, the end of the fiscal year D. Reversing entries are recorded before adjusting entries

B. Reversing entries are most often used with accrual-type adjustments

Which situation indicates a net loss within the Income Statement section of the worksheet? A. Total credits exceed total debits B. Total debits exceed total credits C. Total debits equal total credits D. None of the above

B. Total debits exceed total credits

At December​ 31, 2018​, Stevenson Company overstated ending inventory by​ $36,000. How does this error affect cost of goods sold and net income for 2018? A. Overstates COGS and understates net income B. Understates COGS and overstates net income C. Leaves both COGS and net income correct because the errors cancel each other D. Overstates both COGS and net income

B. Understates COGS and overstates net income

When recording credit card or debit card sales using the net method, A. cash received equals sales. B. cash received equals sales minus the fee assessed by the card processing company. C. cash received equals sales plus the fee assessed by the card processing company. D. cash isn't received by the seller until the customer pays his or her credit card statement.

B. cash received equals sales minus the fee assessed by the card processing company.

At December 31 year-end, Crain Corporation has an $8,400 note receivable from a customer. Interest of 10% has accrued for 10 months on the note. What will Crain's financial statements report for this situation at December 31? A: The balance sheet will report the note receivable of $8,400. B: The balance sheet will report the note receivable of $8,400 and interest receivable of $700. C: Nothing because the business has not received the cash yet. D: The income statement will report a note receivable of $8,400.

B: The balance sheet will report the note receivable of $8,400 and interest receivable of $700.

At the end of a recent year, Global Cleaning Service, a full-service house and office cleaning service, had total assets of $3,630 and equity of $2,280. How much were Global Cleaning Service's liabilities? A. $5,910 B. $3,630 C. $1,350 D. $2,280

C. $1,350

Assume Nile.com began April with 14 units of inventory that cost a total of $ 266. During April​, Nile.com purchased and sold goods as follows​: April 8 Purchase 42 units @$20 April 14 Sale 35 Units @$40 April 22 Purchase 28 units @$22 April 27 Sale 42 unis @$40. Suppose Nile.com used the LIFO inventory costing method and the periodic inventory system. Using the information​ above, determine Nile​.com's cost of goods sold at the end of the month. A. $1,568 B. $133 C. $1,589 D. $154

C. $1,589

JC Manufacturing purchased inventory for $5,300 and also paid a $260 freight bill. JC Manufacturing returned 45% of the goods to the seller and later to a 2% purchase discount. Assume JC Manufacturing uses a perpetual inventory system. What is JC Manufacturing's final cost of the inventory that it kept? (Round your answer to the nearest whole number.) A. $2,997 B. $2,337 C. $3,117 D. $2,857

C. $3,117

Sahara Company's Cash account shows an ending balance of $650. The bank statement shows a $29 service charge and an NSF check for $150. A $240 deposit is in transit and outstanding checks total $240. What is Sahara's adjusted cash balance? A. $291 B. $829 C. $471 D. $470

C. $471

Liberty Company reported beginning and ending total assets of $25,000 and $22,000, respectively. Its net sales revenue for the year were $18,800. What was Liberty's asset turnover ratio? A. 0.75 B. 0.85 C. 0.80 D. 1.25

C. 0.80

Assume Global Cleaning Service had net income of $570 for the year. Global Cleaning Service's beginning and ending total assets were $4,520 and $4,180, respectively. Calculate Global Cleaning Service's return on assets (ROA). A. 12.6% B. 13.6% C. 13.1% D. 7.63%

C. 13.1%

The petty cash fund had an initial imprest balance of $100. It currently has $20 and petty cash tickets totaling $75 for office supplies. The entry to replenish the fund would contain A. A credit to Cash Short & Over for $5 B. A credit to Petty cash for $80 C. A debit to Cash Short & Over for $5 D. A debit to Petty cash for $80

C. A debit to Cash Short & Over for $5

Payment by check is an important internal control over cash payments because A. the check must be signed by an authorized official. B. before signing the check, the official reviews the invoice supporting the payment. C. Both A and B D. None of the above

C. Both A and B

Which principle or concept states that businesses should use the same accounting methods and procedures from period to period? A. Disclosure B. Conservatism C. Consistency D. Materiality

C. Consistency

The journal entry for the purchase of inventory on account using the perpetual inventory system is: A. Debit Merchandise Inventory XXX; Credit Accounts Receivable XXX B. Debit Accounts Payable XXX; Credit Merchandise Inventory XXX C. Debit Merchandise Inventory XXX; Credit Accounts Payable XXX D. Debit Merchandise Inventory XXX; Credit Cash XXX

