ACT 500
During the month of July, the Scolari Corporation received $60,000 in investments from owners, paid $25,000 cash for inventory, and purchased $10,000 of inventory on account. The ending balance in the accounts payable account for the month of July is ________.
$10,000 credit The question is specifically asking about accounts payable. Any information that doesn't affect accounts payable is irrelevant to answering this question. The only transaction given for Scolari that affects accounts payable is the purchase of inventory on account ($10,000); and accounts payable is a liability account that carries a normal credit balance.
Maze Mining Co. began the year with retained earnings of $132,000. During the year, Maze Mining earned revenues of $159,000, incurred expenses of $120,000, and declared and paid dividends of $23,000. What is the ending balance of retained earnings?
$148,000
Georgia Company paid $48,000 for two years of insurance coverage on July 1, 2016. The company prepares financial statements on July 31, 2016. What is the amount of insurance expense on July 31?
$2,000
Mason Company has a weekly payroll of $5,000. Wages are paid every Friday for the work performed Monday through Friday of that week. Assuming that the accounting period ends on a Tuesday, what amount of Wages Expense should be recorded on that date?
$2,000
Carly Construction borrowed $25,000 from Crush Casualties on December 30 by signing a 5 year, 7% note payable. The entire $25,000 was deposited into Carly's bank account, and Carly agreed to maintain a minimum of 10% of the deposited funds in the account at all times as a compensating balance. Assuming all funds are still available, how will Carly report the cash received from this loan on the balance sheet on December 31?
$22,500 as Cash, $2,500 as a long-term asset for the compensating balance Cash and cash equivalents reported on the balance sheet cannot include funds that are restricted in any way. Because Carly is required to maintain 10% of the loan balance under this compensating balance agreement, 10% of this loan is restricted and must be disclosed separately. $25,000 x 10% = $2,500 of a compensated balance that must be disclosed as a long-term asset, while the remaining $22,500 will be classified as Cash.
Joss Distributors had the following revenue-related transactions during December: Collected cash for services provided in November, $12,000 Provided services on account, $24,500, of which Joss collected $14,000 Received $2,000 for on December 1 for services to be provided evenly in December and January. According to the revenue recognition principle, how much revenue should Joss record for December?
$25,500
During June, Busy Beaver bought $5,000 of office supplies on account and promised to pay the vendor the full amount in July. At the end of June, Busy Beaver estimated that there was $2,000 of office supplies left unused. How much supplies expense should Busy Beaver report for June?
$3,000
During June, Busy Beaver performed $3,500 of services for clients on account. In June, $500 of this amount was collected in cash. The remaining $3,000 was collected in July. How much service revenue should Busy Beaver report for June (assuming accrual accounting)?
$3,500 The revenue recognition principle states that revenues are to be recorded when earned and not necessarily when cash is received. Therefore, Busy Beaver must record the entire $3,500 in June, regardless of when the cash is collected.
The accounts receivable account had a beginning balance of $100,000, cash received on account was $120,000, and sales on account were $50,000. The ending accounts receivable balance was ________.
$30,000 debit (120,000-100,000)= 20,000 50,000-20,000 = $30,000 debit
During the month of July, the Scolari Corporation received $60,000 in investments from owners, paid $25,000 cash for inventory, and purchased $10,000 of inventory on account. The ending balance in the accounts payable account for the month of July is ________.
$35,000 debit Because this question is specifically asking about inventory, we are only concerned with the transactions that affect the inventory account. Scolari purchased inventory for cash ($25,000) and on account ($10,000). These two transactions bring the balance in the inventory account to $35,000. Because inventory is an asset account, it carries a debit balance.
Angel Outfitters had current assets of $135,000 and current liabilities of $90,000 at year-end. What is Angel's working capital?
$45,000
Blast Enterprises buys a warehouse for $520,000 to use for its East Coast distribution operations. On the date of the purchase, a professional appraisal shows a value of $650,000 for the warehouse. The seller had originally purchased the building for $495,000. Blast has a similar warehouse on the West Coast that has a book value of $535,000. Under the historical cost principle, Blast should record the building for A. $535,000. B. $495,000. C. $650,000. D. $520,000.
$520,000. Historical cost principal: assets should be recorded at their actual cost on the date of purchase
During the month of July, the Scolari Corporation received $60,000 in investments from owners, paid $25,000 cash for inventory, and purchased $10,000 of inventory on account. The ending balance in the paid-in capital account for the month of July is:
$60,000 credit The only transaction affection paid-in capital is the investments from owners ($60,000); equity accounts carry a normal credit balance.
Vaughn-Williams Co. has total assets of $600,000 and owners' equity of $320,000. It purchased $80,000 of merchandise on account and collected $50,000 on account from its customers. As a result, the company's total assets would be __________.
$680,000 collection on account has no affect on the accounting equation as you are increasing one asset, cash, while decreasing another asset, accounts receivable
Navarro Company's ending cash balance is $850 before adjusting items. The only adjusting items were: $26 service charge NSF check for $190. $300 deposit is in transit outstanding checks totaling $470. What was Navarro's unadjusted bank balance on the bank statement?
$804 *The first step here is to prepare the actual bank reconciliation to determine what the adjusted balance will be: $634. After that is determined, you can work backward to determine the ending balance on the bank statement. CASH BANK Ending Balance $850 Ending Balance $804 Service charge (26) Deposits in Transit 300 NSF (190) Outstanding checks (470) Adjusted Balance $634 Adjusted Balance $634*
Angel Outfitters had current assets of $135,000 and current liabilities of $90,000 at year-end. What is Angel's current ratio for the year?
1.50
During the year, Patriot Partners had $245,000 in revenues, $120,000 in expenses, and $40,000 in declared dividends. What was Patriot's net income for the year?
125000 Revenue - expenses
Barton Industries had the following asset accounts at year end: Cash $10,000 Accounts Receivable 2,500 Supplies 750 Equipment 12,000 Building 70,000 Land 112,000 What are Barton's total current assets?
13250 (cash + accounts receivable _ supplies)
Ending assets for CompuHelp equal $650,000, and the beginning retained earnings account was $325,000. If net income during the period was $225,000 and dividends were $150,000, what were ending liabilities?
250000 stockholders' equity, end = stockholders' equity, beg + net income - dividends ending liabilities = assets - stockholders' equity, end
Net income for the period was $245,000. The retained earnings account had a beginning balance of $25,000. If the company paid dividends of $15,000 during the year, what is the ending balance in retained earnings?
255000 ending = beginning + net income - dividends
During the year, Patriot Partners had $245,000 in revenues, $120,000 in expenses, and $40,000 in declared dividends. What was the total change in Retained Earnings during the year?
