ACCT

A company has net sales of $1,200,000 and average accounts receivable of $400,000. What is its accounts receivable turnover for the period?

3.0

The assets of a company total $700,000; the liabilities, $200,000. What are the net assets?

500,000.

Trimble Graphic Design receives $1,500 from a client billed in a previous month for services provided. Which of the following general journal entries will Trimble Graphic Design make to record this transaction?

Cash 1,500 Accounts Receivable 1,500

Which of the following accounts is not included in the calculation of a company's ending owner's equity?

Cash.

If accrued salaries were recorded on December 31 with a debit to Salaries Expense and a credit to Salaries Payable, the entry to record payment of these wages on the following January 5 would include:

A debit to Salaries Payable and a credit to Cash.

A credit sale of $5,275 to a customer would result in which of the following?

A debit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable subsidiary ledger.

Lu Lu's Catering has a debt ratio equal to .3 and its competitor, Able's Bakery, has a debt ratio equal to .7. Determine the statement below that is correct.

Able's Bakery's financial leverage is greater than Lu Lu's.

All of the following are classified as liabilities except:

Accounts Receivable

Assets created by selling goods and services on credit are:

Accounts receivable

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are:

Accrued expenses.

Adjusting entries:

Affect both income statement and balance sheet accounts.

A company purchased a tract of land for its natural resources at a cost of $1,000,000. It expects to harvest 5,000,000 board feet of timber from this land. The salvage value of the land is expected to be $200,000. The depletion expense per board foot of timber is:

$0.16.

Fortune Drilling Company acquires a mineral deposit at a cost of $5,900,000. It incurs additional costs of $600,000 to access the deposit, which is estimated to contain 2,000,000 tons and is expected to take 5 years to extract. Compute the depletion expense for the first year assuming 418,000 tons were mined.

$1,358,500.

A $15 credit to Sales was posted as a $150 credit. By what amount is the Sales account in error?

$135 overstated.

A company had no office supplies available at the beginning of the year. During the year, the company purchased $250 worth of office supplies. On December 31, $75 worth of office supplies remained. How much should the company report as office supplies expense for the year?

$175.

A company pays its employees $4,000 each Friday, which amounts to $800 per day for the five-day workweek that begins on Monday. If the monthly accounting period ends on Thursday and the employees worked through Thursday, the amount of salaries earned but unpaid at the end of the accounting period is:

$3,200.

Peavey Enterprises purchased a depreciable asset for $22,000 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $2,000, Peavey Enterprises should recognize depreciation expense in Year 2 in the amount of:

$5,000

A company purchased a mineral deposit for $800,000. It expects this property to produce 120,000 tons of minerals and to have a salvage value of $50,000. In the current year, the company mined and sold 9,000 tons of minerals. Its depletion expense for the current period equals:

$56,250.

On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31?

$6,000.

Marlow Company purchased a point of sale system on January 1 for $3,400. This system has a useful life of 10 years and a salvage value of $400. What would be the depreciation expense for the first year of its useful life using the double-declining-balance method?

$680.

A company discarded a computer system originally purchased for $18,000. The accumulated depreciation was $17,200. The company should recognize a(an):

$800 loss.

On December 31, 2015 Carmack Company's Prepaid Insurance account had a balance before adjustment of $6,000. The insurance was purchased on July 1 of the same year for one year of insurance coverage. The adjusting entry needed on December 31 is:

Debit Insurance Expense $3,000; credit Prepaid Insurance $3,000.

Giorgio Italian Market bought $4,000 worth of merchandise from Food Suppliers and signed

Debit Notes Receivable $4,000; credit Sales $4,000

Giorgio Italian Market bought $4,000 worth of merchandise from Food Suppliers and signed a 90-day, 6% promissory note for the $4,000. Food Supplier's journal entry to record the sales transaction is:

Debit Notes Receivable $4,000; credit Sales $4,000

On July 9, Mifflin Company receives a $8,500, 90-day, 8% note from customer Payton Summers as payment on account. What entry should be made on July 9 to record receipt of the note?