C. Debit Merchandise Inventory XXX; Credit Accounts Payable XXX

Which of the following is not a closing entry? A. Debit Owner, Capital XXX; Credit Owner, Withdrawals XXX B. Debit Service Revenue XXX; Credit Income Summary XXX C. Debit Salaries Payable XXX; Credit Income Summary XXX D. Debit Income Summary XXX; Credit Rent Expense XXX

C. Debit Salaries Payable XXX; Credit Income Summary XXX

Which method almost always produces the most depreciation in the first year? A. Units-of-production B. Straight-line C. Double-declining-balance D. All produce the same depreciation in the first year

C. Double-declining-balance

Assets are listed on the balance sheet in the order of their A. Purchase date B. Adjustments C. Liquidity D. Balance

C. Liquidity

A copy machine costs $45,000 when new, and has accumulated depreciation of $44,000. Suppose Print and Photo Center discards this machine, receiving nothing. What is the result of the disposal transaction? A. No gain or loss B. Gain of $1,000 C. Loss of $1,000 D. No gain or loss

C. Loss of $1,000

Which type of business organization is owned by only one owner? A. Corporation B. Partnership C. Sole proprietorship D. Items A, B, and C are all correct

C. Sole proprietorship

A worksheet A. is a journal used to record transactions B. is a financial statement that reports net income during the period C. is an internal document that helps summarize data for the preparation of financial statements D. is a ledger listing the account balances and canoes in those accounts

C. is an internal document that helps summarize data for the preparation of financial statements

At December 31 year-end, Crain Corporation has an $8,400 note receivable from a customer. Interest of 10% has accrued for 10 months on the note. What will the income statement report in this situation? A: Nothing because the business has not received cash yet B: Note receivable of $8,400 C: Interest revenue of $700 D: Both b and c

C: Interest revenue of $700

A & D Window Cleaning performed $450 of services but has not yet billed customers for the month. If A & D fails to record the adjusting entry, what is the impact on the financial statements? A. Balance sheet: assets understated; equity overstated income statement: expenses understated B. Balance sheet: liabilities overstated; equity understated income statement: revenues understated C. Balance sheet: assets overstated, equity understated income statement: expenses understated D. Balance sheet: assets understated, equity understated income statement: revenues understated

D. Balance sheet: assets understated, equity understated income statement: revenues understated

Brickman's ending balance of Accounts Receivables is $19,500. Use the data: Brickman Corporation uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $1,000. During the year Brickman wrote off uncollectible receivables of $2,100. Brickman recorded Bad Debts Expense of $2,700. to compute the net realizable value of Accounts Receivable at year-end. A. $16,800 B. $19,500 C. $17,400 D. $17,900

D. $17,900

Which of the follow statements is correct? A. Prepaid Expenses are decreased with a debit B. Unearned Revenue is increased with a debit C. Rent Expense is increased with a credit D. Accounts Payable is increased with a credit

D. Accounts Payable is increased with a credit

Which of the following accounts is not closed? A. Depreciation Expense B. Owner, Withdrawals C. Service Revenue D. Accumulated Depreciation

D. Accumulated Depreciation

What do closing entries accomplish? A. Zero out the revenues, expense, and Owner, Withdrawals B. Transfer revenues, expense, and Owner, Withdrawals to the Owner, Capital account C. Bring the Owner, Capital account to its correct ending balance D. All of the above

D. All of the above

Which account does a merchandiser use that a service company does not use? A. Cost of Goods Sold B. Merchandise Inventory C. Sales Revenue D. All of the above

D. All of the above

Which of the following is a limitation of the direct write-off method of accounting for uncollectibles? A. The direct write-off method overstates assets on the balance sheet. B. The direct write-off method does not match expenses against revenue very well. C. The direct write-off method does not set up an allowance for uncollectibles. D. All of the above

D. All of the above

Which cost is not recorded as part of the cost of a building? A. Real estate commission paid to buy the building B. Construction materials and labor C. Concrete for the building's foundation D. Annual building maintenance

D. Annual building maintenance

League Automobiles sold an automobile for $24,000 on account. The cost of the automobile was $13,440. The sale of the automobile came with one year of free oil changes valued at $360. What would be the journal entry to record the sale? A. Debit Accounts Receivable $24,000; Credit Sales Revenue $24,000. Debit COGS $13,440; Credit Merchandise Inventory $13,440. B. Debit Accounts Receivable $24,360; Credit Sales Revenue $24,000; Credit Unearned Revenue $360. Debit COGS $13,440; Credit Merchandise Inventory $13,440. C. Debit Accounts Receivable $24,000; Credit Sales Revenue $23,640; Credit Service Revenue $360. Debit COGS $13,440; Credit Merchandise Inventory $13,440. D. Debit Accounts Receivable $24,000; Credit Sales Revenue $23,640; Credit Unearned Revenue $360. Debit COGS $13,440; Credit Merchandise Inventory $13,440.