85000 increase Revenues - Expenses - Dividends = $245,000 - $120,000 - $40,000 = $85,000 Stockholder equity increased by $85,000
Which of the following entities would most likely have an Unearned Revenue account?
A magazine publisher
Jaye Company purchased a new building by signing a note for $21,000. The entry to record the transaction is: A. Building 21,000 Notes Payable 21,000 B. Note Payable 21,000 Cash 21,000 C. Cash 21,000 Note Payable 21,000 D. Building 21,000 Cash 21,000
A. Building 21,000 Notes Payable 21,000
Which account has a normal debit balance? A. Advertising Expense B. Common Stock C. Service Revenue D. Salaries Payable
A. Advertising Expense
All of the following are expenses EXCEPT for: A. Dividends. B. Depreciation Expense. C. Salary Expense. D. Cost of Goods Sold.
A. Dividends.
Which of the following statements is TRUE for a proprietorship? A. For accounting purposes, a proprietorship is separate from the proprietor. B. Legally, a proprietorship is separate from the proprietor. C. The business records include the proprietor's personal finances. D. All statements are correct.
A. For accounting purposes, a proprietorship is separate from the proprietor.
Which of the following statements regarding fraud is INCORRECT? A. Misappropriation of assets is a type of fraud that is committed by company managers who make false and misleading entries in the books in order to improve a company's financial results. B. The perpetrators of fraud usually do so for their own short minus −term economic gain. C. Fraud violates the rights of many for the temporary betterment of a few and for the ultimate betterment of no one. D. Motive, opportunity, and rationalization are elements that make up virtually every fraud.
A. Misappropriation of assets is a type of fraud that is committed by company managers who make false and misleading entries in the books in order to improve a company's financial results.
The debt created by a business when it makes a purchase of inventory on account is a(n): A. account payable. B. note payable. C. account receivable. D. revenue.
A. account payable.
The Public Company Accounting Oversight Board was created to oversee the: A. audits of public companies. B. management of public companies. C. SEC. D. American Institute of Certified Public Accountants.
A. audits of public companies.
A business paid $1900 on account. The journal entry would: A. debit Accounts Payable for $1900 and credit Cash for $1900. B. debit Accounts Receivable for $1900 and credit Revenue for $1900. C. debit Cash for $1900 and credit Accounts Payable for $1900. D. debit Cash for $1900 and credit Retained Earnings for $1900.
A. debit Accounts Payable for $1900 and credit Cash for $1900.
Under accrual accounting, the event that triggers revenue recognition for the sale of goods is the: A. delivery of goods to customer. B. date the customer pays for the goods. C. date a contract is signed. D. date the customer orders the goods.
A. delivery of goods to customer.
A disadvantage of general partnerships is: A. each partner may conduct business in the name of the entity and make agreements that legally bind all partners. B. only individuals can be partners. C. double taxation of distributed profits. D. the partnership's assets are commingled with each partner's personal assets.
A. each partner may conduct business in the name of the entity and make agreements that legally bind all partners.
Receiving cash from a customer on account will A. have no effect on total assets. B. decrease liabilities. C. increase total assets. D. increase stockholders' equity.
A. have no effect on total assets.
A receiving report: A. identifies that the merchandise has been received and ends the purchasing process. B. is sent by the purchasing department to the customer who purchases the item. C. includes the invoice, receiving report, purchase order and purchase request. D. identifies the need for merchandise and begins the purchasing process.
A. identifies that the merchandise has been received and ends the purchasing process.
A doctor performed surgery in March and did not receive cash from the patient until July. Under accrual accounting, the doctor recognizes revenue: A. in March. B. in July. C. in either March or July. D. at a time that cannot be determined from the facts.
A. in March.
The expense recognition principle requires the recognition of expenses: A. in the same period in which the related revenues are earned. B. in the period in which future benefit for the company occurs. C. in the period they are paid. D. in the period assets are created.
A. in the same period in which the related revenues are earned.
Which financial statement answers the following question: How well did the company perform during the year? A. income statement B. statement of cash flows C. balance sheet D. statement of retained earnings
A. income statement
A debit entry to an account A. increases assets. B. increases stockholders' equity. C. increases liabilities. D. both b and c.
A. increases assets.
The adjustment for an accrued expense: A. increases expenses and increases liabilities. B. increases expenses and decreases assets. C. decreases expenses and increases liabilities. D. decreases expenses and increases assets.
A. increases expenses and increases liabilities.
Advantages of a corporation include: A. limited liability of the stockholders for the corporation's debts. B. double taxation of distributed profits. C. each stockholder can conduct business in the name of the corporation. D. difficulty in raising large sums of capital.
A. limited liability of the stockholders for the corporation's debts.
There are three parties to a check. The person who signs the check is the: A. maker. B. draftee. C. payee. D. promisee.
A. maker.
Which of the following increases retained earnings? A. net income B. net loss C. dividends D. expenses
A. net income
A check received from a customer for which there are not sufficient funds in the bank to cover the amount of the check is a(n): A. nonsufficient funds check. B. blank check. C. error. D. service charge.
A. nonsufficient funds check.
After approving an invoice for payment: A. payment is made and the payment packet should then be stamped "paid" by the person in the treasurer's department who has authorized the disbursement. B. checks should be returned to and then mailed by the department who prepared them. C. the receiving department should examine the payment packet to make sure all the documents agree. D. the person who ordered the goods should examine the payment package to make sure all the documents agree.
A. payment is made and the payment packet should then be stamped "paid" by the person in the treasurer's department who has authorized the disbursement.
Closing entries: A. prepare the accounts for the next period's transactions. B. are made at the beginning of each accounting period. C. bring all account balances to zero. D. are the same as adjusting entries.
A. prepare the accounts for the next period's transactions.
When a company receives customers' checks by mail: A. the mailroom sends all customer checks to the treasurer, who has the cashier deposit the checks in the bank. B. the treasurer prepares the journal entries. C. the mailroom employee prepares the journal entries. D. the treasury department cashier prepares the journal entries.
A. the mailroom sends all customer checks to the treasurer, who has the cashier deposit the checks in the bank.
Simmons Company began the month with a balance of $84,000 in Accounts Receivable. An analysis of the account determined that sales on account for the month totaled $112,000. At the end of the month, the balance in Accounts Receivable was $85,000. From this information, it can be determined that Simmons Company had collections from customers on account of: A. $111,000. B. $28,000. C. $113,000. D. $57,000.