Debit Notes Receivable $8,500; credit Accounts Receivable $8,500.

On December 31, 2015 Carmack Company received a $215 utility bill for December that it will not pay until January 15. The adjusting entry needed on December 31 to accrue this expense is:

Debit Utilities Expense $215; credit Accounts Payable $215.

The depreciation method in which a plant asset's depreciation expense for a period is determined by applying a constant depreciation rate to the asset's beginning-of-period book value is called:

Declining-balance depreciation.

The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used, representing the expense of using the assets, is called:

Depreciation expense.

Failure by a promissory notes' maker to pay the amount due at maturity is known as:

Dishonoring a note.

The accounts receivable turnover is calculated by:

Dividing net sales by average accounts receivable.

Accounting is an information and measurement system that does all of the following except:

Eliminates the need for interpreting financial data.

On a trial balance, if the Debit and Credit column totals are equal, then:

Equal debits and credits have been recorded for transactions.

All of the following are true regarding ethics except:

Ethics do not affect the operations or outcome of a company.

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

FASB

A finance company or bank that purchases and takes ownership of another company's accounts receivable is called a:

Factor.

A total asset turnover ratio of 3.5 indicates that:

For every $1 in assets, the firm produced $3.50 in net sales during the period.

The annual Federal Unemployment Tax Return is:

Form 940.

Frederick Company borrows $63,000 from First City Bank and pledges its receivables as security. Which of the following is true regarding this transaction:

Frederick Company's financial statements must disclose the pledging of receivables.

Reporting the details of notes is consistent with which accounting principle that requires financial statements (including footnotes) to report all relevant information?

Full disclosure.

Rent expense appears on which of the following statements?

Income statement.

The difference between the amount received from issuing a note payable and the amount repaid at maturity is referred to as:

Interest

The maturity date of a note receivable:

Is the day the note is due to be repaid.

Which of the following is not true about the Allowance for Doubtful Accounts?

It is a liability account.

A benefit of using an accelerated depreciation method is that:

It yields larger depreciation expense in the early years of an asset's life.

Intangible assets do not include:

Land held as an investment.

The person who signs a note receivable and promises to pay the principal and interest is the:

Maker.

The area of accounting aimed at serving the decision making needs of internal users is:

Managerial accounting

The 12-month period that ends when a company's sales activities are at their lowest level is called the:

Natural business year.

Profit margin is defined as:

Net income divided by net sales.

A leasehold is:

The rights granted to the lessee by the lessor of a lease.

Identify the statement below that is true

The trial balance is a list of all accounts from the ledger with their balances at a point in time.

A corporation is:

A business legally separate from its owners.

A general journal is:

A complete record of all transactions in chronological or

A general journal is:

A complete record of all transactions in chronological order from which transaction amounts are posted to the ledger accounts.

A company's ledger is:

A record containing all accounts and their balances used by the company.

The adjusted trial balance contains information pertaining to:

All general ledger accounts.

Which of the following is an accounting procedure that (1) estimates and reports bad debts expense from credit sales during the period the sales are recorded, and (2) reports accounts receivable at the estimated amount of cash to be collected?

Allowance method of accounting for bad debts.

Which of the following statements is incorrect?

An unadjusted trial balance shows the account balances after they have been revised to reflect the effects of end-of-period adjustments.

A trial balance prepared before any adjustments have been recorded is

An unadjusted trial balance.

Employer payroll taxes:

Are added expenses beyond that for the wages and salaries earned by employees.

If a company has excess space in its building that it rents to another company for $700, what is the effect on the accounting equation when the first rent payment is collected?

Assets would increase $700 and equity would increase $700.

The process of transferring general journal entry information to the ledger is called:

Balancing an account.

The total cost of an asset less its accumulated depreciation is called:

Book value.