D. Debit Accounts Receivable $24,000; Credit Sales Revenue $23,640; Credit Unearned Revenue $360. Debit COGS $13,440; Credit Merchandise Inventory $13,440.

Posting a $2,500 purchase of office supplies on account appears as follows: A. Credit Cash $2,500; Debit Office Supplies $2,500 B. Credit Office Supplies $2,500; Debit Accounts Payable $2,500 C. Debit Office Supplies $2,500; Credit Accounts Receivable $2,500 D. Debit Office Supplies $2,500; Credit Accounts Payable $2,500

D. Debit Office Supplies $2,500; Credit Accounts Payable $2,500

The journal entry for the purchase of inventory on account using the periodic inventory system is A. Debit purchases XXX; Credit Accounts Receivable XXX B. Debit Accounts Payable XXX; Credit Merchandise Inventory XXX C. Debit Merchandise Inventory XXX; Credit Accounts Payable XXX D. Debit Purchases XXX; Credit Accounts Payable XXX

D. Debit Purchases XXX; Credit Accounts Payable XXX

How should you record a capital expenditure? A. Debit a liability B. Debit capital C. Debit an expense D. Debit an asset

D. Debit an asset

The left side of an account is used to record which of the following? A. Debit or credit, depending on the type of account B. Increases C. Credits D. Debits

D. Debits

What is the order of the subtotals that appear on a multi-step income statement? A. Gross Profit, Operating Income, Net Income, Total Other Income and Expenses B. Operating Income, Gross Profit, Net Income, Total Other Income and Expenses C. Total Other Income and Expenses, Operating Income, Gross Profit, Net Income D. Gross Profit, Operating Income, Total Other Income and Expenses, Net Income

D. Gross Profit, Operating Income, Total Other Income and Expenses, Net Income

Which inventory costing method results in the lowest net income during a period of rising inventory cost? A. Weight-average B. Specific identification C. First-in, first-out (FIFO) D. Last-in, first-out (LIFO)

D. Last-in, first-out (LIFO)

A copy machine costs $45,000 when new, and has accumulated depreciation of $44,000. Suppose Print and Photo Center sold the machine for $1,000. What is the result of this disposal transaction? A. Loss of $44,000 B. Gain of $1,000 C. Loss of $1,000 D. No gain or loss

D. No gain or loss

The Sarbanes-Oxley Act A. Created the Private Company Accounting Board B. Allows accountants to audit and to perform any type of consulting work for a public company. C. Stipulates that violates of the act may serve 20 years in prison for securities fraud D. Requires that an outside auditor must evaluate a public company's internal controls

D. Requires that an outside auditor must evaluate a public company's internal controls

Which method is used to compute depletion? A. Double-declining-balance method B. Straight-line method C. Depletion method D. Units-of-production method

D. Units-of-production method

Accounting is the information system that A. measures business activities B. communicates the results to decision makers C. processes information into reports D. all of the above.

D. all of the above

The document that explains all differences between the company's cash records and the bank's figures is called A. bank collection. B. electronic fund transfer. C. bank statement. D. bank reconciliation.

D. bank reconciliation.

The entry to record a write-off of an uncollectible account when using the direct write-off method involves a A. debit to Allowance for Bad Debts B. credit to Cash C. debit to Accounts Receivable. D. debit to Bad Debts Expense.

D. debit to Bad Debts Expense.

With good internal controls, the person who handles cash can also A. account for cash payments. B. account for cash receipts from customers. C. issue credits to customers for sales returns. D. none of the above.

D. none of the above.

Encryption A. avoids the need for separation of duties. B. creates firewalls to protect data. C. cannot be broken by hackers. D. rearranges messages by a special process.

D. rearranges messages by a special process.

Michelle Darby receives cash from customers. Her other assigned job is to post the collections to customer accounts receivable. Her company has weak A. assignment of responsibilities. B. ethics. C. computer controls. D. separation of duties.

D. separation of duties.

During the year, Bernard Company had net credit sales of $45,000. At the end of the year, before adjusting entries, the balance in Accounts Receivable was $ 12,500 (debit) and the balance in Allowance for Bad Debts was $650 (credit). If the company uses an income statement approach to estimate bad debts at 5%, what is the ending balance in the Allowance for Bad Debts account? A: $1,275 B: $1,600 C: $2,250 D: $2,900

D: $2,900

At year-end, Schultz Inc. has cash of $11,600, current accounts receivable of $48,900, merchandise inventory of $37,900, and prepaid expenses totaling $5,100. Liabilities of $55,900 must be paid next year. Assume accounts receivable had a beginning balance of $67,400 and net credit sales for the current year totaled $807,800. How many days did it take Schultz to collect its average level of receivables? A: 49 B: 35 C: 29 D: 26

D: 26