A. $111,000. balance at beg + credit sale = Account receivable Account Receivable - balance at end = cash collected
A company completed the following transactions during the month of October: I. Purchased office supplies on account, $4800. II. Provided services for cash, $22,000. III. Provided services on account, $12,000. IV. Collected cash from a customer on account, $7400. V. Paid the monthly rent of $18,000. What was the company's net income for the month? A. $16,000 B. $34,000 C. $52,000 D. $12,000
A. $16,000
Golden Company had the following accounts and balances at the end of the year. What are total assets at the end of the year? Cash $75,000 Accounts Payable $14,000 Common Stock $21,000 Cost of Goods Sold $95,000 Dividends Declared and Paid $12,000 Operating Expenses $12,000 Accounts Receivable $55,000 Inventory $42,000 Long−term Notes Payable $33,000 Revenues $130,000 Salaries Payable $28,000 A. $172,000 B. $117,000 C. $75,000 D. $130,000
A. $172,000 Cash + account receivable + inventory
Lorna Company has the following account balances at the end of the first year of operations: Accounts Payable $37,000 Revenues $104,000 Cost of Goods Sold $40,000 Salaries Expense $13,000 Dividends Declared and Paid $10,000 Utilities Expense $14,000 Advertising Expense $9000 Short minus −term Investments $20,000 Cash $32,000 Land $50,000 Common Stock $50,000 What is the ending balance in Retained Earnings? A. $18,000 B. $27,000 C. $40,000 D. $28,000
A. $18,000 Revenue - expense - cost of goods sold
In 1990, Johnson Company purchased a building for $200,000. In 2017, a real estate professional says the building has a fair value of $1,000,000. In 2017, a similar building down the street recently sold for $900,000. What value, before consideration of accumulated depreciation, is reported for the building on the balance sheet at December 31, 2017? A. $200,000 B. $1,000,000 C. $900,000 D. $600,000
A. $200,000
Which accounts appear on which financial statement? Balance sheet Income statement A. Cash, receivables, payables Revenues, expenses B. Cash, revenues, land Expenses, payables C. Expenses, payables, cash Revenues, receivables, land D. Receivables, land, payables Revenues, supplies
A. Cash, receivables, payables Revenues, expenses
The three main components of the fraud triangle are: A. motive, opportunity and rationalization. B. rationalization, opportunity and greed. C. opportunity, motive and lack of ethics. D. none of the above.
A. motive, opportunity and rationalization.
Which of the following would most likely need accounting information to make a decision?
All of these need accounting information to make a decision.
Which of the following would be included in the total of "Cash and Cash Equivalents" on the balance sheet?
All of these would be classified as "Cash and Cash Equivalents."
Which of the following statements is not true regarding closing entries? Accounts that must be closed include depreciation expense, service revenue, and dividends. Expenses are closed by debiting retained earnings and crediting each expense account. All permanent accounts must be closed to retained earnings at the end of the period. Revenue accounts are closed with a debit to each revenue and a credit to Retained Earnings. I don't know yet
All permanent accounts must be closed to retained earnings at the end of the period.
Accounts Payable had a normal beginning balance of $1,900. During the period, there were debit postings of $900 and credit postings of $700. What was the ending balance? A. $2,100 debit B. $1,700 credit C. $1,700 debit D. $2,100 credit
B. $1,700 credit
Which accounts are increased by debits? A. Cash and Accounts Payable. B. Accounts Receivable and Utilities Expense. C. Accounts Payable and Service Revenue. D. Salaries Expense and Common Stock.
B. Accounts Receivable and Utilities Expense.
A company purchased supplies of $5000 on account. How does this transaction affect the accounting equation? A. Add $5000 to Supplies and add $5000 to Notes Payable. B. Add $5000 to Supplies and add $5000 to Accounts Payable. C. Add $5000 to Supplies Expense and add $5000 to Notes Payable. D. Add $5000 to Supplies and subtract $5000 from Cash.
B. Add $5000 to Supplies and add $5000 to Accounts Payable.
On October 1, 2016, Golde Company paid $18,600 for one year of insurance for the period, October 1, 2016 through September 30, 2017. Which of the following will be part of the adjusting entry on December 31, 2016? A. Debit Prepaid Insurance for $4650 B. Debit Insurance Expense for $4650 C. Debit Insurance Expense for $13,950 D. Debit Prepaid Insurance for $13,950
B. Debit Insurance Expense for $4650
Which statement is false? A. Assets are increased by debits. B. Dividends are increased by credits. C. Liabilities are decreased by debits. D. Revenues are increased by credits.
B. Dividends are increased by credits.
Which of the following is the most accurate statement regarding ethics as applied to decision making in accounting? A. It is impossible to learn ethical decision making, since it is just something you decide to do or not to do. B. Ethics involves making difficult choices under pressure and should be kept in mind in making every decision, including those involving accounting. C. Ethics is becoming less and less important as a field of study in business. D. Ethics has no place in accounting, since accounting deals purely with numbers.
B. Ethics involves making difficult choices under pressure and should be kept in mind in making every decision, including those involving accounting.
Sarah Zocki is interviewing next week for a job at Rainbow Inks Corporation. Which financial statement should she examine to evaluate how well Rainbow Inks Corporation performed last year? A. Balance sheet B. Income statement C. Statement of cash flows D. Statement of retained earnings
B. Income statement
________ is the most common fraud, but ________ is the most expensive fraud. A. Cooking the books; misappropriation of assets B. Misappropriation of assets; fraudulent financial reporting C. Fraudulent financial reporting; misappropriation of assets D. Misappropriation of assets; cooking the books
B. Misappropriation of assets; fraudulent financial reporting
Which of the following transactions will increase an asset and increase stockholders' equity? A. Purchasing supplies on account B. Performing a service on account for a customer C. Collecting cash from a customer on an account receivable D. Borrowing money from a bank
B. Performing a service on account for a customer
On June 1, 2017, Starbucks paid the rent of $114,000 for 40 of its stores in Washington and California. The rent covers the period, June 1, 2017 through November 30, 2017. On June 1, Starbucks will record ________. On June 30, Starbucks will record ________. A. nothing; Rent Expense of $19,000 B. Prepaid Rent of $114,000; Rent Expense of $19,000 C. nothing; Rent Expense of $114,000 D. Rent Expense of $114,000; nothing
B. Prepaid Rent of $114,000; Rent Expense of $19,000
The basic summary device of accounting is the A. trial balance. B. account. C. journal. D. ledger.
B. account.
The nature of an asset is best described as A. something with physical form that's valued at cost in the accounting records. B. an economic resource that's expected to benefit future operations. C. an economic resource representing cash or the right to receive cash in the future. D. something owned by a business that has a ready market value.