Natural resources are:

Consumable assets such standing timber, mineral deposits, and oil and gas fields.

An account linked with another account that has an opposite normal balance and is subtracted from the balance of the related account is a(n):

Contra account.

The right side of a T-account is a(n):

Credit.

Jasper makes a $25,000, 90-day, 7% cash loan to Clayborn Co. Jasper's entry to record the collection of the note and interest at maturity should be

Debit Cash $25,437.50; credit Notes Receivable for $25,437.50.

MacKenzie Company sold $180 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 4% service charge for sales on its credit cards. MacKenzie electronically remits the credit card sales receipts to the credit card company and receives payment in approximately 5 days. The journal entry to record the collection from the credit card company would be:

Debit Cash of $172.80 and credit Accounts Receivable—Regional $172.80.

Mullis Company sold merchandise on account to a customer for $625, terms n/30. The journal entry to record the collection on account would be:

Debit Cash of $625 and credit Accounts Receivable $625.

Joel Consulting received $3,000 from a customer for services provided. Joel's general journal entry to record this transaction will be:

Debit Cash, credit Services Revenue.

A company purchased a tract of land for its natural resources at a cost of $1,500,000. It expects to mine 2,000,000 tons of ore from this land. The salvage value of the land is expected to be $250,000. If 150,000 tons of ore are mined during the first year, the journal entry to record the depletion is:

Debit Depletion Expense $93,750; credit Accumulated Depletion $93,750.

When expenses exceed revenues, the resulting change in equity is:

Net loss.

Honoring a note receivable indicates that the maker has:

Paid in full.

A column in journals and ledger accounts that is used to cross reference journal and ledger entries is the:

Posting reference column.

A business's source documents:

Provide objective evidence that a transaction has taken place.

An asset created by prepayment of an insurance expense is:

Recorded as a debit to Prepaid Insurance.

A balance sheet that places the assets above the liabilities and equity is called a(n):

Report form balance sheet.

The statement of owner's equity:

Reports how equity changes over a period of time

f Houston Company billed a client for $10,000 of consulting work completed, the accounts receivable asset increases by $10,000 and:

Revenue increases $10,000.

On December 15 of the current year, Conrad Accounting Services signed a $40,000 contract with a client to provide bookkeeping services to the client in the following year. Which accounting principle would require Conrad Accounting Services to record the bookkeeping revenue in the following year and not the year the cash was received?

Revenue recognition principle.

The question of when revenue should be recognized on the income statement according to GAAP is addressed by the:

Revenue recognition principle.

ay's Limo Services paid $300 cash to employees for work performed in the current period. Which of the following general journal entries will Jay's Limo Services make to record this transaction?

Salaries Expense 300 Cash 300

The basic financial statements include all of the following except

Statement of Changes in Assets.

A simple tool that is widely used in accounting to represent a ledger account and to understand how debits and credits affect an account balance is called a:

T-account.

The specific meaning of goodwill in accounting is:

The amount by which a company's value exceeds the value of its individual assets and liabilities.

An account balance is:

The difference between the total debits and total credits for an account including the beginning balance.

The useful life of a plant asset is:

The length of time it is productively used in a company's operations.

The quality of receivables refers to:

The likelihood of collection without loss.

Identify the account used by businesses to record the transfer of assets from a business to its owner for personal use:

The owner's withdrawals account.

The allowance method based on the idea that a given percent of a company's credit sales for the period is uncollectible is:

The percent of sales method.

One characteristic of plant assets is that they are:

Used in operations

One characteristic of plant assets is that they are:

Used in operations.

Are added expenses beyond that for the wages and salaries earned by employees.

Wage bracket withholding table.

Select the account below that normally has a credit balance.

Wages Payable.

The modified accelerated cost recovery system (MACRS):

s included in the U.S. federal income tax rules for depreciating assets.

Which of the following purposes would financial statements serve for external users?

to fulfill regulatory requirements for companies whose stock is sold to the public.