B. an economic resource that's expected to benefit future operations.
The ________ is elected by the stockholders and is responsible for setting policy and appointing officers. A. chief executive officer (CEO) B. board of directors C. advisory council D. chief financial officer (CFO)
B. board of directors
The order in which current assets are typically listed is: A. prepaid expenses, cash and cash equivalents, accounts receivable, inventory. B. cash and cash equivalents, accounts receivable, inventory, prepaid expenses. C. accounts receivable, inventory, cash and cash equivalents,prepaid expenses. D. cash and cash equivalents, accounts receivable, prepaid expenses, inventory.
B. cash and cash equivalents, accounts receivable, inventory, prepaid expenses.
The objectives of internal control do NOT include: A. compliance with legal requirements. B. compliance with standards of social responsibility. C. safeguarding assets. D. promoting operational efficiency.
B. compliance with standards of social responsibility.
The book value of a plant asset is the: A. cost of the asset. B. cost of the asset less the accumulated depreciation. C. accumulated depreciation less the cost of the asset. D. balance in the accumulated depreciation account.
B. cost of the asset less the accumulated depreciation.
A company started the year with $300 of supplies. During the year, the company purchased an additional $1200 of supplies. There were $500 of supplies on hand at the end of the year. An adjusting entry prepared at the end of the accounting period includes a: A. debit to Supplies for $500. B. debit to Supplies Expense for $1000. C. debit to Supplies Expense for $200. D. debit to Supplies for $900.
B. debit to Supplies Expense for $1000.
The accounting assumption that states that the business, rather than its owners, is the reporting unit is the: A. going concern assumption. B. entity assumption. C. stable minus −monetary minus −unit assumption. D. historical cost assumption.
B. entity assumption.
Purchasing computer equipment for cash will A. decrease both total liabilities and stockholders' equity. B. have no effect on total assets, total liabilities, or stockholders' equity. C. decrease both total assets and stockholders' equity. D. increase both total assets and total liabilities.
B. have no effect on total assets, total liabilities, or stockholders' equity.
During February, assets increased by $83,000 and liabilities increased by $25,000. Stockholders' equity must have A. increased by $108,000. B. increased by $58,000. C. decreased by $108,000. D. decreased by $58,000.
B. increased by $58,000.
An investment of cash by stockholders into the business will A. decrease total liabilities. B. increase stockholders' equity. C. decrease total assets. D. have no effect on total assets.
B. increase stockholders' equity.
Which of the following is NOT a way to circumvent a strong system of internal control? A. management override B. mandatory vacations C. employee negligence D. collusion
B. mandatory vacations
During the year, CleanDry Corporation has $260,000 in revenues, $145,000 in expenses, and $6,000 in dividend declarations and payments. CleanDry Corporation had A. net income of $254,000. B. net income of $115,000. C. net income of $403,000. D. net income of $151,000
B. net income of $115,000. Revenue - expenses
Enron Corporation committed fraudulent financial reporting by A. bribing employees of the Securities and Exchange Commission. B. overstating profits through bogus sales of nonexistent assets with inflated values. C. reporting expenses as plant assets. D. all of the above
B. overstating profits through bogus sales of nonexistent assets with inflated values.
All of the following are examples of a weak control environment EXCEPT: A. a domineering CEO. B. proper segregation of duties. C. a weak or conflicted Board of Directors. D. lax ethical practices.
B. proper segregation of duties.
With an accrual of revenue: A. plant assets can create an accrual adjustment. B. the cash is received after the revenue is recorded. C. prepaid expenses can create an accrual adjustment. D. the cash is paid before the expense is recorded.
B. the cash is received after the revenue is recorded.
The requirement to report accounting information at regular intervals is known as the: A. revenue principle. B. time−period concept. C. interim reporting concept. D. expense recognition principle.
B. time−period concept.
Connar Company reports the following accounts and balances at year end: Long−Term Notes Payable $150,000 Accounts Receivable $31,000 Accounts Payable $37,000 Building $55,000 Cash and Cash Equivalents $82,000 Salaries Expense $20,500 Common Stock $22,000 Interest Payable $1,500 Land $40,000 Short−term Investments $7000 Income Taxes Payable $14,000 Equipment $59,500 Supplies $7000 Service Revenue $99,000 Supplies Expense $18,000 Utilities Expense $8,500 Income Tax Expense $10,000 What is the total amount of current assets at the end of the year? A. $141,000 B. $127,000 C. $113,000 D. $82,000
B. $127,000 cash and cash equivalents + short-term investment + account receivable + supplies
The following accounts and balances are taken from Moore Company's adjusted trial balance: Accounts Payable $12,000 Accounts Receivable 2900 Accumulated Depreciation 1500 Depreciation Expense 1100 Dividends 2400 Insurance Expense 2600 Interest Revenue 1140 Prepaid Insurance 2020 Retained Earnings 10,600 Salary Expense 22,100 Service Revenue 37,800 What is the ending balance in Retained Earnings after the closing entries are completed? A. $10,740 B. $21,340 C. $38,940 D. $13,140
B. $21,340
Wetzel Company has the following accounts and balances at the end of the fiscal year: Long−Term Notes Payable $152,000 Accounts Receivable $30,000 Accounts Payable $39,000 Building $55,000 Cash and Cash Equivalents $73,000 Salaries Expense $20,500 Common Stock $27,000 Interest Payable $5500 Land $42,000 Short−term Investments $29,000 Income Taxes Payable $15,000 Equipment $59,500 Supplies $30,000 Service Revenue $99,000 Supplies Expense $38,000 Utilities Expense $28,500 Income Tax Expense $21,000 What is the total amount of liabilities at the end of the year? A. $59,500 B. $211,500 C. $110,500 D. $219,000
B. $211,500 Long-term notes payable + account payable +interest payable + income tax payable
On October 1, McReady Company paid six months' insurance in advance totaling $7800. The policy begins on October 1. An adjusted trial balance prepared on December 31 would include a balance in the Prepaid Insurance account of: A. $7800. B. $3900. C. $0. D. $2600.
B. $3900.
On November 1, 2016, a company using accrual accounting, pays $720,000 for a television advertising campaign. Commercials will run evenly over six months beginning on November 1, 2016. How much Advertising Expense will be reported on an income statement prepared for the year ended December 31, 2017? A. $240,000 B. $480,000 C. $720,000 D. $360,000
B. $480,000
A company completed the following transactions during the month of October: I. Purchased office supplies on account, $5600. II. Provided services for cash, $22,000. III. Provided services on account, $36,000. IV. Collected cash from a customer on account, $27,000. V. Paid the monthly rent of $3800. What was the company's total revenue for the month? A. $22,000 B. $58,000 C. $85,000 D. $36,000
B. $58,000
_______ will not be found on the statement of retained earnings. A. Net income B. Stockholders' equity C. Dividends D. Net loss
B. Stockholders' equity
Which is the CORRECT order for items to appear on the income statement? A. cost of goods sold, revenues, net income B. revenues, operating expenses, net income C. interest expense, revenues, income from operations D. revenues, net income, operating expenses
B. revenues, operating expenses, net income
A company receives an utility bill and immediately pays it. With this transaction: A. assets are increased. B. stockholders' equity is decreased. C. liabilities are increased. D. expenses are decreased.
B. stockholders' equity is decreased.
Young Company had total assets of $195,000 and total stockholders' equity of $55,000 at the beginning of the year. During the year, assets increased by $41,000 and liabilities increased by $9,000. Stockholders' equity at the end of the year is A. $105,000. B. $87,000. C. $110,000. D. $96,000.
B.$87,000. Stockholders' equity at the end of the year = stockholders' equity at the beginning of the year + change = $55,000 + ($41,000-$9,000)
What items appear on the book side of a bank reconciliation?
Book error
If a journal entry includes a debit to Accounts Payable and a credit to Cash: A. Accounts Payable is increased. B. Cash is increased. C. Accounts Payable is decreased. D. Cash will have a credit balance.
C. Accounts Payable is decreased.
Which of the following transactions will increase an asset and increase a liability? A. Issuing stock B. Payment of an account payable C. Buying equipment on account D. Purchasing office equipment for cash
C. Buying equipment on account
Which account types normally have a debit balance? A. Liabilities B. Revenues C. Expenses D. Both b and c
C. Expenses
A potential investor, interested in predicting the earnings of a company in the future, should examine the: A. Statement of Retained Earnings and Balance Sheet. B. Statement of Retained Earnings. C. Income Statement only. D. Balance Sheet only.
C. Income Statement only.
How would net income be most likely to affect the accounting equation? A. Increase liabilities and decrease stockholders' equity B. Increase assets and increase liabilities C. Increase assets and increase stockholders' equity D. Decrease assets and decrease liabilities
C. Increase assets and increase stockholders' equity
Which of the following statements is TRUE for a limited liability company? A. Members are not taxed like members of a partnership. B. Only the limited partners have limited liability for the debts of the business. C. Members are not personally liable for the debts of the business. D. Members have unlimited liability for the debts of the business.
C. Members are not personally liable for the debts of the business.
All of the following accounts would be considered assets EXCEPT for: A. Cash. B. Prepaid Expenses. C. Retained Earnings. D. Notes Receivable.
C. Retained Earnings.
In a double-entry accounting system, A. half of all the accounts have a normal credit balance. B. liabilities, owners' equity, and revenue accounts all have normal debit balances. C. a debit entry is recorded on the left side of a T-account. D. both a and b are correct.
C. a debit entry is recorded on the left side of a T-account.
When services are performed on account: A. cash is increased. B. revenue will not be recorded until the cash is received from the customer. C. accounts receivable is increased. D. accounts payable is increased.
C. accounts receivable is increased.
Adjusting entries: A. close the expense accounts. B. close the revenue accounts. C. adjust Unearned Revenue. D. adjust Cash.
C. adjust Unearned Revenue.
The Houston Mavericks basketball team receives $5000 for season tickets on August 1. By December 31, $3000 of the revenue has been earned. The adjusting entry to be made on December 31 includes a: A. debit to Ticket Revenue of $3000. B. credit to Prepaid Revenue of $2000. C. debit to Unearned Revenue of $3000. D. credit to Unearned Revenue of $3000.
C. debit to Unearned Revenue of $3000.
Prepaid expenses will become ________ when their future benefits expire. A. liabilities B. assets C. expenses D. revenues
C. expenses
Purchasing a building for $120,000 by paying cash of $15,000 and signing a note payable for $105,000 will A. decrease total assets and increase total liabilities by $15,000. B. increase both total assets and total liabilities by $120,000. C. increase both total assets and total liabilities by $105,000. D. decrease both total assets and total liabilities by $15,000.
C. increase both total assets and total liabilities by $105,000.
A company received cash in exchange for issuing stock. This transaction increased assets and: A. increased expenses. B. increased liabilities. C. increased stockholders' equity. D. increased revenues.
C. increased stockholders' equity.
The process of verifying accounting information in financial statements is undertaken by: A. the Securities and Exchange Commission. B. external auditors only. C. internal and external auditors. D. internal auditors only.
C. internal and external auditors.
The Accumulated Depreciation account: A. is another term for depreciation expense. B. has a normal balance which is the same as its companion account. C. is a contra asset account. D. represents the original cost of a plant asset.
C. is a contra asset account.
Which transaction increases stockholders' equity? A. payment of operating expenses B. dividends that are declared and paid C. sale of common stock D. expenses greater than revenues for the period
C. sale of common stock
In a bank reconciliation, a bank service charge for printing checks is: A. added to the bank balance. B. added to the book balance. C. subtracted from the book balance. D. subtracted from the bank balance.
C. subtracted from the book balance.
If a company prepares its financial statements three years after the end of its accounting period, it has violated the qualitative characteristic of: A. verifiability. B. understandability. C. timeliness. D. materiality.
C. timeliness.
The McCarthy Company has the following adjusted trial balance as of December 31, 2017: Account Debit Credit Cash $800 Accounts Receivable 1000 Inventory 2200 Supplies 1800 Prepaid Rent 600 Land 6300 Building 39,500 Accumulated Depreciation $8,500 Accounts Payable 7,500 Unearned Revenue 4,100 Notes Payable, due 2020 2,300 Common Stock 6,600 Retained Earnings 3,100 Service Revenue 33,000 Rent Expense 2,300 Supplies Expense 1,200 Salaries Expense 6,400 Depreciation Expense 1,400 Utilities Expense 1,600 Totals $65,100 $65,100 What are total current assets at December 31, 2017? A. $4600 B. $45,900 C. $6400 D. $4000
C. $6400
The ending bank statement balance at November 30 is $7550. The bank statement shows a service charge of $75, electronic funds receipts of $500, and a NSF check for $350. Deposits in transit total $2550 and outstanding checks are $1735. The balance per books at November 30 is $8290. What is the adjusted bank balance at November 30? A. $7550 B. $7625 C. $8365 D. $9105
C. $8365
Baker's Bakery began the year with a cash balance of $74,000. Baker's estimates cash receipts for the year to be $256,000 and cash payments to total $220,000. Baker's needs to end the year with a cash balance of $100,000 to satisfy current loan balance requirements. Determine the amount of cash available for additional investments or new financing needed to achieve this ending cash balance.
Cash available for additional investments, $10,000 Beginning cash balance $ 74,000 Budgeted cash receipts 256,000 Budgeted cash payments (220,000) Cash available before new financing $ 110,000 Budgeted cash balance (100,000) Cash available for additional investments $ 10,000
Jules & Associates had the following information available related to revenues and expenses for the current period: Services provided for cash - $123,000 Services provided on account - $240,000 Expenses paid in cash - $140,000 Expenses incurred on account - $42,000 Assuming no subsequent collection or payment for revenues and expenses on account, what is Jules & Associates' net income under both the cash and accrual basis of accounting?
Cash basis: Net Loss of $17,000; Accrual basis: Net Income of $181,000 Under the accrual basis of accounting, revenues are recorded when earned and expenses recorded when incurred, no matter when cash was received or paid. This would result in revenues and expenses both increasing because of the revenues and expenses on account. The accrual basis of accounting would result in Net Income of $181,000, calculated as: 123000 + 240000 - 140000 - 42000 = 181000
A business makes a cash payment of $12,000 to a creditor. Which of the following occurs?
Cash is credited for $12,000.
Suppose you are starting a medical data analytics firm. Which form of business will limit your liability for the business to the amount you have invested? A. Proprietorship B. Corporation C. Partnership D. None of the above.
Corporation
Which type of business organization provides the least amount of protection for bankers and other creditors of the company? A. Partnership B. Corporation C. Proprietorship D. Both a and
Corporation
Many companies use a lock-box system to prevent unauthorized access to cash. Which of the following statements correctly describes a lock-box system?
Customers send checks directly to a post office box controlled by the bank. The bank then summarizes the collections and sends detailed information to the company.
What is the effect on total assets and stockholders' equity of paying the telephone bill as soon as it is received each month? Total assets Stockholders' equity A. No effect Decrease B. Decrease No effect C. No effect No effect D. Decrease Decrease
D. Decrease Decrease
During the year, Diaz Company's stockholders' equity increased from $92,000 to $108,000. Diaz earned net income of $17,000. Assume no changes in the capital stock accounts. How much in dividends did Diaz declare during the year? A. $16,000 B. $0 C. $17,000 D. $1,000
D. $1,000 Stockholders' equity, end - stockholders' equity, beg = change in retained earnings Net income - change in retained earnings = dividends 17000 - (108000-92000) = 1000
The beginning Cash balance was $9,000. At the end of the period, the balance was $11,000. If total cash paid out during the period was $22,000, the amount of cash receipts was A. $20,000. B. $31,000. C. $33,000. D. $24,000.
D. $24,000.
Martex, a new company, completed these transactions. 1. Stockholders invested $48,000 cash and inventory with a fair value of $30,000. 2. Sales on account, $20,000. What will Martex's total assets equal? A. $78,000 B. $68,000 C. $48,000 D. $98,000
D. $98,000 Cash + Inventory + Act. Rec.
Rosewood Company had current assets of $592, current liabilities of $453, total assets of $702, and long minus −term liabilities of $200. What is Rosewood's debt ratio? (Round your final answer to two decimal places.) A. 0.28 B. 0.65 C. 1.31 D. 0.93
D. 0.93
A company has current assets of $76,000, long−term assets of $150,000, current liabilities of $43,000, and long minus −term liabilities of $35,000. The current ratio is: A. 0.79. B. 3.40. C. 2.17. D. 1.77.
D. 1.77.
Purchasing a laptop computer on account will A. have no effect on stockholders' equity. B. increase total liabilities. C. increase total assets. D. All of the listed choices are correct.
D. All of the listed choices are correct.
Which item(s) is(are) reported on the balance sheet? A. Inventory B. Retained earnings C. Accounts payable D. All of the listed choices.
D. All of the listed choices.
The accounting equation can be expressed as A. Assets = Liabilities−Owners' equity. B. Assets + Liabilities = Owners' equity. C. Owners' equity−Assets = Liabilities. D. Assets−Liabilities = Owners' equity.
D. Assets−Liabilities = Owners' equity.
Which account includes balances in multiple checking accounts? A. Prepaid Expenses B. Notes Receivable C. Accounts Receivable D. Cash
D. Cash
Company A received cash and issued stock to a new stockholder. In recording this transaction: A. Common Stock would be debited. B. Retained Earnings would be credited. C. Cash would be credited. D. Cash would be debited.
D. Cash would be debited.
________ rearranges messages by a mathematical formula making the message impossible to read by someone who does not know the code. A. Firewall B. Access device C. Security wall D. Encryption
D. Encryption
The International Accounting Standards Board is responsible for establishing: A. U. S. Generally Accepted Accounting Principles. B. the code of professional conduct for accountants. C. an international Securities and Exchange Commission. D. International Financial Reporting Standards.
D. International Financial Reporting Standards.
On December 15, 2017, a company receives an order from a customer for services to be performed on December 28, 2017. Due to a backlog of orders, the company does not perform the services until January 3, 2018. The customer pays for the services on January 6, 2018. The revenue principle requires the revenue to be recorded by the company on: A. December 28, 2017. B. December 15, 2017. C. January 6, 2018. D. January 3, 2018.
D. January 3, 2018.
Which of the following is not an asset account? A. Salary Expense B. Service Revenue C. Common Stock D. None of the listed accounts is an asset.
D. None of the listed accounts is an asset.
A company paid $3900 for supplies that were purchased earlier in the month on account. How does this transaction affect the accounting equation? A. Add $3900 to Supplies Expense and add $3900 to Cash. B. Add $3900 to Supplies Expense and subtract $3900 from Cash. C. Add $3900 to Supplies and add $3900 to Supplies Expense. D. Subtract $3900 from Accounts Payable and subtract $3900 from Cash.
D. Subtract $3900 from Accounts Payable and subtract $3900 from Cash.
A company's current ratio is decreasing every year and currently stands at 1.00. This indicates: A. an improving financial position. B. an increase in profitability. C. an improving liquidity position. D. a declining ability to pay current liabilities.
D. a declining ability to pay current liabilities.
Performing a service on account will A. increase total assets. B. increase stockholders' equity. C. increase total liabilities. D. accomplish both a and b.
D. accomplish both a and b.
A Trial Balance Worksheet lists: A. balance sheet accounts only. B. income statement accounts only. C. Retained earnings at the beginning of the accounting period and dividends declared. D. all of the above.
D. all of the above.
Decision makers who use accounting information include: A. the Securities and Exchange Commission. B. the Internal Revenue Service. C. creditors. D. all of the above.
D. all of the above.
Receivables are classified as: A. increases in earnings. B. liabilities. C. decreases in earnings. D. assets.
D. assets.
Three key duties that must always be separated under a good system of internal controls are: A. asset handling, recordkeeping and safeguarding of assets. B. asset handling, hiring and safeguarding of assets. C. record keeping, transaction analysis and transaction approval. D. asset handling, record keeping and transaction approval.
D. asset handling, record keeping and transaction approval
When preparing a bank reconciliation, which of the following items should be added to the book balance? A. deposits in transit B. EFT receipts C. collection of note receivable by bank D. both EFT receipts and collection of a note receivable by the bank
D. both EFT receipts and collection of a note receivable by the bank
When a company borrows money from the bank, which type of account(s) is(are) increased? A. retained earnings only B. liability account only C. asset account only D. both asset and liability accounts
D. both asset and liability accounts
A company reports the purchase of equipment for $1,000,000 in cash. On a statement of cash flows, this is a(n) example of: A. cash outflow from financing activity. B. cash outflow from operating activity. C. noncash activity. D. cash outflow from investing activity.
D. cash outflow from investing activity.
At December 31, the NBC Company owes an employee for four days of work that will not be paid until January 5th. The weekly rate of pay for a five−day workweek is $800. The adjusting entry to record the accrued wages will include a: A. debit to Salaries Payable for $800. B. debit to Salaries Expense for $800. C. debit to Salaries Payable for $640. D. debit to Salaries Expense for $640.
D. debit to Salaries Expense for $640.
A business' receipt of a $115,000 building, with a $70,000 mortgage payable, and issuance of $45,000 of common stock will A. decrease assets by $70,000. B. increase assets by $45,000. C. increase stockholders' equity by $115,000. D. increase stockholders' equity by $45,000.
D. increase stockholders' equity by $45,000.
A fidelity bond is a(n): A. promise by a company to safeguard customers' personal information. B. employment contract for a specified period of time. C. contract prohibiting former employees from working for a competitor. D. insurance policy that reimburses a company for any losses due to employee theft.
D. insurance policy that reimburses a company for any losses due to employee theft.
Beck Company had the following accounts and balances at the end of the year. What is net income or net loss for the year? Cash $74,000 Accounts Payable $12,000 Common Stock $21,000 Cost of Goods Sold $88,000 Dividends Declared and Paid $12,000 Operating Expenses $16,000 Accounts Receivable $0 Inventory $0 Long−term Notes Payable $33,000 Revenues $91,000 Salaries Payable $26,000 A. net income of $3000 B. net income of $75,000 C. net income of $91,000 D. net loss of $13,000
D. net loss of $13,000 Revenue - cost of goods sold -operating expenses
If the bank records a deposit of $140 as $1400, the error should be shown on a bank reconciliation as a: A. subtraction from the bank balance of $1540. B. subtraction from the book balance of $1540. C. subtraction from the book balance of $1260. D. subtraction from the bank balance of $1260.
D. subtraction from the bank balance of $1260.
E−commerce pitfalls include all of the following EXCEPT: A. phishing expedition. B. encryption. C. stolen credit card numbers. D. trojan horses.
D. trojan horses.
Under accrual accounting, revenue is recorded: A. when the cash is received, regardless of when the services are performed. B. only if the cash is received at the same time the services are performed. C. at the end of every month. D. when the services are performed, regardless of when the cash is received.
D. when the services are performed, regardless of when the cash is received.
Marjorie Company's cash balance per the books at the end of the month was $9000. After comparing the company's records with the monthly bank statement, Marjorie's accountant identified the following reconciling items: outstanding checks, $800; deposits in transit, $700; bank service charge, $30; and NSF check, $100. The bank collection of a note receivable was $1100 plus interest of $180. There also was an EFT payment of $150. What is the adjusted book balance at the end of the month? A. $8900 B. $9970 C. $10,150 D. $10,000
D. $10,000 9000 + 1100+180 - 150-30-100
An example of a transposition error is writing: A. $600 as $1200. B. $500 as $50. C. $4000 as $8000. D. $1500 as $5100.
D. $1500 as $5100.
During the year, CleanDry Corporation has $250,000 in revenues, $130,000 in expenses, and $5,000 in dividend declarations and payments. Stockholders' equity changed by A. +$125,000 B. +$245,000 C. +$120,000 D. +$115,000
D. +$115,000 Revenue-expense-dividened
The accounts of Local Company at May 31, 2017 are as follows: Account Balance Accounts Payable $23,500 Accounts Receivable $15,600 Cash $68,000 Common Stock $32,000 Dividends $3,000 Insurance Expense $2,100 Retained Earnings $25,800 Salary Expense $1,100 Sales Revenue $10,000 Supplies $1,500 What are the first four lines, in proper order, on the trial balance at May 31, 2017? A. Sales Revenue, Salary Expense, Insurance Expense, Supplies B. Accounts Payable, Dividends, Common Stock, Retained Earnings C. Accounts Payable, Accounts Receivable, Cash, Common Stock D. Cash, Accounts Receivable, Supplies, Accounts Payable
D. Cash, Accounts Receivable, Supplies, Accounts Payable
Which of the following items used to reconcile cash does not require an adjusting entry?
Deposits in transit
Salaries payable on a company's balance sheet indicates that:
Employees had not received payment for the last few days of work because the last day of the accounting period was not a payday.
What items should be matched according to the matching principle?
Expenses with revenues
Which of the following is not an element of the fraud triangle?
Greed
How does preparing a cash budget help to control cash?
Helps to determine available cash for investments or additional cash needed from financing
Which of the following is true about every adjusting entry?
It affects a balance sheet account and an income statement account.
Which sequence of actions correctly summarizes the accounting process? Journalize transactions, post to the accounts, prepare a trial balance Journalize transactions, prepare a trial balance, post to the accounts Post to the accounts, journalize the transactions, prepare a trial balance Prepare a trial balance, journalize transactions, post to the accounts I don't know yet
Journalize transactions, post to the accounts, prepare a trial balance
Which of the following is not a control over petty cash?
Keeping an unlimited amount of cash on hand
A trial balance is which of the following?
List of all the accounts with their balances
Which of the following statements is correct regarding correcting accounting errors?
Mistakenly posting a $400 debit as a $40 debit while correctly recording the credit is a slide error that can be uncovered by dividing the trial balance difference by 9.
Which of the following statements about cash is true? Revenue is earned only when cash is collected. Cash is part of shareholders' equity. Increases in cash and net income will be the same during an accounting period. None of the answers are true. I don't know yet
None of the answers are true.
Which of the following events increases the owner's capital account in a sole proprietorship?
Owner's contributions
What is the claim of a business owner to the assets of the business called?
Owners' equity
Which of the following is not a true statement regarding requirements of the Sarbanes Oxley Act?
Private companies must issue an internal control report, and the outside auditor must evaluate and report on the soundness of the company's internal controls.
Establishing effective controls minimizes waste, which lowers costs and increases profits. Which objective of internal control is this statement referring to?
Promote operational efficiency
On August 1, Fargo's paid $2,100 for 1-year's rent in advance. What is Fargo's adjusting journal entry on December 31?
Rent Expense 875 Prepaid Rent 875
Which of the following accounts increases with a credit?
Retained Earnings The rules of debits and credits state that equity increases with a credit. Therefore, any account under equity that increases equity, increases with a credit. Retained earnings is an equity account that increases stockholder's equity, therefore it also increases with a credit.
Darice Goodrich receives cash from customers. Her other assigned job is to post the collection to customer accounts receivable. Her company has weak ________.
Separation of duties
Which of the following is not one of the main objectives of internal control?
Separation of duties
Which of the following accounts all must be closed?
Service revenue, depreciation expense, dividends
Which of the following is not an example of a misappropriation of assets?
The company CFO intentionally misclassified long-term assets as current assets.
Why is the income statement the first financial report prepared?
The income statement is prepared first because its result, Net Income, is needed as part of the other financial statements.
A company in its first year of business earned revenues of $100,000 but collected only $80,000 in cash from its customers. Which of the following is correct?
The income statement will show revenues of $100,000, the balance sheet will show accounts receivable of $20,000, and the statement of cash flows will show cash collected from customers of $80,000.
Which of the following statements regarding financial statements is NOT correct?
The statement of cash flows reports cash flows from operating, investing, and capital activities.
Which of the following is a true statement about International Financial Reporting Standards? A. They are more exact (contain more rules) than U.S. generally accepted accounting principles. B. They are converging gradually with U.S. standards. C. They are not being applied anywhere in the world yet, but soon they will be. D. They are not needed for U.S. businesses since the United States already has the strongest accounting standards in the world.
They are converging gradually with U.S. standards.
Which of the following is not an objective of internal control?
To guarantee that a company will not go bankrupt
A compensating balance maintained for a loan increases the actual interest rate on a loan. True False
True
Which of the following items does not cause a difference between the cash balance per bank and book?
Voided checks
When is revenue recorded under the cash-basis system of accounting?
When cash is received
In October, Briar Co. received $600 cash for a service to be provided in the future. As of November 30, 40% of the service was performed by Briar. The adjusting entry would include __________.
a debit to unearned service revenue for $240 and a credit to service revenue for $240
The adjusting entry to record an accrued expense increases both an expense and __________.
a liability
A bank statement lists a $700 deposit as $70. On a bank reconciliation, this will appear as a(n) ________.
addition to the bank balance
After performing a bank reconciliation, we need to journalize ________.
all items on the book side of the reconciliation
The adjusting entry to record accrued revenue increases both a revenue and __________.
an asset
If an accountant forgets to adjust the Prepaid Rent account, the result will be __________.
an overstatement of net income
The document that explains all differences between a company's cash records and the bank's figures is called a(n) _________.
bank reconciliation
Which of the following accounts is depreciated?
building
On September 15, 2016, the Larsen Company declared a $3,000 cash dividend payable on October 10, 2016. The effect of the October 10, 2016 transaction on the Larsen Company would be to:
decrease the balance in the cash account and decrease the balance in the dividend payable account by $3,000.
Assets are usually reported at their A. appraised value. B. current market value. C. historical cost. D. none of the above.
historical cost.
During the current year, a corporation earned income of $20,000, received paid-in capital of $30,000, paid dividends of $15,000, and retired debt of $5,000. The retained earnings account ________.
increased $5,000 Recall that retained earnings is computed on the statement of retained earnings: Beginning Retained Earnings + Net Income - Dividends = Ending Retained Earnings In this case, we are not given beginning retained earnings, but we are given enough information to determine the change in retained earnings (net income - dividends). Therefore, the change in retained earnings is an increase of $5,000.
Revenues are A. decreases in liabilities resulting from paying off loans. B. increases in retained earnings resulting from selling products or performing services. C. increases in paid-in capital resulting from the owners investing in the business. D. all of the above
increases in retained earnings resulting from selling products or performing services.
Business Ethics Leadership Alliance (BELA) holds four values vital to all their practices. Which of the following is one of the core values of BELA?
legal compliance + accountability + transparency
The accountant for Ace Electronics forgot to make the adjusting entry for depreciation on the company's equipment. As a result of this mistake, __________.
net income is too high
Leroy's Lawn Services began the year with a cash balance of $124,000. Leroy's estimates cash receipts for the year to be $432,000 and cash payments to total $425,000. Leroy's needs to end the year with a cash balance of $140,000 to satisfy current loan balance requirements. Determine the amount of cash available for additional investments or new financing needed to achieve this ending cash balance
new financing needed, $9000
Ravel Co. purchased merchandise with $200,000 of its cash. As a result, there was __________.
no change in the total amount of its assets
Separation of duties is not important for internal control of ________.
personal, sensitive information of customers
Encryption is a technology-based internal control measure that:
rearranges messages by a mathematical process.
The owner of Shady Grove Company has the bookkeeper write company checks to pay for his personal items. This violates
the entity assumption
All of the following represent business transactions except: the owner paid for her home mortgage. the owner invested cash in exchange for capital. the owner invested her personal vehicle in exchange for capital. the owner received corporate income via dividends. I don't know yet
the owner paid for her home mortgage.
Retained earnings can be found on ________.
the statement of retained earnings and the balance sheet
Michigan Corporation holds cash of $5,000 and owes $23,000 on accounts payable. Michigan has accounts receivable of $38,000, inventory of $26,000, and land that cost $50,000. How much are Michigan's total assets and liabilities?
total assets: 119000 liabilities: 23000
Christie's Lemonade Stand shows $300 of supplies expense on its income statement. Christie must have __________.
used $300 of supplies during the period
The primary objective of financial reporting is to provide information A. on the cash flows of the company. B. useful for making investment and credit decisions. C. to the federal government. D. about the profitability of the enterprise.
useful for making investment and credit decisions.